<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 1995
REGISTRATION NO. 33-62313
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CABLEVISION SYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-2776686
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE MEDIA CROSSWAYS
WOODBURY, NEW YORK 11797
(516) 364-8450
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT S. LEMLE
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ONE MEDIA CROSSWAYS
WOODBURY, NEW YORK 11797
(516) 364-8450
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
JOHN P. MEAD JONATHAN JEWETT
SULLIVAN & CROMWELL SHEARMAN & STERLING
125 BROAD STREET 599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10022
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE AS
DETERMINED IN LIGHT OF MARKET CONDITIONS.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 17, 1995
PROSPECTUS
[LOGO]
CABLEVISION SYSTEMS CORPORATION
DEBT SECURITIES, PREFERRED STOCK,
CLASS A COMMON STOCK AND WARRANTS
Cablevision Systems Corporation (the "Company") may from time to time offer,
together or separately, its (i) subordinated debt securities (the "Debt
Securities"), (ii) shares of its preferred stock, $.01 par value (the
"Preferred Stock"), which may be issued in the form of Depositary Shares
evidenced by Depositary Receipts, (iii) shares of its Class A common stock, par
value $.01 per share (the "Class A Common Stock"), and (iv) warrants to
purchase Debt Securities, Preferred Stock, Depositary Shares or Class A Common
Stock (the "Warrants") in amounts, at prices and terms to be determined at the
time of offering. The Debt Securities, Preferred Stock, Class A Common Stock
and Warrants are collectively called the "Securities".
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances and will be limited to $1,000,000,000 aggregate public
offering price (or its equivalent (based on the applicable exchange rate at the
time of sale) in one or more foreign currencies, currency units or composite
currencies as shall be designated by the Company). Certain specific terms of
the particular Securities in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, in the case of Debt
Securities, the specific title, aggregate principal amount, the denomination,
whether such Debt Securities are secured or unsecured obligations, maturity,
premium, if any, the interest rate (which may be fixed, floating or
adjustable), the time and method of calculating payment of interest, if any,
the place or places where principal of (and premium, if any) and interest, if
any, on such Debt Securities will be payable, the currency in which principal
of (and premium, if any) and interest, if any, on such Debt Securities will be
payable, any terms of redemption at the option of the Company or the holder,
any sinking fund provisions, terms for any conversion or exchange into other
Securities, the initial public offering price and other special terms, in the
case of Preferred Stock, the specific title, the aggregate amount, any dividend
(including the method of calculating payment of dividends), liquidation,
redemption, voting and other rights, any terms for any conversion or exchange
into other Securities, the initial public offering price and other special
terms, and, in the case of Warrants, the duration, the purchase price, the
exercise price and detachability of, and Securities to be received upon
exercise of, such Warrants. If so specified in the applicable Prospectus
Supplement, Debt Securities of a series may be issued in whole or in part in
the form of one or more temporary or permanent global securities. The Company's
Class A Common Stock is listed on the American Stock Exchange under the trading
symbol "CVC". Any Class A Common Stock sold pursuant to a Prospectus Supplement
will be listed on such exchange, subject to official notice of issuance.
The Debt Securities, when issued, will be subordinated in right of payment to
all Senior Debt of the Company.
The Prospectus Supplement will contain information concerning U.S. federal
income tax considerations, if applicable to the Securities offered.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The Securities will be sold directly, through agents, underwriters or dealers
as designated from time to time, or through a combination of such methods. If
agents of the Company or any dealers or underwriters are involved in the sale
of the Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts are set forth in or may be calculated from the Prospectus Supplement
with respect to such Securities.
-----------
The date of this Prospectus is October , 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices: Seven World Trade Center, Suite 1300, New York,
New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and copies of such material can be obtained from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information also may be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents or information filed with the Commission:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (the "Form 10-K");
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31 and June 30, 1995 (each, a "Form 10-Q" and, collectively,
the "Form 10-Qs");
(c) the Company's Current Reports on Form 8-K filed September 1, 1995,
September 7, 1995 and October 17, 1995 (the "Form 8-Ks"); and
(d) all documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act on or after the date of this Prospectus and
prior to the termination of the offering made hereby.
The Company also incorporates by reference into this Prospectus the
financial statements of Cablevision of Boston Limited Partnership, Monmouth
Cablevision Associates, Riverview Cablevision Associates, L.P., Framingham
Cablevision Associates, Limited Partnership and American Movie Classics
Company included in the Company's Consent Solicitation Statement/Prospectus,
included in the Company's Registration Statement on Form S-4 (File No. 33-
62717).
Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for the purpose of this Prospectus to the extent that a subsequent
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any or all of the information
incorporated herein by reference other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
information). The Company's principal executive offices are located at One
Media Crossways, Woodbury, New York 11797, and its telephone number is (516)
364-8450. Requests for such copies should be directed to the Secretary of the
Company at its executive offices.
As used herein, unless the context otherwise requires, the term "Company"
refers to Cablevision Systems Corporation and its subsidiaries. The term
"Consolidated Financial Statements" refers to the Company's Consolidated
Financial Statements and the notes thereto incorporated by reference from the
Form 10-K and the term "Management's Discussion and Analysis" refers to the
Management's Discussion and Analysis of Financial Condition and Results of
Operations incorporated by reference from the Form 10-K or the Form 10-Qs, as
applicable.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
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THE COMPANY
The Company is one of the largest operators of cable television systems in
the United States, with approximately 2,753,000 subscribers in 19 states as of
June 30, 1995 based on the number of basic subscribers in systems which the
Company manages and which it owns or in which it has investments (including
91,000 subscribers in the Cablevision of Chicago system that was sold on
August 4, 1995, as discussed below). The Company also has ownership interests
in companies that produce and distribute national and regional programming
services and provide advertising sales services for the cable television
industry. The Company was formed in 1985 to effect a reorganization of its
predecessors.
CABLE TELEVISION
The cable television systems that are majority owned and managed by the
Company (the "Company's cable television systems") served approximately
1,866,000 subscribers as of June 30, 1995 in New York, Ohio, Connecticut, New
Jersey, Michigan and Massachusetts. In addition, the Company has non-majority
investments in and manages cable television systems which served approximately
887,000 subscribers as of June 30, 1995 in Alabama, Arkansas, Florida,
Illinois, Kansas, Kentucky, Maine, Massachusetts, Mississippi, Missouri, New
Jersey, New York, North Carolina, Oklahoma, Pennsylvania and Tennessee. The
Company's cable television systems have generally been characterized by
relatively high revenues per subscriber ($37.14 for June 1995) and ratios of
premium service units to basic subscribers (1.7:1 for June 1995). In
calculating revenue per subscriber, the Company includes only recurring
service revenues and excludes installation charges and certain other revenues
such as advertising, pay-per-view and home shopping revenues.
PROGRAMMING SERVICES
The Company conducts its programming activities through Rainbow Programming
Holdings, Inc. ("Rainbow Programming"), its wholly-owned subsidiary, and
through subsidiaries of Rainbow Programming in partnership with certain
unaffiliated entities, including National Broadcasting Company, Inc. ("NBC")
and Liberty Media Corporation. Rainbow Programming's businesses include eight
regional SportsChannel services, four national entertainment services
(American Movie Classics Company, Bravo Network, MuchMusic and the Independent
Film Channel), Rainbow News 12 Company (a regional news service serving Long
Island) and the national backdrop sports services of Prime SportsChannel
Networks. Rainbow Programming also owns an interest in Madison Square Garden
Corporation.
ADVERTISING SERVICES
Rainbow Advertising Sales Corporation sells advertising time to national,
regional and local advertisers on behalf of the Company's cable television
systems and the SportsChannel and News 12 programming services, as well as on
behalf of unaffiliated cable television systems.
RISK FACTORS
Purchase of the Securities offered hereby involves various risks, including
the following principal factors, which, together with the other matters set
forth herein or incorporated by reference herein, should be carefully
considered by prospective investors. Additional risk factors may be set forth
in the accompanying Prospectus Supplement.
Substantial Indebtedness and High Degree of Leverage. The Company has
incurred substantial indebtedness, primarily to finance acquisitions and
expansion of its operations and, to a lesser extent, for investments in and
advances to affiliates. The Company's consolidated debt and Series E
Redeemable Convertible Exchangeable Preferred Stock aggregated approximately
$3.4 billion at June 30, 1995 ($3.2 billion on a pro forma basis after giving
effect to the acquisition by the Company of Cablevision of Boston Limited
Partnership ("Cablevision of Boston") and the proposed transactions involving
V Cable, Inc. (the "Proposed V
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<PAGE>
Cable Transactions")) with varying maturities to 2023, including an aggregate
of approximately $711.1 million maturing on or prior to December 31, 1999. See
Note 4 of Notes to the Consolidated Financial Statements. In addition, the
Company's unconsolidated subsidiary, Rainbow Programming, incurred
approximately $94.0 million of indebtedness in July 1995 in connection with
the acquisition of NBC's interest in SportsChannel (New York) Associates and
Rainbow News 12 Company (the "NBC Option").
Net Losses and Stockholders' Deficit. The Company reported net losses for
the six months ended June 30, 1995 and 1994 of $195.4 million and $111.9
million, respectively, and for the years ended December 31, 1994, 1993 and
1992 of $315.2 million, $246.8 million and $250.5 million, respectively. At
June 30, 1995, the Company had a stockholders' deficit of $2.0 billion. The
losses primarily reflect high levels of interest expense and depreciation and
amortization charges relating to the depreciation of assets obtained through,
and debt incurred to finance, acquisitions. Interest expense and depreciation
and amortization charges remained at a high level throughout 1992, 1993 and
1994 and will continue at high levels in 1995 and future years as a result of
previously completed, pending and future acquisitions, expected capital
expenditures and additional investments in the Company's programming
operations, including the approximately $95.5 million payment in connection
with the exercise of the NBC Option. The Company expects to continue incurring
substantial losses for at least the next several years. See "Management's
Discussion and Analysis--Liquidity and Capital Resources".
Need for Additional Financing. The Company's business requires substantial
investment on a continuing basis to finance capital expenditures and related
expenses for, among other things, upgrade of the Company's cable plant
(including the need to make cable system upgrades mandated by franchise
authorities), the offering of new services and the servicing, repayment or
refinancing of its indebtedness. The Company will require significant
additional financing, through debt and/or equity issuances, to meet its
capital expenditure plans and to pay its debt obligations. There can be no
assurance that the Company will be able to issue additional debt or obtain
additional equity capital on satisfactory terms, or at all, to meet its future
financing needs. See "Management's Discussion and Analysis--Liquidity and
Capital Resources".
Future Capital Expenditures and Programming Commitments. The Company's cable
systems have commitments for capital expenditures, including major system
upgrades, which will involve substantial expenditures over the next several
years. In addition, the Company, through Rainbow Programming, has entered into
numerous contracts relating to cable television programming, including rights
agreements with professional and other sports teams. These contracts typically
require substantial payments over extended periods of time. See Note 8 of
Notes to Consolidated Financial Statements for a discussion of commitments and
contingencies. The Company also has a commitment to fund annual payments to
Charles F. Dolan, the Company's Chairman, related to Cablevision of New York
City ("Cablevision of NYC"). See "Business--Consolidated Cable Affiliates--
Cablevision of New York City" and "Business--Programming Operations" in the
Form 10-K and "Managements's Discussion and Analysis--Liquidity and Capital
Resources".
Intangible Assets. The Company had total assets at June 30, 1995 of
approximately $2.3 billion, of which approximately $0.9 billion were
intangible assets, principally subscriber lists, franchises, excess cost over
fair value of net assets acquired, deferred financing, acquisition and other
costs and deferred interest expense. It is possible that no cash would be
recoverable from the voluntary or involuntary sale of these intangible assets.
Losses on Investments in and Advances to Certain Affiliates. The Company has
made investments in and advances to certain affiliates of which Charles F.
Dolan is the managing general partner or in which Mr. Dolan has substantial
ownership interests. At June 30, 1995, investments in and advances (less
applicable reserves) to such affiliates aggregated approximately $33.7 million
(consisting of $17.6 million for Cablevision of Boston, $12.5 million for
Cablevision of Chicago (which has subsequently been repaid, as explained
below), and $3.6 million for Atlantic Cable Television Publishing Corporation
("Atlantic Publishing")). Because Mr. Dolan is the managing general partner or
has a substantial interest in such affiliates, an inherent conflict of
interest exists with respect to such investments and advances. There can be no
assurances that such investments and advances and any amounts accrued with
respect thereto will be fully recovered or that conflicts of interest will not
arise with respect to the recovery of such amounts.
4
<PAGE>
The Company wrote off for accounting purposes its entire investment in and
advances to one such affiliate, Cablevision of Boston, of $34.5 million at
September 30, 1985. Between September 1985 and May 1988, the Company made
additional subordinated advances to Cablevision of Boston which amounted to
approximately $17.6 million at June 30, 1995. Management currently anticipates
that no further funds will be advanced by the Company to Cablevision of Boston
to support operations. See "Business--Other Cable Affiliates--Cablevision of
Boston" in the Form 10-K. In June 1994, the Company and Cablevision of Boston
entered into an agreement which is designed to give the Company full ownership
of Cablevision of Boston. The agreement provides for the acquisition by the
Company of the interests of Cablevision of Boston which it does not already
own in a series of transactions. Consummation of the transactions would result
in the limited partners in Cablevision of Boston receiving Class A Common
Stock of the Company with an expected aggregate market value of approximately
$40 million. All such additional subordinated advances will become
intercompany indebtedness if the acquisition of Cablevision of Boston is
consummated.
On August 4, 1995, Cablevision of Chicago sold its cable television systems
to Continental Cablevision, Inc. and the loans from the Company to Cablevision
of Chicago, together with accrued interest reserved by the Company, were
repaid in full. Accordingly, in connection therewith, the Company recognized a
gain in the third quarter of 1995 of approximately $15.6 million.
Atlantic Publishing holds a minority equity interest and a debt interest in
a company that publishes cable television guides which are offered to the
Company's subscribers and to other unaffiliated cable television operators. As
of June 30, 1995, the Company had advanced an aggregate of $17.9 million to
Atlantic Publishing, of which approximately $0.7 million was advanced during
1992, approximately $0.5 million was repaid during 1993, $0.6 million was
repaid during 1994 and approximately $0.2 million was advanced during the
first six months of 1995. The Company has written off all advances to Atlantic
Publishing other than approximately $3.6 million. Atlantic Publishing is owned
by a trust for certain Dolan family members; however, the Company has the
option to purchase Atlantic Publishing for an amount equal to the owner's net
investment therein plus interest. The current owner has only a nominal
investment in Atlantic Publishing. See "Business--Other Affiliates--Atlantic
Publishing" in the Form 10-K.
See "Business--Consolidated Cable Affiliates--Cablevision of New York City"
in the Form 10-K for a discussion of the Company's acquisition of
substantially all of Charles F. Dolan's interest in Cablevision of NYC, which
was consummated as described therein in July 1992.
Voting Control by Majority Stockholders; Disparate Voting Rights. Charles F.
Dolan beneficially owned, as of August 31, 1995, 286,000 shares or 2.3% of the
Company's outstanding Class A Common Stock and 2,347,494 shares or 20.3% of
the Company's outstanding Class B common stock (the "Class B Common Stock"
and, collectively with the Class A Common Stock, the "Common Stock"). On a
combined basis, these shares represented 11.1% of the total number of shares
of both classes of Common Stock and 18.6% of the total voting power of the
classes. Trusts established by Mr. Dolan for the benefit of certain Dolan
family members, and as to which Mr. Dolan disclaims beneficial ownership,
owned, as of August 31, 1995, an additional 500,000 shares of Class A Common
Stock or 4.1% of the Class A Common Stock and 9,225,928 shares of the Class B
Common Stock, or 79.7% of the Class B Common Stock and 72.5% of the total
voting power of all classes of the Common Stock. As a result of this stock
ownership, Dolan family members have the power to elect all 12 directors
subject to election by holders of the Class B Common Stock, which directors
constitute 75% of the entire 16-member Board of Directors of the Company.
Moreover, because holders of Class B Common Stock are entitled to ten votes
per share while holders of Class A Common Stock are entitled to one vote per
share, Dolan family members may control stockholder decisions on matters in
which holders of Class A and Class B Common Stock vote together as a class.
These matters include the amendment of certain provisions of the Company's
Certificate of Incorporation and the approval of fundamental corporate
transactions, including mergers. In addition, because the affirmative vote or
consent of the holders of at least 66 2/3% of the outstanding shares of the
Class B Common Stock, voting separately as a class, is required to approve (i)
the authorization or issuance of any additional shares of Class B Common Stock
and (ii) any amendment, alteration or repeal of any of the provisions of the
Certificate
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<PAGE>
of Incorporation of the Company which adversely affects the powers,
preferences or rights of the Class B Common Stock, Dolan family members also
have the power to prevent such issuance or amendment. The voting rights of the
Class B Common Stock beneficially owned by Mr. Dolan will not be modified as a
result of any transfer of legal or beneficial ownership thereof.
Restrictive Covenants. The Company's principal bank credit agreement (the
"Credit Agreement") and certain of the Company's other debt instruments
contain various financial and operating covenants which, among other things,
require the maintenance of certain financial ratios and restrict the Company's
ability to borrow funds from other sources and to utilize funds for various
purposes, including investments in certain subsidiaries. Violation of the
covenants in the Credit Agreement could result in a default under the Credit
Agreement which would permit the bank lenders thereunder to restrict the
Company's ability to borrow undrawn funds under the Credit Agreement and to
accelerate the maturity of borrowings thereunder. The Company currently is not
in violation of any covenant under the Credit Agreement or such other debt
instruments. See "Management's Discussion and Analysis--Liquidity and Capital
Resources".
Conflicts of Interest. Charles F. Dolan and trusts for Dolan family
interests have varying economic interests in the Company's affiliates. Mr.
Dolan and other officers and directors of the Company are also officers and
directors of affiliated companies. Such officers and directors of the Company
devote such time to the business of the Company as is reasonably required;
however, they have other responsibilities which require various amounts of
their time and which could conflict with their duties to the Company.
No Dividends Paid or to be Paid; Fluctuations in the Price of Class A Common
Stock. The Company has never declared or paid dividends on any of its Common
Stock and does not intend to pay cash dividends on such stock in the
foreseeable future. In addition, certain debt instruments to which the Company
is a party contain covenants which effectively prohibit the payment of such
dividends. Accordingly, holders of its Common Stock will receive a return on
their investment only through the sale of such stock. The price of Class A
Common Stock on the American Stock Exchange has fluctuated significantly and
is likely to continue to fluctuate.
Shares Eligible for Future Sale. On August 31, 1995, 12,223,367 shares of
Class A Common Stock were outstanding. The Company has granted to each of
Charles F. Dolan, certain Dolan family interests, the Dolan Family Foundation,
John Tatta, a director of the Company, and certain Tatta family interests
registration rights with respect to 1,076,075 shares of Class A Common Stock
held by them on such date, as well as with respect to 11,573,922 shares of
Class A Common Stock issuable upon conversion of shares of Class B Common
Stock. The Company may determine to fund acquisitions and investments through
sales of Class A Common Stock or other equity related securities. Sales of a
substantial number of shares of Class A Common Stock or Class B Common Stock
could adversely affect the market price of the Class A Common Stock and could
impair the Company's future ability to raise capital through an offering of
its equity securities.
The Company and its subsidiaries, V Cable, Inc. ("V Cable") and VC Holding,
Inc., have entered into a general non-binding letter of intent with General
Electric Capital Corporation ("GECC"), the principal creditor of V Cable,
pursuant to which the Company would issue GECC shares of convertible preferred
stock having an initial aggregate liquidation preference of $500 million in
the Proposed V Cable Transactions. It is anticipated that such preferred stock
would be convertible at the option of the holder at certain times and in
certain circumstances in whole or in part into Class A Common Stock at a
conversion rate based upon the trading value of the Class A Common Stock at
the time of such conversion. Based on the market value of Class A Common Stock
on October 5, 1995, approximately 8,800,000 shares of Class A Common Stock
(which would represent approximately 41.8% of the outstanding Class A Common
Stock after such conversion) would be issuable upon conversion of the
convertible preferred stock issued in the Proposed V Cable Transactions. It is
also anticipated that the Company would grant GECC registration rights with
respect to the Class A Common Stock issuable upon any conversion of such
preferred stock.
In 1990, a registration statement filed by the Company with the Commission
became effective with respect to 270,000 shares of Class A Common Stock held
by A. Jerrold Perenchio, as trustee of the Jerry Perenchio
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Living Trust, and 690,000 shares of Class A Common Stock which Francis F.
Randolph, Jr. has a right to acquire upon the exercise of stock options held
by him. As of August 31 1995, approximately 458,800 shares have been sold
pursuant to that registration statement. Sales of shares pursuant to that
registration statement could adversely affect the market price of the Class A
Common Stock. Mr. Randolph and Mr. Perenchio are directors of the Company. Mr.
Randolph resigned as a Vice Chairman of the Company effective June 30, 1994.
Risk Related to Cable Regulation. The Company's cable television operations
may be adversely affected by government regulation, the impact of competitive
forces and technological changes. In 1992, Congress enacted the 1992 Cable
Act, which represented a significant change in the regulatory framework under
which cable television systems operate. In April 1993 and February 1994, the
Federal Communications Commission (the "FCC") ordered reductions in cable
television rates. In June 1995, a Federal appeals court upheld the material
aspects of the FCC's rate regulation scheme. Telecommunications legislation
pending in Congress would relax the cable rate regulation required by the 1992
Cable Act and would also open the local telephone business to competition from
cable television companies and other providers and preempt state and local
barriers to entry into that market. While both the U.S. Senate and the House
of Representatives have passed telecommunications bills, the Company cannot
predict whether any legislation ultimately will be enacted into law or what
form any such final legislation will take. See "Business--Cable Television
Operations--Competition" and "Business--Cable Television Operations--
Regulation" in the Form 10-K.
Risk of Competition. Cable operators compete with a variety of distribution
systems, including broadcast television stations, multichannel multipoint
distribution services ("MMDS"), satellite master antenna systems ("SMATV"),
direct broadcast satellite systems ("DBS"), and private home dish earth
stations. For example, CAI Wireless Systems, Inc., an MMDS operator, has
received investments from Bell Atlantic Corporation and NYNEX Corporation and
owns operating systems or spectrum rights in a significant portion of the
Company's systems. In addition, three DBS systems are now operational in the
United States. The 1992 Cable Act prohibits a cable programmer that is owned
by or affiliated with a cable operator (such as Rainbow Programming) from
unreasonably discriminating among or between cable operators and other
multichannel video distribution systems with respect to the price, terms and
conditions of sale or distribution of the programmer's service and from
unreasonably refusing to sell service to any multichannel video programming
distributor. Cable systems also compete with the entities that make videotaped
movies and programs available for home rental. The 1992 Cable Act regulates
the ownership by cable operators of MMDS and SMATV. The telecommunications
legislation recently passed by the U.S. Senate would eliminate these statutory
cross-ownership limitations, while the bill passed by the House of
Representatives would retain them. In July 1992, the FCC voted to authorize
additional competition to cable television by video programmers using
broadband common carrier facilities constructed by telephone companies. The
FCC allowed telephone companies to take ownership interests of up to 5% in
such programmers. The FCC also reaffirmed an earlier holding, upheld on appeal
by a Federal appeals court, that programmers using such a telephone company-
provided "video dialtone" system would not need to obtain a state or municipal
franchise. Several telephone companies have sought approval from the FCC to
build such "video dialtone" systems. Such a system has been proposed in
several communities in which the Company currently holds a cable franchise and
several of such systems have been approved by the FCC. Additional competition
to cable systems is possible if the FCC authorizes the licensing of local
multipoint distribution services ("LMDS"). The FCC has proposed to license
this service to providers.
Competition from Telephone Companies. The 1984 Cable Act bars co-ownership
of telephone companies and cable television systems operating in the same
service areas ("cable-telco cross-ownership prohibition"). Numerous Federal
district courts have held this prohibition to be unconstitutional. Several of
these decisions have been upheld on appeal and a number of other decisions are
pending on appeal in various Federal appellate courts. The United States
Supreme Court is expected to consider the constitutionality of the prohibition
during the 1995-96 term. Neither the 1984 Cable Act nor the 1992 Cable Act
bars a telephone company from acquiring cable systems outside its telephone
service area, and several Regional Bell operating companies have purchased or
made investments in cable systems. Legislation to repeal the cable-telco
cross-ownership prohibition, subject to certain regulatory requirements, has
passed both the U.S. Senate and the House of Representatives; repeal has also
been endorsed by the Clinton Administration. These bills also would permit a
telephone company to acquire
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an in-region cable operator in certain small markets under certain
circumstances. The Company cannot predict whether any legislation ultimately
will be enacted into law or what form any such final legislation would take.
See "Business--Cable Television Operations--Regulation" in the Form 10-K.
Risk of Non-Exclusive Franchises and Franchise Renewals. The Company's cable
television systems are operated primarily under nonexclusive franchise
agreements with local government franchising authorities, in some cases with
the approval of state cable television authorities. The Company's business is
dependent on its ability to obtain and renew its franchises. Although the
Company has never lost a franchise as a result of a failure to obtain a
renewal, its franchises are subject to non-renewal or termination under
certain circumstances. In certain cases, franchises have not been renewed at
expiration and the Company operates under temporary licenses while negotiating
renewal terms with the franchising authorities. See "Business--Cable
Television Operations--Franchises" in the Form 10-K.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Securities will be added to
the Company's general funds and used for general corporate purposes, including
the repayment of indebtedness.
8
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's deficiency of earnings
available to cover fixed charges and deficiency of earnings available to cover
fixed charges and preferred stock dividends (a) for each of 1994, 1993, 1992,
1991 and 1990 and for the six months ended June 30, 1995 on an historical
basis and (b) for 1994 and the six months ended June 30, 1995 on the pro forma
basis set forth in the Company's Condensed Pro Forma Consolidated Financial
Statements included in the Form 8-K filed October 17, 1995. In each period, on
a pro forma and historical basis, earnings were inadequate to cover fixed
charges.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
JUNE 30, 1995 1994 1993 1992 1991 1990
--------------------- --------------------- --------- --------- --------- ---------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deficiency of earnings
available to cover
fixed charges......... $(195,402) $(184,609) $(315,003) $(344,627) $(246,644) $(250,429) $(227,124) $(271,301)
========= ========= ========= ========= ========= ========= ========= =========
Deficiency of earnings
available to cover
fixed charges and
preferred stock
dividends............. $(200,320) $(210,602) $(321,388) $(394,415) $(247,529) $(251,314) $(231,588) $(275,366)
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
For purposes of computing such ratios, earnings consist of income before
income taxes and cumulative effect of accounting change plus fixed charges net
of interest capitalized, and fixed charges consist of interest expense,
interest capitalized and the portion of rental expense attributable to
interest.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described therein. The
Debt Securities will be issued under the Indenture (the "Indenture"), between
the Company and the trustee named in the applicable Prospectus Supplement (the
"Trustee") prior to the issuance of the Debt Securities. The Indenture is
subject to and is governed by the Trust Indenture Act of 1939, as amended.
The statements herein relating to the Debt Securities and the Indenture are
summaries and are subject to the detailed provisions of the Indenture. The
following summaries of certain provisions of the Indenture do not purport to
be complete, and where reference is made to particular provisions of the
Indenture, such provisions, including the definitions of certain terms, are
incorporated by reference as a part of such summaries or terms, which are
qualified in their entirety by such reference and with respect to any
particular Debt Securities, to the description thereof in the Prospectus
Supplement related thereto. The definitions of certain capitalized terms used
in the following summary are set forth below under "Certain Definitions".
GENERAL
The Debt Securities will be general unsecured obligations of the Company.
The Indenture does not limit the aggregate amount of Debt Securities which may
be issued thereunder, and Debt Securities may be issued thereunder from time
to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Debt Securities when issued
will be subordinated in right of payment to the prior payment in full of all
Senior Debt (as defined) of the Company as described under "Subordination of
Debt Securities" and in the Prospectus Supplement applicable to an offering of
Debt Securities.
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<PAGE>
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the title of such Debt Securities; (2) any
limit on the aggregate principal amount of such Debt Securities; (3) the
person to whom any interest on any Debt Security of the series shall be
payable if other than the person in whose name the Debt Security is registered
on the regular record date; (4) the date or dates on which such Debt
Securities will mature; (5) the rate or rates of interest, if any, or the
method of calculation thereof, which such Debt Securities will bear, the date
or dates from which any such interest will accrue, the interest payment dates
on which any such interest on such Debt Securities will be payable and the
regular record date for any interest payable on any interest payment date; (6)
the place or places where the principal of, premium, if any, and interest on
such Debt Securities will be payable; (7) the period or periods within which,
the events upon the occurrence of which, and the price or prices at which,
such Debt Securities may, pursuant to any optional or mandatory provisions, be
redeemed or purchased, in whole or in part, by the Company and any terms and
conditions relevant thereto; (8) the obligations of the Company, if any, to
redeem or repurchase such Debt Securities at the option of the Holders; (9)
the denominations in which any such Debt Securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof; (10) any index
or formula used to determine the amount of payments of principal of and any
premium and interest on such Debt Securities; (11) the currency, currencies or
currency unit or units of payment of principal of and any premium and interest
on such Debt Securities if other than U.S. dollars; (12) if the principal of,
or premium, if any, or interest on such Debt Securities is to be payable, at
the election of the Company or a holder thereof, in one or more currencies or
currency units other than that or those in which such Debt Securities are
stated to be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Debt Securities of
such series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such election is
to be made; (13) if other than the principal amount thereof, the portion of
the principal amount of such Debt Securities of the series which will be
payable upon acceleration of the maturity thereof; (14) if the principal
amount of any Debt Securities which will be payable at the maturity thereof
will not be determinable as of any date prior to such maturity, the amount
which will be deemed to be the outstanding principal amount of such Debt
Securities; (15) the applicability of any provisions described under
"Defeasance"; (16) whether any of such Debt Securities are to be issuable in
permanent global form ("Global Security") and, if so, the terms and
conditions, if any, upon which interests in such Securities in global form may
be exchanged, in whole or in part, for the individual Debt Securities
represented thereby; (17) the applicability of, and modifications to, any
provisions described under "Events of Default" and any additional Event of
Default applicable thereto; (18) any covenants applicable to such Debt
Securities in addition to, or in lieu of, the covenants described under "--
Certain Covenants of the Company"; (19) the terms and conditions, if any,
pursuant to which the Debt Securities are convertible or exchangeable into
Class A Common Stock or other Securities; (20) whether such Debt Securities
are secured; and (21) any other terms of such Debt Securities not inconsistent
with the provisions of the Indenture. Debt Securities may also be issued under
the Indenture upon the exercise of Debt Warrants. (Section 301) See
"Description of Warrants--Debt Warrants".
Debt Securities may be issued at a discount from their principal amount.
United States Federal income tax considerations and other special
considerations applicable to any such original issue discount Debt Securities
will be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms
and other information with respect to such issue of Debt Securities will be
set forth in the applicable Prospectus Supplement.
The Indenture does not contain any provisions that limit the ability of the
Company to incur indebtedness or that afford Holders of the Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company, other than as described below under "--Certain Covenants of the
Company--Limitation on Indebtedness".
10
<PAGE>
CONVERSION OR EXCHANGE OF DEBT SECURITIES
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, such series will be convertible or
exchangeable into Class A Common Stock or other securities on the terms and
conditions set forth therein. Such terms shall include provisions as to
whether conversion is mandatory, at the option of the holder or at the option
of the Company, and may include provisions pursuant to which the number of
shares of Class A Common Stock or other securities of the Company to be
received by the holders of Debt Securities would be calculated according to
the market price of Class A Common Stock or other securities of the Company as
of a time stated in the Prospectus Supplement.
FORM, EXCHANGE, REGISTRATION, CONVERSION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof. (Section 302) Unless otherwise indicated
in the applicable Prospectus Supplement, payment of principal, premium, if
any, and interest on the Debt Securities will be payable, and the exchange,
conversion and transfer of Debt Securities will be registerable, at the office
or agency of the Company maintained for such purposes and at any other office
or agency maintained for such purpose. (Sections 301, 305 and 1002) No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge imposed in connection therewith. (Section
305)
All monies paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed for two years after such principal, premium or interest has become
due and payable may be repaid to the Company and thereafter the Holder of such
Debt Security may look only to the Company for payment thereof. (Section 1003)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a Depositary ("Depositary") or its nominee identified in the
applicable Prospectus Supplement. In such a case, one or more Global
Securities will be issued in a denomination or aggregate denomination equal to
the portion of the aggregate principal amount of Outstanding Debt Securities
of the series to be represented by such Global Security or Securities. Unless
and until it is exchanged in whole or in part for Debt Securities in
registered form, a Global Security may not be registered for transfer or
exchange except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
nominee to a successor Depositary or a nominee of such successor Depositary
and except in the circumstances described in the applicable Prospectus
Supplement. (Sections 203 and 305)
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Company expects that
the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on
behalf of the Depositary for such Global Security, the Depositary will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interest in such Global Security will be limited to participants or
Persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on, and the
transfer of that ownership interest will be effected only through,
11
<PAGE>
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through participants will be shown on, and the transfer of such ownership
interests within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
Debt Securities will be issued in fully registered, certificated form
("Definitive Securities") to holders or their nominees, rather than to the
Depositary or its nominee, only if (i) the Depositary advises the applicable
Trustee in writing that the Depositary is no longer willing or able to
discharge properly its responsibilities as depositary with respect to such
Debt Securities and it is unable to locate a qualified successor, (ii) the
Company, at its option, elects to terminate the book-entry system or (iii)
after the occurrence of an Event of Default with respect to such Debt
Securities, a holder of Debt Securities advises the applicable Trustee in
writing that it wishes to receive a Definitive Security.
Upon the occurrence of any event described in the immediately preceding
paragraph, the applicable Trustee will be required to notify all applicable
holders through the Depositary and its Participants of the availability of
Definitive Securities. Upon surrender by the Depositary of the definitive
certificates representing the corresponding Debt Securities and receipt of
instructions for re-registration, the applicable Trustee will reissue such
Debt Securities as Definitive Securities to such holders.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Securities
represented by such Global Security for all purposes under the Indenture.
Unless otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in such Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in certificated form and will not be considered
the holders thereof for any purposes under the Indenture. (Sections 203 and
305) Accordingly, each Person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary and, if such Person is
not a participant, on the procedures of the participant through which such
Person owns its interest, to exercise any rights of a holder under the
Indenture. The Company understands that under existing industry practices, if
the Company requests any action of holders or an owner of a beneficial
interest in such Global Security desires to give any notice or take any action
a holder is entitled to give or take under the Indenture, the Depositary would
authorize the participants to give such notice or take such action, and
participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN DEFINITIONS
Unless otherwise specified in the applicable Prospectus Supplement, the
following definitions are applicable to the Indenture relating to the Debt
Securities. Reference is made to the Indenture for the full definition of all
such terms.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, control when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Annualized Operating Cash Flow" means, for any period of three complete
consecutive calendar months, an amount equal to Operating Cash Flow for such
period multiplied by four.
"Banks" means the lenders from time to time under the Credit Agreement.
12
<PAGE>
"Capitalized Lease Obligation" means any obligation of a person to pay rent
or other amounts under a lease with respect to any property (whether real,
personal or mixed) acquired or leased by such Person and used in this business
that is required to be accounted for as a liability on the balance sheet of
such Person in accordance with generally accepted accounting principles and
the amount of such Capitalized Lease Obligation shall be the amount so
required to be accounted for as a liability.
"Cash Flow Ratio" means, as at any date, the ratio of (i) the sum of the
aggregate outstanding principal amount of all Indebtedness of the Company and
the Restricted Subsidiaries determined on a consolidated basis but excluding
all Interest Swap Obligations entered into by the Company or any Restricted
Subsidiary and one of the Banks outstanding on such date plus (but without
duplication of Indebtedness supported by Letters of Credit) the aggregate
undrawn face amount of all Letters of Credit outstanding on such date to (ii)
Annualized Operating Cash Flow determined as at the last day of the most
recent month for which financial information is available.
"Cumulative Cash Flow Credit" means the sum of:
(a) cumulative Operating Cash Flow during the period commencing on July
1, 1988 and ending on the last day of the most recent month preceding the
date of the proposed Restricted Payment for which financial information is
available or, if cumulative Operating Cash Flow for such period is
negative, minus the amount by which cumulative Operating Cash Flow is less
than zero, plus
(b) the aggregate net proceeds received by the Company from the issue or
sale (other than to a Restricted Subsidiary) of its capital stock (other
than Disqualified Stock) on or after January 1, 1992, plus
(c) the aggregate net proceeds received by the Company from the issuance
or sale (other than to a Restricted Subsidiary) of its capital stock (other
than Disqualified Stock) on or after January 1, 1992, upon the conversion
of, or exchange for, Indebtedness of the Company or any Restricted
Subsidiary or from the exercise of any options, warrants or other rights to
acquire capital stock of the Company.
For purposes of this definition, the net proceeds in property other than cash
received by the Company as contemplated by clauses (b) and (c) above shall be
valued at the fair market value of such property (as determined by the Board
of Directors of the Company, whose good faith determination shall be
conclusive) at the date of receipt by the Company.
"Cumulative Interest Expense" means, for the period commencing on July 1,
1988 and ending on the last day of the most recent month preceding the
proposed Restricted Payment for which financial information is available, the
aggregate of the interest expense of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with generally accepted accounting principles, including interest expense
attributable to Capitalized Lease Obligations.
"Debt" with respect to any Person means, without duplication, any liability,
whether or not contingent, (i) in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereto), but excluding reimbursement
obligations under any surety bond, (ii) representing the balance deferred and
unpaid of the purchase price of any property (including pursuant to
Capitalized Lease Obligations), except any such balance that constitutes a
trade payable, (ii) under Interest Swap Agreements (as defined in the Credit
Agreement) entered into pursuant to the Credit Agreement, (iv) under any other
agreement related to the fixing of interest rates on any Indebtedness, such as
an interest swap, cap or collar agreement (if and to the extent any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared on a consolidated basis in accordance with generally accepted
accounting principles) or (v) guarantees of items of other Persons which would
be included within this definition for such other Persons (whether or not the
guarantee would appear on such balance sheet).
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<PAGE>
"Disqualified Stock" means any capital stock of the Company or any
Restricted Subsidiary which, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the maturity date of the
Debt Securities.
"Indebtedness" with respect to any Person, means the Debt of such Person;
provided, however, that, with respect to the Company, the Minimum Payment or
the Preferred Payment (each, a "Cablevision of NYC Payment") payable by a
subsidiary of the Company and guaranteed by the Company as a result of the
acquisition of Cablevision of NYC (the "Cablevision of NYC Acquisition") shall
not be deemed to be "Indebtedness" so long as the Company and such subsidiary
are permitted to make such Cablevision of NYC Payment in one or more classes
of the Company's capital stock (other than Disqualified Stock) pursuant to the
terms of the Cablevision of NYC Acquisition agreement and the Company and the
Restricted Subsidiaries are prohibited from making such Cablevision of NYC
Payment in cash, debt securities, Disqualified Stock or any combination
thereof, pursuant to the terms of any mortgage, indenture, credit agreement or
other instrument that secures or evidences Indebtedness for money borrowed or
guaranteed by the Company or a Restricted Subsidiary in an aggregate amount of
$10,000,000 or more; provided that, for purposes of the definition of
"Indebtedness" (including the term "Debt" to the extent incorporated in such
definition) and for purposes of the definition of "Event of Default", the term
"guarantee" shall not be interpreted to extend to a guarantee under which
recourse is limited to the capital stock of an entity that is not a Restricted
Subsidiary.
"Interest Swap Obligations" means, with respect to any Person, the
obligations of such Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by such Person calculated by applying a fixed or a floating rate of
interest on the same notional amount.
"Investment" means any advance, loan, account receivable (other than an
account receivable arising in the ordinary course of business), or other
extension of credit (excluding, however, accrued and unpaid interest in
respect of any advance, loan or other extension of credit) or any capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others, or otherwise), any
purchase or ownership of any stocks, bonds, notes, debentures or other
securities (including, without limitation, any interests in any partnership,
joint venture or joint adventure) of, or any bank accounts with or guarantee
of any Indebtedness or other obligations of, any Unrestricted Subsidiary or
Affiliate that is not a subsidiary of the Company, provided that (i) the term
"Investment" shall not include any transaction that would otherwise constitute
an Investment of the Company or a subsidiary of the Company to the extent that
the consideration provided by the Company or such subsidiary in connection
therewith shall consist of capital stock of the Company (other than
Disqualified Stock) and (ii) the term "guarantee" shall not be interpreted to
extend to a guarantee under which recourse is limited to the capital stock of
an entity that is not a Restricted Subsidiary.
"Junior Securities" means securities of the Company as reorganized or
readjusted or securities of the Company or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, junior
or the payment of which is otherwise subordinate, at least to the extent
provided in the Indenture, to the payment of all Senior Indebtedness at the
time outstanding, and to the payment of all securities issued in exchange
therefor, to the holders of the Senior Indebtedness at the time outstanding.
"Operating Cash Flow" means, for any period, the sum of the following for
the Company and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with generally accepted accounting principles
(except for the amortization of deferred installation income which shall be
excluded from the calculation of Operating Cash Flow for all purposes of the
Indenture): (i) aggregate operating revenues minus (ii) aggregate operating
expenses (including technical, programming, sales, selling, general and
administrative expenses and salaries and other compensation, net of amounts
allocated to Affiliates, paid to any general partner, director, officer or
employee of the Company or any Restricted Subsidiary, but excluding interest,
depreciation
14
<PAGE>
and amortization and the amount of non-cash compensation in respect of the
Company's employee incentive stock programs for such period (not to exceed in
the aggregate for any calendar year 7% of the Operating Cash Flow for the
previous calendar year) and, to the extent otherwise included in operating
expenses, any losses resulting from a writeoff or writedown of Investments by
the Company or any Restricted Subsidiary in Affiliates). For purposes of
determining Operating Cash Flow, there shall be excluded all management fees
until actually paid to the Company or any Restricted Subsidiary in cash.
"Permitted Restricted Payment" means the payment or declaration of any
dividend by the Company or the making by the Company of any other distribution
or the consummation of an exchange offer, or any combination of the foregoing,
which results in all or a portion of the Capital Stock of Rainbow Programming
Holdings, Inc. or of another entity holding only assets that were held by
Rainbow Programming Holdings, Inc. immediately prior to the acquisition
thereof by such entity (in either case, "RPH") being held by all or any
portion of the shareholders of the Company (an "RPH Transaction"), it being
understood that (i) if the Company and its Subsidiaries, after the date of the
Indenture and prior to the date of an RPH Transaction, make Investments in RPH
(in cash or assets) aggregating not more than $15,000,000, then such RPH
Transaction shall continue to constitute a "Permitted Restricted Payment" and
(ii) if the Company or any Subsidiary makes an Investment in RPH, after the
date of the Indenture with respect to the relevant series of Debt Securities
issued thereunder and prior to the date of such RPH Transaction, that is not
permitted by the foregoing clause (i), then such RPH Transaction shall not
constitute a "Permitted Restricted Payment". For purposes of the foregoing,
the value of any assets invested in RPH shall be based upon the fair market
value thereof as determined by the Board of Directors of the Company, whose
good faith determination shall be conclusive.
"Restricted Payment" means
(a) any Stock Payment by the Company or a Restricted Subsidiary; or
(b) any direct or indirect payment to redeem, repurchase, defease or
otherwise acquire or retire for value, or permit any Restricted Subsidiary
to redeem, repurchase, defense or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Company that is subordinate in right
of payment to the Debt Securities of such series.
Notwithstanding the foregoing, Restricted Payments shall not include (x)
payments by any Restricted Subsidiary to the Company or any other Restricted
Subsidiary or (y) any Investment or designation of a Restricted Subsidiary as
an Unrestricted Subsidiary permitted under the "Limitation on Investments in
Unrestricted Subsidiaries and Affiliates" covenant.
"Restricted Subsidiary" means any subsidiary of the Company, whether
existing on the date of the Indenture with respect to the relevant series of
Debt Securities or created subsequent thereto, designated from time to time by
the Company as a "Restricted Subsidiary"; provided, however, that no
subsidiary can be or remain so designated unless (i) at least 67% of each of
the total equity interest and the voting control of such subsidiary is owned,
directly or indirectly, by the Company or another Restricted Subsidiary and
(ii) such subsidiary is not restricted, pursuant to the terms of any loan
agreement, note, indenture or other evidence of indebtedness, from (a) paying
dividends or making any distribution on such subsidiary's capital stock or
other equity securities or paying any Indebtedness owed to the Company or to
any Restricted Subsidiary, (b) making any loans or advances to the Company or
any Restricted Subsidiary or (c) transferring any of its properties or assets
to the Company or any Restricted Subsidiary (it being understood that a
financial covenant any of the components of which are directly impacted by the
taking of the action (e.g., the payment of a dividend) itself (such as a
minimum net worth test) would be deemed to be a restriction on the foregoing
actions, while a financial covenant none of the components of which is
directly impacted by the taking of the action (e.g., the payment of a
dividend) itself (such as a debt to cash flow test) would not be deemed to be
a restriction on the foregoing actions); and provided, further, that the
Company may, from time to time, redesignate any Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with the provisions of the "Limitation
on Investments in Unrestricted Subsidiaries and Affiliates" covenant.
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"Senior Indebtedness" means, with respect to Debt Securities of a series,
the principal, premium, if any, interest (including post-petition interest in
any proceeding under any Bankruptcy Law, whether or not such interest is an
allowed claim enforceable against the debtor in a proceeding under such
Bankruptcy Law), penalties, fees and other liabilities payable with respect to
(i) all Debt of the Company, other than the Debt Securities of such series,
other Debt Securities and the Company's 10 3/4% Debentures due 2004, the 9
7/8% Debentures due 2013 and the 9 7/8% Debentures due 2023 (with which the
Debt Securities of such series are intended to rank on a parity), whether
outstanding on the date of the Indenture with respect to the relevant series
of Debt Securities issued thereunder or thereafter created, incurred or
assumed, which is (x) for money borrowed, (y) evidenced by a note or similar
instrument given in connection with the acquisition of any businesses,
properties or assets of any kind or (z) in respect of any Capitalized Lease
Obligations and (ii) all renewals, extensions, refundings, increases or
refinancings thereof, unless, in the case of clause (i) or (ii) above, the
instrument under which the Debt is created, incurred, assumed or guaranteed
expressly provides that such Debt is not senior in right of payment of the
Debt Securities of any series. Notwithstanding anything to the contrary
contained in the Indenture, Senior Indebtedness shall mean and include all
amounts of Senior Indebtedness that is such by virtue of clause (i) or (ii) of
the foregoing definition that are repaid by the Company and subsequently
recovered from the holder of such Senior Indebtedness under any applicable
Bankruptcy Laws or otherwise (other than by reasons of some wrongful conduct
on the part of the holders of such Debt).
"Stock Payment" means, with respect to any Person, the payment or
declaration of any dividend, either in cash or in property (except dividends
payable in common stock or common shares of capital stock of such Person), or
the making by such Person of any other distribution, on account of any shares
of any class of its capital stock, now or hereafter outstanding, or the
redemption, purchase, retirement or other acquisition for value by such
Person, directly or indirectly, of any shares of any class of its capital
stock, now or hereafter outstanding.
"Unrestricted Subsidiary" means any subsidiary of the Company which is not a
Restricted Subsidiary.
CERTAIN COVENANTS OF THE COMPANY
Unless otherwise specified in the applicable Prospectus Supplement, the
following covenants contained in the Indenture shall be applicable with
respect to any series of Debt Securities:
Limitation on Indebtedness. The Indenture provides that the Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly
incur, create, issue, assume, guarantee or otherwise become liable for,
contingently or otherwise, or become responsible for the payment of,
contingently or otherwise, any Indebtedness (other than Indebtedness between
or among any of the Company and Restricted Subsidiaries) unless, after giving
effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1.
(Section 1007). The Prospectus Supplement will set forth the Cash Flow Ratio
as of the most recent practicable date.
Limitation on Senior Subordinated Indebtedness. The Indenture provides that
the Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable for, contingently or otherwise, or become responsible for the
payment of, contingently or otherwise, any Indebtedness which is both (i)
senior in right of payment to the Debt Securities of such series and (ii)
expressly subordinate in right of payment to any other Indebtedness of the
Company. For purposes of this covenant, Indebtedness is deemed to be senior in
right of payment of the Debt Securities of such series if it is not
subordinate in right of payment to Senior Indebtedness at least to the same
extent as the Debt Securities of such series are subordinate to Senior
Indebtedness. (Section 1008)
Limitation on Restricted Payments. The Indenture provides that, so long as
any of the Debt Securities of such series remain outstanding, the Company will
not, and will not permit any Restricted Subsidiary to, make any Restricted
Payment if (a) at the time of such proposed Restricted Payment, a Default or
Event of Default shall have occurred and be continuing or shall occur as a
consequence of such Restricted Payment or (b) immediately after giving effect
to such Restricted Payment, the aggregate of all Restricted Payments that
shall have been made on or after July 1, 1988 would exceed the sum of:
(i) $25,000,000, plus
(ii) an amount equal to the difference between (A) the Cumulative Cash
Flow Credit and (B) 1.2 multiplied by Cumulative Interest Expense.
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Notwithstanding the foregoing, so long as no Default or Event of Default
shall have occurred and be continuing, the Company may make any Permitted
Restricted Payment; provided, however, that such Permitted Restricted Payment
shall thereafter be counted as a Restricted Payment solely for purposes of
calculating whether any future Restricted Payments are permitted under clause
(b) of the preceding sentence.
For purposes of the "Limitation on Restricted Payments" covenant, the amount
of any Restricted Payment or Permitted Restricted Payment, if other than cash,
shall be based upon fair market value as determined by the Board of Directors
of the Company, whose good faith determination shall be conclusive. (Section
1009)
The foregoing provisions do not prevent: (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at such date of
declaration such payment complied with the above provisions; (ii) the
retirement or redemption of any shares of the Company's capital stock or
warrants, rights or options to acquire capital stock of the Company, in
exchange for, or out of the proceeds of a substantially concurrent sale of,
other shares of the Company's capital stock or warrants, rights or options to
acquire capital stock of the Company (other than Disqualified Stock); and
(iii) the redemption of or payments of cash dividends on the Company's 8%
Series C Cumulative Preferred Stock (the "Series C Preferred Stock")
outstanding on January 1, 1995, which redemptions or dividends are provided
for by the terms of the Series C Preferred Stock in effect on such date (or
the redemption of or payment of cash dividends on any security of the Company
issued in exchange for or upon the conversion of such Series C Preferred
Stock; provided that the aggregate amount payable pursuant to the terms of
such security is no greater than the aggregate amount payable pursuant to the
terms of the Series C Preferred Stock). For purposes of determining the
aggregate permissible amount of Restricted Payments in accordance with clause
(b) of the first paragraph of this covenant, all amounts expended pursuant to
clauses (i) and (iii) of this paragraph shall be included and all amounts
expended or received pursuant to clause (ii) of this paragraph shall be
excluded; provided, however, that amounts paid pursuant to clause (i) of this
paragraph shall be included only to the extent that such amounts were not
previously included in calculating Restricted Payments. (Section 1009)
For the purposes of the foregoing provisions, the net proceeds from the
issuance of shares of capital stock of the Company upon conversion of
Indebtedness shall be deemed to be an amount equal to (i) the accreted value
of such Indebtedness on the date of such conversion and (ii) the additional
consideration, if any, received by the Company upon such conversion thereof,
less any cash payment on account of fractional shares (such consideration, if
in property other than cash, to be determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive). If the Company
makes a Restricted Payment which, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted
under the requirements of this covenant, such Restricted Payment shall be
deemed to have been made in compliance with this covenant notwithstanding any
subsequent adjustments made in good faith to the Company's financial
statements affecting Cumulative Cash Flow Credit or Cumulative Interest
Expense for any period. (Section 1009)
Limitation on Investments in Unrestricted Subsidiaries and Affiliates. The
Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly (i) make any Investment or
(ii) allow any Restricted Subsidiary to become an Unrestricted Subsidiary (a
"redesignation of a Restricted Subsidiary"), in each case unless (a) no
Default or Event of Default shall have occurred and be continuing or shall
occur as a consequence of such Investment or such redesignation of a
Restricted Subsidiary, and (b) after giving effect thereto, the Cash Flow
Ratio shall be less than or equal to 9:1.
The foregoing provisions of this covenant shall not prohibit (i) any renewal
or reclassification of any Investment existing on the date hereof or (ii)
trade credit extended on usual and customary terms in the ordinary course of
business. (Section 1010)
Transactions with Affiliates. The Indenture provides that the Company shall
not, and shall not permit any of its subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, an Affiliate of the
Company that is not a subsidiary of the Company, having a value, or for
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consideration having a value, in excess of $10,000,000 individually or in the
aggregate unless the Board of Directors of the Company shall make a good faith
determination that the terms of such transaction are, taken as a whole, no
less favorable to the Company or such subsidiary, as the case may be, than
those which might be available in a comparable transaction with an unrelated
Person. For purposes of clarification, this provision shall not apply to
Restricted Payments or Permitted Restricted Payments permitted under
"Limitation on Restricted Payments". (Section 1011)
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following are Events of Default under the Indenture with respect to Debt
Securities of any series (unless they are inapplicable to such series of Debt
Securities or they are specifically deleted in the supplemental indenture or
Board Resolution under which such series of Debt Securities is issued or has
been modified): (a) default for 30 days in payment of interest on any Debt
Security of such series; (b) default in payment of principal or premium, if
any, of any Debt Security of such series at maturity, upon acceleration,
redemption or otherwise; (c) default in the deposit of any sinking fund
payment when and as due in respect of any Debt Security of such series; (d)
failure to comply with any other covenant or agreement of the Company,
continued for 60 days (or, with respect to certain covenants or agreements, 30
days) after written notice as provided in the Indenture; (e) a default or
defaults under any mortgage, indenture or instrument which secures or
evidences any Indebtedness for money borrowed or guaranteed by the Company or
a Restricted Subsidiary in any aggregate amount of $10,000,000 or more (but
excluding any Indebtedness for the deferred purchase price of property or
services owed to the person providing such property or services as to which
the Company or such Restricted Subsidiary is contesting its obligation to pay
the same in good faith and by proper proceedings and for which the Company or
such Restricted Subsidiary has established appropriate reserves) which result
from the failure to pay such Indebtedness at final maturity or which have
resulted in the acceleration of such Indebtedness; (f) the entry of a final
judgment or final judgments for the payment of money by a court or courts of
competent jurisdiction against the Company or any Restricted Subsidiary in an
aggregate amount exceeding $10,000,000 which remain undischarged and unbonded
for a period (during which execution shall not be effectively stayed) of 60
days or as to which an enforcement proceeding has been commenced by any
creditor; (g) certain events of bankruptcy, insolvency or reorganization; and
(h) any other Event of Default as may be specified for such series. (Section
501)
If an Event of Default (other than as specified in (g) above) shall occur
and be continuing under the Indenture applicable to any series of Debt
Securities, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the outstanding Debt Securities of such series
by written notice to the Company and the agents, if any, under the Credit
Agreement (and to the Trustee if such notice is given by the Holders), may
declare all the unpaid principal, premium, if any, and interest on the Debt
Securities of such series to be due and payable as provided in the Indenture.
Upon a declaration of acceleration with respect to a series outstanding under
the Indenture (or of all series, as the case may be), such principal, premium,
if any, and accrued interest shall be due and payable upon the first to occur
of an acceleration under the Credit Agreement or ten days after receipt by the
Company and the agents, if any, under the Credit Agreement of such written
notice. No action on the part of the Trustee or any Holder of the Debt
Securities of any series is required for such acceleration if an Event of
Default specified in (g) above shall occur and be continuing. The Holders of
at least a majority in principal amount of the Debt Securities of any series
then outstanding may rescind an acceleration and its consequences if (i) all
existing Events of Default, other than the non-payment of principal of,
premium, if any, or interest on the Debt Securities of such series which have
become due solely because of the acceleration, have been cured or waived and
(ii) the rescission would not conflict with any judgment or decree of a court
of competent jurisdiction. A declaration of acceleration because of an Event
of Default specified in clause (e) of the preceding paragraph would be
automatically annulled if the Indebtedness referred to therein were
discharged, or the Holders thereof rescinded their declaration of acceleration
referred to therein, within 30 days after the acceleration of the Debt
Securities of such series and no other Event of Default had occurred and not
been cured or waived during such period. (Section 502) The Holders of a
majority in principal amount of the Debt Securities of any series outstanding
also have the right to waive certain past defaults under the Indenture.
(Section 513)
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No Holder of Debt Securities of any series issued under the Indenture has
any right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless (i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default under the Indenture, (ii) with
respect to certain Events of Default, the Holders of at least 25% in principal
amount of the outstanding Debt Securities of such series issued thereunder
have made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee under the Indenture, and (iii) with
respect to certain Events of Default, the Trustee has not received from the
Holders of a majority in principal amount of the outstanding Debt Securities
of such series a direction inconsistent with such request and the Trustee has
failed to institute such proceeding within 60 days after receipt of such
notice. (Section 507) Such limitations do not apply, however, to a suit
instituted by a Holder of a Debt Security of a series for the enforcement of
payment of the principal of or premium, if any, or interest on such Debt
Security on or after the respective due dates expressed in such Debt Security.
(Section 508)
During the existence of an Event of Default, the Trustee is required to
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise thereof as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs. Subject to the provisions of the Indenture relating to the duties of
the Trustee, in case an Event of Default shall occur and be continuing, the
Trustee is not under any obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders unless
such Holders shall have offered to the Trustee reasonable security or
indemnity. (Section 602) Subject to such provisions for the indemnification of
the Trustee, the Holders of a majority in principal amount of the outstanding
Debt Securities of any series have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust of power conferred on the Trustee under the Indenture.
(Section 512)
The Company is required to furnish to the Trustee an annual statement as to
the performance by the Company of its obligations under the Indenture, and as
to any default in such performance. (Section 1013)
SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE DEBT SECURITIES
The Indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Debt Securities of any
series outstanding under the Indenture, as expressly provided for therein) as
to such series when either (i) all Debt Securities of such series outstanding
thereunder theretofore authenticated and delivered have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it under
the Indenture or (ii) all Debt Securities of such series not theretofore
delivered to the Trustee for cancellation (a) have become due and payable, or
(b) will become due and payable within one year, or (c) are to be called for
redemption within one year, and the Company has irrevocably deposited or
caused to be deposited with the Trustee funds in an amount sufficient to pay
the entire indebtedness on the Debt Securities of such series not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest to the date of deposit (if the Debt Securities of such series are
then due and payable) or to the applicable maturity or redemption date (as the
case may be), and the Company has paid all sums payable by it under the
Indenture. (Section 401)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture or the Debt Securities of any
series may be made by the Company and the applicable Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of
the outstanding Debt Securities at the time outstanding of each series to be
affected under the Indenture; provided, however, that no such modification or
amendment may, without the consent of the Holder of each outstanding Debt
Security of such series, (i) change the stated maturity of the principal of,
or premium, if any, or any installment of interest on, any Debt Securities of
such series, (ii) reduce the principal amount of, or the premium, if any, or
interest on, the Debt Securities of such series, (iii) change the coin or
currency in which any Debt Securities of such series or any premium or the
interest thereon is payable, (iv) impair the right to institute suit for the
enforcement of any payment on or with respect to the Debt Securities of
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such series, (v) reduce the percentage in principal amount of outstanding Debt
Securities of such series necessary to waive compliance with certain
provisions of the Indenture or to waive certain defaults, (vi) modify any of
the provisions relating to supplemental indentures requiring the consent of
Holders or relating to the waiver of past defaults, except to increase the
percentage of outstanding Debt Securities of such series required for such
actions or to provide that certain other provisions of the Indenture cannot be
modified or waived without the consent of the Holder of each Debt Security of
such series affected thereby, or (vii) modify any of the provisions of the
Indenture relating to the subordination of the Debt Securities of such series
in a manner adverse to the Holders thereof. (Sections 901 and 902)
The Holders of a majority in aggregate principal amount of the Debt
Securities of any series then outstanding under the Indenture may waive
compliance with certain restrictive covenants and provisions of the Indenture
with respect to such series. (Section 1014)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets to, any Person, unless: (i) the entity formed by such consolidation
or merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or disposition shall have been made shall be a
corporation organized and existing under the laws of the United States or any
State thereof or the District of Columbia, and shall assume by a supplemental
indenture all the obligations of the Company under the Outstanding Debt
Securities and the Indenture; (ii) immediately before and immediately after
such transaction, after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing; and (iii) immediately after such
transaction, and after giving effect thereto, the Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease or conveyance or disposition shall have been made shall have a
Cash Flow Ratio not in excess of 9 to 1. (Section 801)
DEFEASANCE
If the Prospectus Supplement relating to the offered Debt Securities (the
"Offered Debt Securities") so provides, the Company at its option at any time
may terminate all of its obligations with respect to the Debt Securities of
any series ("defeasance"), except for certain obligations, including those
regarding the Defeasance Trust (as defined below) and obligations to register
the transfer or exchange of the Debt Securities of such series, to replace
mutilated, destroyed, lost or stolen Debt Securities of such series and to
maintain agencies in respect of the Debt Securities of any series. The Company
may also at any time terminate its obligations under the covenants set forth
in the Indenture, which are described under "--Covenants of the Company", and
any omission to comply with such obligations shall not constitute a Default or
an Event of Default with respect to the Debt Securities of such series
("covenant defeasance"). (Sections 1402, 1403 and 1404)
In order to exercise either defeasance or covenant defeasance with respect
to Debt Securities of a series, (i) the Company must irrevocably deposit in
trust, for the benefit of the holders, with the Trustee money or U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient to pay the principal of and premium, if any, and interest on the
Debt Securities of such series to redemption or maturity (the "Defeasance
Trust"), (ii) the Company must deliver opinions of counsel to the effect that
such Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance or covenant
defeasance had not occurred (in the case of defeasance, such opinion must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable federal income tax laws), (iii) no event or condition
shall exist that, pursuant to certain provisions described under
"Subordination" below, would prevent the Company from making payments of
principal of and premium, if any, and interest on the Debt Securities of such
series at the date of the irrevocable deposit referred to above or at any time
during the period ending on the 91st day after such deposit date, and (iv) the
Company must comply with certain other conditions. (Section 1404)
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SUBORDINATION
Unless otherwise indicated in the applicable Prospectus Supplement, the
following provisions will apply to the Debt Securities of any series.
The indebtedness represented by the Debt Securities is subordinated in right
of payment to the prior payment in full of all Senior Indebtedness. (Section
1201)
Upon the maturity of any Senior Indebtedness, by lapse of time, acceleration
or otherwise, or upon any payment default (with or without the giving of
notice or lapse of time or both in accordance with the terms of the instrument
governing such Senior Indebtedness, and without any waiver or forgiveness)
with respect to any Senior Indebtedness, all obligations with respect to such
Senior Indebtedness must first be paid in full, or such payment duly provided
for, before any payment is made with respect to the Debt Securities or before
any acquisition of Debt Securities by the Company. (Section 1202)
Upon (i) a default with respect to any Senior Indebtedness (other than under
circumstances when the terms of the previous paragraph are applicable), as
such default is defined therein or in the instrument under which it is
outstanding, permitting the holders of Senior Indebtedness to accelerate the
maturity thereof, and (ii) written notice thereof ("Default Notice") given to
the Company and the Trustee by the agent or agents under the Credit Agreement,
then, unless and until such default shall have been cured or waived by the
holders of such Senior Indebtedness or shall have ceased to exist, no direct
or indirect payment may be made by the Company with respect to the principal
of, premium, if any, or interest on the Debt Securities (other than payments
made in Junior Securities) or to acquire any of the Debt Securities or on
account of the redemption provisions of the Debt Securities (except mandatory
redemption payments made, in accordance with the terms of the Debt Securities,
in Debt Securities acquired by the Company before the Default Notice;
provided, however, that such provision shall not prevent the making of any
payment (which is not otherwise prohibited by the previous paragraph) for more
than 120 days after the Default Notice shall have been given unless the Senior
Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Senior
Indebtedness has been paid in full. Notwithstanding the foregoing, not more
than one Default Notice may be given with respect to Senior Indebtedness
within a period of 240 consecutive days.
The Indenture will provide that, upon any payment by or distribution of the
assets of the Company to creditors upon any dissolution, winding up,
liquidation, bankruptcy, reorganization, assignment for the benefit of
creditors, or any insolvency, receivership or similar proceeding relating to
the Company, all Senior Indebtedness must be paid in full, or such payment
duly provided for, before any payment or distribution (other than in Junior
Securities) is made on account of the principal of or premium, if any, or
interest on the Debt Securities. (Section 1203)
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than other creditors of the Company and creditors of the
Company who are not holders of Senior Indebtedness or of the Debt Securities
(or the 10 3/4% Debentures due 2004, the 9 7/8% Debentures due 2013 and the 9
7/8% Debentures due 2023) may recover more, ratably, than the Holders of the
Debt Securities.
A Holder of Debt Securities by his acceptance of Debt Securities agrees to
be bound by such provisions and authorizes and expressly directs the Trustee,
on his behalf, to take such action as may be necessary or appropriate to
effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purpose. (Section 1209)
The Indenture does not limit or prohibit the incurrence of additional Senior
Debt, which may include indebtedness that is senior to the Debt Securities,
but subordinate to other obligations of the Company.
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The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Debt Securities of a particular series.
The Prospectus Supplement will set forth the aggregate amount of Senior
Indebtedness as of the most recent practicable date and any limitation on the
issuance of additional Senior Indebtedness.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 111)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. (Section 612) The
Trustee will be permitted to engage in certain other transactions; however, if
it acquires any conflicting interest and there is a default under the Debt
Securities, it must eliminate such conflict or resign. (Section 607)
The Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect
to such series. (Section 608). In the event that two or more persons are
acting as Trustee with respect to different series of Debt Securities, each
such Trustee shall be a Trustee of a trust under the Indenture separate and
apart from the trust administered by any other such Trustee (Section 611), and
any action described herein to be taken by the "Trustee" may then be taken by
each such Trustee with respect to, and only with respect to, the one or more
series of Debt Securities for which it is Trustee.
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DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 80,000,000 shares of capital stock, of
which 50,000,000 shares are Class A Common Stock, par value $.01 per share,
20,000,000 shares are Class B Common Stock, par value $.01 per share, and
10,000,000 shares are Preferred Stock, par value $.01 per share.
CLASS A COMMON STOCK AND CLASS B COMMON STOCK
All shares of common stock currently outstanding are fully paid and non-
assessable, not subject to redemption and without preemptive or other rights
to subscribe for or purchase any proportionate part of any new or additional
issues of stock of any class or of securities convertible into stock of any
class.
Voting. Holders of Class A Common Stock are entitled to one vote per share.
Holders of Class B Common Stock are entitled to ten votes per share. All
actions submitted to a vote of stockholders are voted on by holders of Class A
Common Stock and Class B Common Stock voting together as a single class,
except for the election of directors and as otherwise set forth below. With
respect to the election of directors, holders of Class A Common Stock will
vote as a separate class and be entitled to elect 25% of the total number of
directors constituting the whole Board of Directors (the "Class A Directors")
and, if such 25% is not a whole number, then the holders of Class A Common
Stock will be entitled to elect the nearest higher whole number of directors
that is at least 25% of the total number of directors. Holders of Class B
Common Stock, voting as a separate class, will be entitled to elect the
remaining directors.
If, however, on the record date for any stockholder meeting at which
directors are to be elected, the number of outstanding shares of Class A
Common Stock is less than 10% of the total number of outstanding shares of
both classes of Common Stock, the holders of Class A Common Stock and Class B
Common Stock will vote together as a single class with respect to the election
of directors and the holders of Class A Common Stock will not have the right
to elect 25% of the total number of directors but will have one vote per share
for all directors and the holders of Class B Common Stock will have ten votes
per share for all directors.
If, on the record date for any stockholder meeting at which directors are to
be elected, the number of outstanding shares of Class B Common Stock is less
than 12 1/2% of the total number of outstanding shares of both classes of
Common Stock, then the holders of Class A Common Stock, voting as a separate
class, would continue to elect a number of Class A Directors equal to 25% of
the total number of directors constituting the whole Board of Directors and,
in addition, would vote together with the holders of Class B Common Stock to
elect the remaining directors to be elected at such meeting, with the holders
of Class A Common Stock entitled to one vote per share and the holders of
Class B Common Stock entitled to ten votes per share.
In addition, the affirmative vote or consent of the holders of at least 66
2/3% of the outstanding shares of Class B Common Stock, voting separately as a
class, is required for the authorization or issuance of any additional shares
of Class B Common Stock and for any amendment, alteration or repeal of any
provisions of the Company's Restated Certificate of Incorporation which would
affect adversely the powers, preferences or rights of the Class B Common
Stock. The Company's Restated Certificate of Incorporation does not provide
for cumulative voting.
Conversion. The Class A Common Stock has no conversion rights. The Class B
Common Stock is convertible into Class A Common Stock in whole or in part at
any time and from time to time on the basis of one share of Class A Common
Stock for each share of Class B Common Stock.
Dividends. Holders of Class A Common Stock and Class B Common Stock are
entitled to receive dividends equally on a per share basis if and when such
dividends are declared by the Board of Directors from funds legally available
therefor. No dividend may be declared or paid in cash or property on shares of
either Class A Common Stock or Class B Common Stock unless the same dividend
is paid simultaneously on each
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share of the other class of common stock. In the case of any stock dividend,
holders of Class A Common Stock are entitled to receive the same percentage
dividend (payable in shares of Class A Common Stock) as holders of Class B
Common Stock receive (payable in shares of Class B Common Stock). On June 14,
1994, stockholders approved an amendment to the Company's Restated Certificate
of Incorporation to permit the distribution of shares of capital stock of any
subsidiary to common stockholders that differ to the extent that the common
stock differs as to voting rights and rights in connection with certain
dividends.
Liquidation. Holders of Class A Common Stock and Class B Common Stock share
with each other on a ratable basis as a single class in the net assets
available for distribution in respect of Class A Common Stock and Class B
Common Stock in the event of liquidation.
Other Terms. Neither the Class A Stock nor the Class B Common Stock may be
subdivided, consolidated, reclassified or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
In any merger, consolidation or business combination the consideration to be
received per share by holders of either Class A Common Stock or Class B Common
Stock must be identical to that received by holders of the other class of
Common Stock, except that in any such transaction in which shares of capital
stock are distributed, such shares may differ as to voting rights only to the
extent that voting rights now differ between Class A Common Stock and Class B
Common Stock.
Restrictions on Ownership. Transfer of shares of Class A Common Stock or
Class B Common Stock which could result in a change of control of the Company
may require the approval of state agencies or local franchising authorities in
certain states in which the Company operates.
Transfer Agent. The Company's transfer agent and registrar for the Class A
Common Stock is Mellon Securities Trust Company.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series. The description set forth below is subject
to and qualified in its entirety by reference to the certificate of
designations establishing a particular series of Preferred Stock, which will
be filed with the Commission in connection with the offering of such series.
General. Under the Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action, to provide for
the issuance of up to 10,000,000 shares of Preferred Stock in one or more
series. The powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions, including dividend rights, voting rights, conversion rights,
terms of redemption and liquidation preferences, of the Preferred Stock of
each series will be fixed or designated by the Board of Directors pursuant to
a certificate of designations. The specific terms of a particular series of
Preferred Stock offered hereby will be described in a Prospectus Supplement
relating to such series and will include the following: (a) the maximum number
of shares to constitute the series and the distinctive designation thereof;
(b) whether the shares of such series shall have voting rights, in addition to
any voting rights provided by law, and, if so, the terms of such voting
rights; (c) the dividend rate, if any, on the shares of such series, the
conditions and dates upon which such dividends shall be payable, the
preference or relation which such dividends shall bear to the dividends
payable on any other class or classes or on any other series of capital stock,
and whether such dividends shall be cumulative or non-cumulative; (d) whether
the shares of such series shall be subject to redemption by the Company, and,
if made subject to redemption, the times, prices and other terms and
conditions of such redemption; (e) the rights of the holders of shares of such
series upon the liquidation, dissolution or winding up of the Company; (f)
whether or not the shares of such series shall be subject to the operation of
a retirement or sinking fund, and, if so, the extent to and manner in which
any such retirement or
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sinking fund shall be applied to the purchase or redemption of the shares of
such series for retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof; (g) whether or not the shares of
such series shall be convertible into, or exchangeable for, shares of stock of
any other class or classes, or of any other series of the same class, and if
so convertible or exchangeable, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same; (h) the
limitations and restrictions, if any, to be effective while any shares of such
series are outstanding upon the payment of dividends or making of other
distributions on, and upon the purchase, redemption or other acquisition by
the Company of, the Class A Common Stock, the Class B Common Stock or any
other class or classes of stock of the Company ranking junior to the shares of
such series either as to dividends or upon liquidation; (i) the conditions or
restrictions, if any, upon the creation of indebtedness of the Company or upon
the issue of any additional stock (including additional shares of such series
or of any other series or of any other class) ranking on a parity with or
prior to the shares of such series as to dividends or distribution of assets
on liquidation, dissolution or winding up; (j) whether fractional interests in
shares of the series will be offered in the form of Depositary Shares as
described below under "Description of Depositary Shares"; and (k) any other
preference and relative, participating, optional or other special rights or
qualifications, limitations or restrictions thereof.
The Preferred Stock will, when issued, be fully paid and nonassessable.
The transfer agent, registrar and dividend disbursement agent for a series
of Preferred Stock will be selected by the Company and will be described in
the applicable Prospectus Supplement. The registrar for shares of Preferred
Stock will send notices to stockholders of any meetings at which holders of
the Preferred Stock have the right to elect directors of the Company or to
vote on any other matter.
Designated Preferred Stock. The authorized preferred stock of the Company
consists of (1) 200,000 shares of Series B Cumulative Convertible Preferred
Stock, $.01 par value and $100 liquidation value per share (the "Series B
Preferred Stock"), none of which are outstanding, (ii) 112,500 shares of
Series C Cumulative Preferred Stock, $.01 par value and $100 liquidation value
per share (the "Series C Preferred Stock"), of which 110,622 shares were
outstanding at June 30, 1995, (iii) 112,500 shares of Series D Cumulative
Preferred Stock, $.01 par value and $100 liquidation value per share, none of
which are outstanding (the "Series D Preferred Stock"), (iv) 100,000 shares of
Series E Redeemable Exchangeable Convertible Preferred Stock, $.01 par value
and $1,000 liquidation preference per share (the "Series E Preferred Stock"),
100,000 of which are outstanding at June 30, 1995, (v) 100,000 shares of
Series F Redeemable Preferred Stock, $.01 par value and $1,000 liquidation
preference per share, none of which are outstanding (the "Series F Preferred
Stock"), and (vi) 4,500,000 shares of 11 3/4% Series G Redeemable Exchangeable
Preferred Stock, $.01 par value and $100 initial liquidation preference per
share, 2,500,000 shares of which were issued on September 26, 1995 and are
outstanding (the "Series G Preferred Stock" and the Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock,
Series F Preferred Stock and Series G Preferred Stock are hereinafter
sometimes collectively referred to as the "Preferred Stock"). The Series A
Preferred Stock, $.01 par value, was cancelled by the Board of Directors on
February 2, 1988. The Company does not expect to issue any Series B Preferred
Stock. The Series D Preferred Stock is issuable upon conversion of the Series
C Preferred Stock. The Company expects to redeem the Series E Preferred Stock
on November 2, 1995. The Series F Preferred Stock is issuable upon conversion
of the Series E Preferred Stock. The Company does not expect to issue any
Series F Preferred Stock.
The holders of Series B Preferred Stock are entitled, when declared by the
Board of Directors, to dividends at the time legally available at the annual
rate of $12.00 per share prior and in preference to any declaration of payment
of any dividend on the common stock of the Company. The holders of Series C
Preferred Stock and Series D Preferred Stock are entitled, when declared by
the Board of Directors, to dividends at the time legally available at the
annual rate of $8.00 per share prior and in preference to any declaration of
payment of any dividend on the common stock of the Company. The holders of the
Series E Preferred Stock and the Series F Preferred Stock are entitled, when
declared by the Board of Directors, to dividends at the time legally available
at the floating rate of LIBOR plus 2.50% payable prior and in preference to
any declaration of payment of any dividend on the common stock of the Company.
Dividends on the Series E Preferred Stock and Series F Preferred Stock are
payable, at the Company's option, either in cash or registered shares of Class
A Common Stock with a
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value equalling 105% of the required dividend. The right to dividends on
shares of the Preferred Stock are cumulative. In the event of any liquidation,
dissolution or winding up of the Company, the holders of Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock are entitled to
receive a preferential amount equal to $100 for each share of Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock held
plus all dividends (whether or not earned or declared) accrued and unpaid on
such shares of Preferred Stock to the date of final distribution in preference
to any such distribution to the holders of the common stock of the Company. In
the event of any liquidation, dissolution or winding up of the Company, the
holders of Series E Preferred Stock and Series F Preferred Stock are entitled
to receive a preferential amount equal to $1,000 for each share of Series E
Preferred Stock and Series F Preferred Stock held plus all dividends (whether
or not earned or declared) accrued and unpaid on such shares of Preferred
Stock to the date of final distribution in preference to any such distribution
to the holders of the common stock of the Company.
The Company at its option may, but shall not be required to, redeem, at any
time and from time to time, on not less than 30 days nor more than 60 days
prior notice, any or all of the shares of Series B Preferred Stock then
outstanding at a price of $100 per share plus all dividends (whether or not
earned or declared) accrued and unpaid on the shares of Series B Preferred
Stock to the date fixed for redemption (the "Series B Preferred Stock
Redemption Price"). During the period ending 30 years from the date of
authorization, no such redemption may be made unless the closing price per
share of the Class A Common Stock on any 20 trading days within a period of 30
consecutive trading days preceding the date of the notice of redemption was at
least 150% of the conversion price of the Series B Preferred Stock. Commencing
30 years from the date of authorization, the Series B Preferred Stock may be
redeemed at the Series B Preferred Stock Redemption Price at any time.
At any time and from time to time commencing on December 31, 1997, the
holders of Series C Preferred Stock and Series D Preferred Stock may require
the Company to redeem, upon 30 days' notice to the Company, any or all of the
shares of Series C Preferred Stock and Series D Preferred Stock then
outstanding at a price equal to the lesser of (i) $100 per share or (ii) the
present value of $100, discounted from December 31, 2007 to the date of such
redemption, plus, in each case, all dividends (whether or not earned or
declared) accrued and unpaid on the shares of Series C Preferred Stock and
Series D Preferred Stock to the date fixed for redemption (the "Series C
Preferred Stock and Series D Preferred Stock Redemption Price"). The Company
may, at its option, upon notice to the holders requesting redemption within 20
days of such holders' notice to the Company, convert all or part of such
shares of Series C Preferred Stock into Class B Common Stock and all or part
of such shares of Series D Preferred Stock into Class A Common Stock. The
Company at its option may, but shall not be required to, redeem, at any time
and from time to time after December 31, 1997 on not less than 30 days' nor
more than 60 days' prior notice, any or all of the shares of Series C
Preferred Stock and Series D Preferred Stock then outstanding at the Series C
Preferred Stock and Series D Preferred Stock Redemption Price.
At any time and from time to time until three days prior to a redemption by
the Company, any holder of Series B Preferred Stock may elect to convert such
shares into that number of shares of Class A Common Stock determined by
dividing $100 plus an amount equal to all dividends (whether or not earned or
declared) accrued or unpaid on any shares of Series B Preferred Stock being
converted by $19.575. If the Company elects to convert any shares of Series C
Preferred Stock or Series D Preferred Stock after a demand for redemption by
such holders, the number of shares to be issued by the Company shall be
calculated by dividing the applicable Series C Preferred Stock and Series D
Preferred Stock Redemption Price by the average of the market price of a share
of Class A Common Stock for the 30 trading days preceding the date on which a
holder gives notice of its election to convert such shares. Holders of Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock have
no voting rights except as to which they may be entitled under the laws of the
State of Delaware.
The Company may, at its option, on not less than 30 days' nor more than 60
days' prior notice, redeem any or all of the shares of Series E Preferred
Stock or Series F Preferred Stock, at a redemption price, payable in cash,
equal to $1,000 per share plus all dividends (whether or not earned or
declared) accrued and unpaid on the shares of the Series E Preferred Stock or
Series F Preferred Stock to the date fixed for redemption. The Company has
given such notice with respect to the Series E Preferred Stock and intends to
redeem the Series E Preferred Stock on November 2, 1995.
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The Series G Preferred Stock, with respect to dividends and distributions
upon the liquidation, winding-up and dissolution of the Company, ranks (i)
senior to all classes of Common Stock and each other class of capital stock or
series of preferred stock established by the Board of Directors (except as set
forth below) which does not expressly provide that it ranks senior to the
Series G Preferred Stock as to dividends and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Junior Stock"); (ii) on a parity with the Series B Preferred Stock,
Series C Preferred Stock (after the Series E Preferred Stock is no longer
outstanding), Series D Preferred Stock and any other class of capital stock or
series of preferred stock issued by the Company established after the initial
issuance of the Series G Preferred Stock by the Board of Directors, the terms
of which expressly provide that such class or series will rank on a parity
with the Series G Preferred Stock as to dividends and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Parity Securities"); and (iii) junior to the Series C Preferred Stock
(so long as the Series E Preferred Stock is outstanding), the Series E
Preferred Stock, the Series F Preferred Stock and each class of capital stock
or series of preferred stock issued by the Company established after the
initial issuance of the Series G Preferred Stock by the Board of Directors,
the terms of which specifically provide that such class or series will rank
senior to the Series G Preferred Stock as to dividends and distributions upon
the liquidation, winding-up and dissolution of the Company (collectively
referred to as "Senior Securities").
The holders of Series G Preferred Stock are entitled, when declared by the
Board of Directors, to dividends at the annual rate of 11 3/4% per share of
Series G Preferred Stock. The right to dividends on the Series G Preferred
Stock is cumulative (whether or not earned or declared). Before October 1,
2000, dividends may, at the option of the Company, be paid either in cash or
fully paid and non-assessable shares of Series G Preferred Stock with an
aggregate liquidation preference equal to the amount of such dividend. On and
after October 1, 2000, dividends may only be paid in cash. If any dividend (or
portion thereof) payable on any dividend payment date on or after October 1,
2000 is not paid in full in cash on the dividend payment date therefor, the
amount of such dividend that is payable and that is not paid in cash on such
date will increase at the rate of 11 3/4% per annum from such dividend payment
date until paid in full.
No full dividends may be declared or paid or funds set apart for the payment
of dividends on any Parity Securities for any period unless full cumulative
dividends shall have been paid or set apart for such payment on the Series G
Preferred Stock. If full dividends are not so paid, the Series G Preferred
Stock shall share dividends pro rata with the Parity Securities. Subject to
certain exceptions set forth in the Certificate of Designations for the Series
G Preferred Stock, no dividends may be paid or set apart for such payment on
Junior Stock (except dividends on Junior Stock in additional shares of Junior
Stock), and no Junior Stock may be repurchased, redeemed or otherwise retired
nor may funds be set apart for payment with respect thereto, if full dividends
have not been paid on the Series G Preferred Stock.
The Company may redeem the Series G Preferred Stock at any time after
October 1, 2002, in whole or in part, at certain redemption prices. In
addition, the Company may redeem shares of Series G Preferred Stock at any
time before October 1, 1998 at a redemption price per share equal to the
liquidation preference of $100, plus accrued and unpaid dividends plus a
premium of $10 per share, out of the net proceeds of the sale of Junior Stock
to a strategic equity investor or a public offering of Class A Common Stock.
Furthermore, the Company may, at its option, prior to October 1, 2002, redeem
the Series G Preferred Stock at any time within 180 days, at certain
redemption prices, after a Change of Control (as defined in the Certificate of
Designations for the Series G Preferred Stock). On October 1, 2007, the
Company will be required to redeem all outstanding shares of Series G
Preferred Stock.
On or after January 1, 1996, the Company may, at its option, on any
scheduled dividend payment date, exchange the Series G Preferred Stock for the
Company's 11 3/4% Senior Subordinated Debentures due 2007.
In the event of any liquidation, dissolution or winding-up of the Company,
holders of Series G Preferred Stock will be entitled to receive a preferential
amount equal to $100 per share, plus all accrued and unpaid dividends thereon
to the date fixed for liquidation, dissolution or winding-up of the Company
(including an amount equal to a prorated dividend from the last dividend
payment date to the date fixed for liquidation,
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dissolution or winding-up), before any distribution is made on any Junior
Stock. If upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Series G
Preferred Stock and all other Parity Securities are not paid in full, the
holders of the Series G Preferred Stock and the Parity Securities will share
equally and ratably in any distribution of assets of the Company in proportion
to the full liquidation preference to which each is entitled. After payment of
the full amount of the liquidation preferences to which they are entitled, the
holders of shares of Series G Preferred Stock will not be entitled to any
further participation in any distribution of assets of the Company.
Holders of the Series G Preferred Stock will have no voting rights with
respect to general corporate matters except as provided by law or as set forth
in the Certificate of Designations therefor. The Certificate of Designations
for the Series G Preferred Stock provides that if (a) dividends on the Series
G Preferred Stock are in arrears and unpaid (and if after October 1, 2000,
such dividends are not paid in cash) for six quarterly periods (whether or not
consecutive), or (b) the Company fails to discharge its redemption obligation
to redeem the Series G Preferred Stock on October 1, 2007, then the number of
directors constituting the Board of Directors will be adjusted to permit the
holders of the majority of the then outstanding Series G Preferred Stock,
voting as a class, to elect a director. Such voting rights will continue until
such time as all dividends in arrears on the Series G Preferred Stock are paid
in full (and in the case of dividends payable after October 1, 2000, paid in
cash) and any failure, breach or default referred to in clause (b) is
remedied, at which time the term of the directors elected pursuant to the
provisions of this paragraph shall terminate. Each such event described in
clauses (a) and (b) above is referred to herein as a "Voting Rights Triggering
Event."
The Certificate of Designations for the Series G Preferred Stock also
provides that the Company will not authorize any class of Senior Securities
without the affirmative vote or consent of holders of at least a majority of
the shares of Series G Preferred Stock then outstanding, voting or consenting,
as the case may be, separately as one class. The Company may not amend the
Certificate of Designations for the Series G Preferred Stock so as to affect
adversely the specified rights, preferences, privileges or voting rights of
holders of shares of the Series G Preferred Stock, or authorize the issuance
of any additional shares of Series G Preferred Stock, without the affirmative
vote or consent of the holders of at least a majority of the outstanding
shares of Series G Preferred Stock, voting or consenting, as the case may be,
as one class.
Without the affirmative vote or consent of the holders of a majority of the
issued and outstanding shares of Series G Preferred Stock, the Company may not
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any person
unless: (a) the entity formed by such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made shall be a corporation organized or
existing under the laws of the United States or any State thereof or the
District of Columbia; (b) the Series G Preferred Stock shall be converted into
or exchanged for and shall become shares of such successor, transferee or
resulting corporation, having in respect of such successor, transferee or
resulting corporation the same powers, preferences and relative participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereon, that the Series G Preferred Stock had immediately prior
to such transactions; and (c) immediately after giving effect to such
transaction, no Voting Rights Triggering Event shall have occurred or be
continuing. Notwithstanding the foregoing, the Company may consolidate or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to, any person if the
Company makes adequate provision (i) prior to October 1, 2002, to redeem the
Series G Preferred Stock after a Change of Control (as defined in the
Certificate of Designations for the Series G Preferred Stock) or (ii) on or
after October 1, 2002, to redeem the Series G Preferred Stock at the
applicable redemption price set forth in the Certificate of Designations
therefor.
Upon redemption or conversion, shares of Preferred Stock shall be cancelled.
Holders of Preferred Stock have no preemptive or other rights to subscribe for
or purchase any proportionate part of any new or additional issues of stock of
any class or of securities convertible into stock of any class.
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DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement and of the Depositary Shares and
Depositary Receipts (as those terms are defined below) does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
form of Deposit Agreement and form of Depositary Receipts which are filed as
an exhibit to the Registration Statement of which this Prospectus is a part.
GENERAL
The Company may, at its option, elect to offer fractional shares, rather
than full shares, of any series of Preferred Stock. Each such fractional share
of Preferred Stock will be represented by a depositary share (collectively,
the "Depositary Shares") pursuant to the terms of a Deposit Agreement (the
"Deposit Agreement") among a bank or trust company selected by the Company
(the "Depositary") and all holders from time to time of depositary receipts
issued thereunder (the "Depositary Receipts"). The Depositary Shares will be
evidenced by Depositary Receipts. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, proportionately,
to all the rights, preferences and privileges of the fractional share of
Preferred Stock represented thereby (including dividend, voting and
liquidation rights), and will be subject to all of the limitations of the
fractional share of Preferred Stock represented thereby, which are either
summarized above under "Description of Capital Stock" or set forth in the
Prospectus Supplement relating to such series of Preferred Stock.
ISSUANCE OF DEPOSITARY RECEIPTS AND WITHDRAWAL OF PREFERRED STOCK FROM DEPOSIT
Immediately following the issuance by the Company of the shares of any
series of Preferred Stock to be represented by Depositary Shares, the Company
will deposit such shares of Preferred Stock with the Depositary, which will
then issue and deliver the Depositary Receipts to the Company. The Company
will, in turn, deliver the Depositary Receipts to the purchasers of the
Preferred Stock. Depositary Receipts will be issued evidencing only whole
Depositary Shares.
Upon surrender of Depositary Receipts at the Corporate Office (as defined in
the Deposit Agreement) of the Depositary (or such other office as the
Depositary may designate), the owner of the Depositary Shares evidenced
thereby is entitled at such office to certificates evidencing the number of
shares of Preferred Stock (but only in whole shares of Preferred Stock)
represented by such Depositary Receipts. If the Depositary Receipts delivered
by the holder evidence a number of Depositary Shares in excess of the number
of whole shares of Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares representing such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Depositary resulting from the redemption, in whole or
in part, of such series of the Preferred Stock held by the Depositary. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of the
Preferred Stock. If less than all the Depositary Shares are to be redeemed,
the Depositary Shares to be redeemed will be selected by lot or pro rata.
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After the date fixed for redemption (which will be the same date as the
redemption date for the Preferred Stock), the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will
endeavor, insofar as practicable, to vote the number of shares of Preferred
Stock underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent the Depositary
does not receive specific instructions from the holders of Depositary Shares
relating to such shares.
AMENDMENT OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which imposes
or increases any fees, taxes, or other changes upon holders of Depositary
Receipts (other than taxes and other governmental charges, fees, and other
expenses payable by such holders as stated under "Charges of Depositary"), or
which otherwise prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding Depositary
Receipts until the expiration of 30 days after notice of such amendment has
been mailed to the record holders of outstanding Depositary Receipts. Every
holder of Depositary Receipts at the time any such amendment becomes effective
shall be deemed to consent and agree to such amendment and to be bound by the
Deposit Agreement.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
that arise solely from the existence of the depositary arrangements. The
Company will pay the charges of the Depositary in connection with the initial
deposit of the Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Shares will pay all other transfer and other taxes and
governmental charges, and, in addition, such other charges as are expressly
provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which the Company is required to furnish
to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstances beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceedings in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares
or other persons believed to be competent and on documents believed to be
genuine.
30
<PAGE>
RESIGNATION AND REMOVAL OF DEPOSITARY; TERMINATION OF THE DEPOSIT AGREEMENT
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary will be appointed by the Company within 45 days after delivery of
the notice of resignation or removal. The Deposit Agreement may be terminated
at the direction of the Company or by the Depositary if a period of 45 days
shall have expired after the Depositary has delivered to the Company written
notice of its election to resign and a successor depositary shall not have
been appointed. Upon termination of the Deposit Agreement, the Depositary will
discontinue the transfer of Depositary Receipts, will suspend the distribution
of dividends to the holders thereof, and will not give any further notices
(other than notice of such termination) or perform any further acts under the
Deposit Agreement except that the Depositary will continue to collect
dividends and other distributions pertaining to the Preferred Stock, will sell
rights, preferences or privileges as provided in the Deposit Agreement and
will continue to deliver Preferred Stock certificates together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges, or other property in exchange for Depositary Receipts
surrendered. At any time after the expiration of two years from the date of
termination, the Depositary may sell the Preferred Stock and hold the proceeds
of such sale, without interest, for the benefit of the holders of Receipts who
have not then surrendered their Receipts. After making such sale, the
Depositary will be discharged from all obligations under the Deposit Agreement
except to account for such proceeds. In the event the Deposit Agreement is
terminated, the Company will use its best efforts to list the underlying
shares of Preferred Stock on any stock exchange on which such Depositary
Shares were listed.
DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase Debt Securities ("Debt Warrants")
and other Securities. Warrants may be issued independently or together with
any Securities and may be attached to or separate from such Securities. The
Warrants are to be issued under warrant agreements (each, a "Warrant
Agreement") to be entered into between the Company and a bank or trust
company, as warrant agent (the "Warrant Agent"), all as shall be set forth in
the Prospectus Supplement relating to Warrants being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including
the following: (1) the title of such Debt Warrants; (2) the aggregate number
of such Debt Warrants; (3) the price or prices at which such Debt Warrants
will be issued; (4) the designation, aggregate principal amount and terms of
the Debt Securities purchasable upon exercise of such Debt Warrants, and the
procedures and conditions relating to the exercise of such Debt Warrants; (5)
the designation and terms of any related Debt Securities with which such Debt
Warrants are issued, and the number of such Debt Warrants issued with each
such Debt Security; (6) the date, if any, on and after which such Debt
Warrants and the related Debt Securities will be separately transferable; (7)
the principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant, and the price at which and the currency, including composite currency
or currency unit, in which such principal amount of Debt Securities may be
purchased upon such exercise; (8) the date on which the right to exercise such
Debt Warrants shall commence, and the date on which such right shall expire;
(9) the maximum or minimum number of such Debt Warrants which may be exercised
at any time; (10) a discussion of material federal income tax considerations,
if any; and (11) any other terms of such Debt Warrants and terms, procedures
and limitations relating to the exercise of such Debt Warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the Prospectus Supplement. Prior to the exercise of their Debt Warrants,
holders of Debt Warrants will not have any of the rights of holders of the
Debt Securities purchasable upon such exercise and will not be
31
<PAGE>
entitled to payments of principal of (or premium, if any) or interest, if any,
on the Debt Securities purchasable upon such exercise.
OTHER WARRANTS
The Company may issue Warrants to purchase shares of Preferred Stock,
including Depositary Shares, and Class A Common Stock. The applicable
Prospectus Supplement will describe the following terms of any such other
Warrants in respect of which this Prospectus if being delivered: (1) the title
of such Warrants; (2) the Securities for which such Warrants are exercisable;
(3) the price or prices at which such Warrants will be issued; (4) if
applicable, the designation and terms of the Preferred Stock with which such
Warrants are issued, and the number of such Warrants issued with each such
share of Preferred Stock or Class A Common Stock; (5) if applicable, the date
on and after which such Warrants and the related Preferred Stock or Class A
Common Stock will be separately transferable; (6) if applicable, a discussion
of material federal income tax considerations; and (7) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount or number of shares of Securities at such exercise price as
shall in each case be set forth in, or be determinable as set forth in, the
Prospectus Supplement relating to the Warrants offered thereby. Warrants may
be exercised at any time up to the close of business on the expiration date
set forth in the Prospectus Supplement relating to the Warrants offered
thereby. After the close of business on the expiration date, unexercised
Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants represented
by such warrant certificate are exercised, a new warrant certificate will be
issued for the remaining Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter, selling group or agent involved in the
offer and sale of the Securities will be named in the related Prospectus
Supplement. The Company has reserved the right to sell the Securities directly
to investors on its own behalf in those jurisdictions where it is authorized
to do so.
Underwriters may offer and sell the Securities at a fixed price or prices
that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Company also may, from time to time, authorize dealers, acting as the
Company's agents, to offer and sell the Securities upon such terms and
conditions as set forth in the related Prospectus Supplement. In connection
with the sale of the Securities, underwriters may receive compensation from
the Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Securities for whom they may act as
agent. Underwriters may sell the Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed
from time to time) from the purchasers for whom they may act as agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the related Prospectus Supplement. Dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts and commissions received
32
<PAGE>
by them and any profit realized by them on resale of the Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification against and contribution towards
certain civil liabilities, including any liabilities under the Securities Act.
If so indicated in the related Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit agreements by
certain institutions to purchase the Securities from the Company at the public
offering price set forth in the related Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in a Prospectus Supplement. Each Contract will be for
an amount specified in the applicable Prospectus Supplement. Institutions,
with whom Contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to the approval of the Company. Contracts will not be
subject to any conditions except that (i) the purchase by an institution of
the Securities covered by Contracts will not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
such institution is subject and (ii) if the Securities are being sold to
Underwriters, the Company shall have sold to such Underwriters such amount
specified in the applicable Prospectus Supplement.
Any Securities issued hereunder (other than Class A Common Stock) will be
new issues of securities with no established trading market. Any underwriters
or agents to or through whom such Securities are sold by the Company for
public offering and sale may make a market in such Securities, but such
underwriters or agents will not be obligated to do so and may discontinue any
market at any time without notice. No assurance can be given as to the
liquidity of the trading market for any such Securities.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with, and perform services for, the Company and certain
of its affiliates in the ordinary course of business.
VALIDITY OF THE SECURITIES
The validity of any Securities issued hereunder will be passed upon for the
Company by Sullivan & Cromwell, New York, New York, counsel to the Company.
Unless otherwise specified in the applicable Prospectus Supplement, the
validity of any Securities issued hereunder will be passed upon for any
underwriters by Shearman & Sterling, New York, New York.
EXPERTS
The consolidated financial statements and schedules of the Company and its
subsidiaries as of December 31, 1994 and 1993 and for each of the years in the
three-year period ended December 31, 1994 that are incorporated in this
Prospectus by reference have been incorporated herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements and schedules of A-R Cable Services,
Inc. and its subsidiaries as of December 31, 1994 and 1993 and for each of the
years in the three-year period ended December 31, 1994 that are incorporated
in this Prospectus by reference have been incorporated herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick, LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Cablevision of Boston Limited
Partnership as of December 31, 1994 and 1993 and for each of the years in the
three-year period ended December 31, 1994 that are incorporated in this
Prospectus by reference have been incorporated herein and in the Registration
Statement in reliance upon
33
<PAGE>
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The financial statements of American Movie Classics Company as of and for
the years ended December 31, 1993 and 1992 that are incorporated in this
Prospectus by reference have been incorporated herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The financial statements of Monmouth Cablevision Associates, Riverview
Cablevision Associates, L.P. and Framingham Cablevision Associates, Limited
Partnership each as of and for the years ended December 31, 1993 and 1992 that
are incorporated in this Prospectus by reference have been incorporated herein
and in the Registration Statement in reliance upon the report of Deloitte &
Touche LLP, independent auditors, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
34
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
It is expected that the following expenses (all of which will be paid by the
Company) will be incurred in connection with the registration and distribution
of the Securities:*
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee................ $ 344,828
Blue Sky fees and expenses................................... 15,000
Legal fees and expenses...................................... 650,000
Accounting fees and expenses................................. 175,000
Printing and Engraving Expenses.............................. 200,000
Trustee's, Transfer Agent's and Depositary's fees and ex-
penses...................................................... 50,000
Miscellaneous................................................ 141,172
----------
Total.................................................... $1,576,000
==========
</TABLE>
* All of these expenses except the Securities and Exchange Commission filing
fee represent estimates only.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees
and individuals against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such action, and the statute requires court approval before there can be
any indemnification where the person seeking indemnification has been found
liable to the corporation. The statute provides that it is not exclusive of
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise.
The first paragraph of Article Ninth of the Company's Certificate of
Incorporation provides:
The corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, or by any successor thereto, indemnify any and
all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters
referred to in or covered by said section. Such right to indemnification
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. The indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote
of stockholders or disinterested directors or otherwise.
Article VIII of the By-Laws of the Company provides:
A. The corporation shall indemnify each person who was or is made a party
or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of
the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect
II-1
<PAGE>
to employee benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or
alleged action in any other capacity while serving as a director, officer,
employee or agent, to the maximum extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment
permits the corporation to provide broader indemnification rights than said
law permitted the corporation to provide prior to such amendment), against
all expense, liability and loss (including attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred by such person in connection with such
proceeding. Such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators. The right to
indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition;
provided that, if the Delaware General Corporation Law so requires, the
payment of such expenses incurred by a director or officer in advance of
the final disposition of a proceeding shall be made only upon receipt by
the corporation of an undertaking by or on behalf of such person to repay
all amounts so advanced if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized
in this Article or otherwise.
B. The right to indemnification and advancement of expenses conferred on
any person by this Article shall not limit the corporation from providing
any other indemnification permitted by law nor shall it be deemed exclusive
of any other right which any such person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
C. The corporation may purchase and maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
The Company has entered into indemnification agreements with certain of its
officers and directors indemnifying such officers and directors from and
against certain expenses, liabilities or other matters referred to in or
covered by Section 145 of the Delaware General Corporation Law. The Company
has also entered into an agreement with Charles F. Dolan ("Mr. Dolan"), the
Chairman of the Company, pursuant to which Mr. Dolan has agreed to guarantee
the Company's obligation to indemnify its officers and directors to the
fullest extent permitted by Delaware law. In addition, subject to certain
limitations, Mr. Dolan has agreed to indemnify such officers and directors
against any loss or expense such person may incur in connection with any
transaction involving Mr. Dolan or entities affiliated with Mr. Dolan to the
extent indemnification is not provided by the Company. Any payment required to
be made by Mr. Dolan pursuant to such agreement will be reduced by any
proceeds of insurance or reimbursement under any other form of indemnification
reimbursement available to such officer or director. The Company maintains
directors' and officers' liability insurance.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit. The second paragraph of Article Ninth of the
Company's Certificate of Incorporation provides for such limitation of
liability.
II-2
<PAGE>
ITEM 16. EXHIBITS.
1.1 --Form of Underwriting Agreement for Debt Securities
1.2 --Form of Underwriting Agreement for Common Stock
4.1 --Certificate of Incorporation of the Registrant (incorporated herein by
reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 dated January 17, 1986, File No. 33-1936)
4.1A --Amendment to Certificate of Incorporation and complete copy of amended
and restated Certificate of Incorporation (incorporated herein by
reference to Exhibits 3.1A(i) and 3.1A(ii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989)
4.1B --Certificate of Designations for the Series E Redeemable Exchangeable
Convertible Preferred Stock (incorporated herein by reference to the
Company's Report on Form 10-K/A for the year ended December 31, 1993,
filed on April 13, 1994)
4.1C --Certificate of Designations for the Series F Redeemable Preferred
Stock (incorporated herein by reference to the Company's Report on Form
10-K/A for the year ended December 31, 1993, filed on April 13, 1994)
4.1D --Certificate of Designations for the Series G Redeemable Exchangeable
Preferred Stock (incorporated by reference herein to Exhibit 3.1D to
the Company's Registration Statement on Form S-4 dated October 17,
1995, File No. 33-62717.)
4.2 --Amended and restated By-laws (incorporated herein by reference to
Exhibit 3.2D to the Company's Registration Statement on Form S-4 dated
October 17, 1995, File No. 33-62717.)
4.3 --Form of Certificate for shares of Common Stock (incorporated herein by
reference to the Company's Registration Statement on Form S-1, dated
January 17, 1986, File No. 33-1936)
4.4 --Form of Indenture between the Company and the Trustee
*4.5 --Form of Deposit Agreement
*4.6 --Form of Depositary Receipt
*4.7 --Form of Warrant Agreement
*4.8 --Form of Warrant Certificate
5.1 --Opinion of Sullivan & Cromwell
12 --Computation of Ratio of Deficiency of Earnings to Fixed Charges and
Fixed Charges and Preferred Stock Dividends
23.1 --Consent of Sullivan & Cromwell (contained in Exhibit 5.1)
23.2 --Consents of KPMG Peat Marwick LLP
23.3 --Consent of Deloitte & Touche LLP
**24 --Powers of Attorney
25.1 --Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee under the Indenture
- --------
* To be filed as an exhibit to a Current Report on Form 8-K subsequent to the
effectiveness of this Registration Statement, in accordance with Item
601(b)(1) of Regulation S-K.
** Previously filed.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, pursuant to the provisions described
in Item 15 or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by any such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether or not such indemnification is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE TOWN OF OYSTER BAY AND THE STATE OF NEW
YORK, ON THE 16TH DAY OF OCTOBER, 1995.
Cablevision Systems Corporation
By: /s/ James L. Dolan
----------------------------------
Name: James L. Dolan
Title: Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON
OCTOBER 16, 1995.
SIGNATURE TITLE
/s/ James L. Dolan Chief Executive Officer (Principal
- ------------------------------------- Executive Officer) and Director
JAMES L. DOLAN
* Chairman of the Board of Directors
- -------------------------------------
CHARLES F. DOLAN
Senior Vice President--Finance and
* Treasurer (Principal Financial
- ------------------------------------- Officer)
BARRY J. O'LEARY
Vice President and Controller
* (Principal Accounting Officer)
- -------------------------------------
JERRY SHAW
Vice Chairman and Director
*
- -------------------------------------
WILLIAM J. BELL
*
Vice Chairman and Director
- -------------------------------------
MARC A. LUSTGARTEN
II-5
<PAGE>
SIGNATURE TITLE
Executive Vice President, General
/s/ Robert S. Lemle Counsel, Secretary and Director
- -------------------------------------
ROBERT S. LEMLE
Vice President and Director
*
- -------------------------------------
SHEILA A. MAHONY
Director and Chairman of the Executive
- ------------------------------------- Committee
JOHN TATTA
Director
*
- -------------------------------------
PATRICK F. DOLAN
Director
- -------------------------------------
FRANCIS F. RANDOLPH, JR.
Director
*
- -------------------------------------
DANIEL T. SWEENEY
Director
- -------------------------------------
CHARLES D. FERRIS
Director
*
- -------------------------------------
RICHARD H. HOCHMAN
Director
- -------------------------------------
VICTOR ORISTANO
Director
*
- -------------------------------------
A. JERROLD PERENCHIO
*By: /s/ Robert S. Lemle, Attorney-
in-Fact
- -------------------------------------
Robert S. Lemle
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS PAGE NO.
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<C> <S> <C>
1.1 --Form of Underwriting Agreement for Debt Securities......
1.2 --Form of Underwriting Agreement for Common Stock.........
4.1 --Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1 dated
January 17, 1986, File No. 33-1936)......................
4.1A --Amendment to Certificate of Incorporation and complete
copy of amended and restated Certificate of Incorporation
(incorporated herein by reference to Exhibits 3.1A(i) and
3.1A(ii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989).................
4.1B --Certificate of Designations for the Series E Redeemable
Exchangeable Convertible Preferred Stock (incorporated
herein by reference to the Company's Report on Form 10-
K/A for the year ended December 31, 1993, filed on April
13, 1994)................................................
4.1C --Certificate of Designations for the Series F Redeemable
Preferred Stock (incorporated herein by reference to the
Company's Report on Form 10-K/A for the year ended
December 31, 1993, filed on April 13, 1994)..............
4.1D --Certificate of Designations for the Series G Redeemable
Exchangeable Preferred Stock (incorporated by reference
herein to Exhibit 3.1D to the Company's Registration
Statement on Form S-4 dated October 17, 1995, File No.
33-62717)................................................
4.2 --Amended and restated By-laws (incorporated herein by
reference to Exhibit 3.2D to the Company's Registration
Statement on Form S-4 dated October 17, 1995, File No.
33-62717)................................................
4.3 --Form of Certificate for shares of Common Stock
(incorporated herein by reference to the Company's
Registration Statement on Form S-1, dated January 17,
1986, File No. 33-1936)..................................
4.4 --Form of Indenture between the Company and the Trustee...
*4.5 --Form of Deposit Agreement...............................
*4.6 --Form of Depositary Receipt..............................
*4.7 --Form of Warrant Agreement...............................
*4.8 --Form of Warrant Certificate.............................
5.1 --Opinion of Sullivan & Cromwell..........................
12 --Computation of Ratio of Deficiency of Earnings to Fixed
Charges and Fixed Charges and Preferred Stock Dividends..
23.1 --Consent of Sullivan & Cromwell (contained in Exhibit
5.1).....................................................
23.2 --Consents of KPMG Peat Marwick LLP.......................
23.3 --Consent of Deloitte & Touche LLP........................
**24 --Powers of Attorney......................................
25.1 --Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the Trustee under the
Indenture................................................
</TABLE>
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* To be filed as an exhibit to a Current Report on Form 8-K subsequent to the
effectiveness of this Registration Statement, in accordance with Item
601(b)(1) of Regulation S-K.
** Previously filed.
<PAGE>
EXHIBIT 1.1
S&S DRAFT
10/12/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
Subordinated Debt Securities
PURCHASE AGREEMENT
------------------
Dated: _______, 1995
<PAGE>
CABLEVISION SYSTEMS CORPORATION
-------------------------------
(a Delaware corporation)
Subordinated Debt Securities
PURCHASE AGREEMENT
------------------
______, 1995
To the Underwriters named in Schedule I
Dear Sirs:
Cablevision Systems Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule I
certain of its debt securities specified in Schedule II (the "Offered
Securities") on the terms and conditions stated herein and in Schedule II. The
Offered Securities will be issued pursuant to an indenture to be dated as of
___________, 1995 (the "Subordinated Indenture") between the Company and The
Bank of New York, trustee (the "Subordinated Trustee"). As used herein, unless
the context otherwise requires, the term "Underwriters" shall mean the firms
named as Underwriters in Schedule I, and the term "you" shall mean the
Underwriters. The Offered Securities and the Subordinated Indenture are more
fully described in the Prospectus and the Prospectus Supplement referred to
below.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 33-62313),
including a prospectus, relating to certain of its securities, including its
debt securities (including the Offered Securities) and the offering thereof from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended (the "1933 Act"). Such registration statement has been declared
effective by the Commission. As provided in Section 3(a), a prospectus
supplement reflecting the terms of the Offered Securities, the terms of the
offering thereof and the other matters set forth therein has been prepared and
will be filed pursuant to Rule 424 under the 1933 Act. Such prospectus
supplement, in the form first filed after the date hereof pursuant to Rule
424(b), is herein referred to as the "Prospectus Supplement". Such registration
statement, as amended at the date hereof, including the exhibits thereto and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, is herein called the
<PAGE>
2
"Registration Statement", and the basic prospectus included therein relating to
all offerings of securities under the Registration Statement, as supplemented by
the Prospectus Supplement, is herein called the "Prospectus", except that, if
such basic prospectus is amended or supplemented on or prior to the date on
which the Prospectus Supplement is first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the basic prospectus as so amended or supplemented
and as supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), that are incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act.
Section 1. Representations and Warranties. (a) The Company
------------------------------
represents and warrants to and agrees with each of the Underwriters that:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act and on the original effective date of the Registration Statement
and on the effective date of the most recent post-effective amendment
thereto, if any, the Registration Statement complied in all material
respects with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act Regulations"), the
Trust Indenture Act of 1939, as amended (the "1939 Act") and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; on the date hereof and at the
Closing Time (as defined below), (A) the Registration Statement and any
amendments and supplements thereto, comply and will comply in all material
respects with the requirements of the 1933 Act, the 1933 Act Regulations,
the 1939 Act and the 1939 Act Regulations, (B) neither the Registration
Statement nor any amendment or supplement thereto includes or will include
an untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) neither the Prospectus nor any
amendment or supplement thereto includes or will include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
-------- -------
representation and warranty does not apply to statements or omissions made
in reliance upon and in conformity with information furnished in writing by
you to the Company expressly for use in the Registration Statement or the
Prospectus. At the Closing Time, the Designated Indenture (as defined
below) will comply in all material respects with the requirements of the
1939 Act and the 1939 Act Regulations.
(ii) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they were
filed with the
<PAGE>
3
Commission, complied in all material respects with the requirements of the
1934 Act, and the rules and regulations of the Commission thereunder (the
"1934 Act Regulations"), and, when read together and with the other
information in the Prospectus, do not and will not, on the date hereof and
at all times subsequent thereto up to the Closing Time, include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(iii) KPMG Peat Marwick LLP, who are reporting upon the audited
financial statements and schedules included or incorporated by reference in
the Registration Statement, are independent accountants as required by the
1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed and delivered
by the Company.
(v) The consolidated historical financial statements included or
incorporated by reference in the Registration Statement present fairly the
consolidated financial position of the Company and its subsidiaries as of
the dates indicated and the consolidated results of operations and changes
in financial position of the Company and its subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if
any, included in the Registration Statement present fairly the information
required to be stated therein. The selected financial data included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement. The pro forma financial statements and other pro
forma financial information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(vi) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with power and
authority (corporate and other) under such laws to own, lease and operate
its properties and conduct its business as described in the Prospectus; and
the Company is duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such
<PAGE>
4
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise.
(vii) The subsidiaries of the Company set forth on Schedule V are, as
of the date hereof, all of the "Restricted Subsidiaries", as such term is
defined under each of (a) the indenture, dated as of April 1, 1992, for
the Company's 10-3/4% Senior Subordinated Debentures due 2004, (b) the
indenture, dated as of February 15, 1993, for the Company's 9-7/8% Senior
Subordinated Debentures due 2013 and (c) the indenture, dated as of April
1, 1993, for the Company's 9 7/8% Senior Subordinated Debentures due 2023;
and the Bank Credit Agreement (as such term is defined in the Designated
Indenture). The subsidiaries of the Company set forth on Schedule VI are
Unrestricted Subsidiaries (the Restricted Subsidiaries and the Unrestricted
Subsidiaries are hereinafter referred to collectively as the
"Subsidiaries"). The Subsidiaries on Schedules V and VI with an asterisk
by their names are the only subsidiaries of the Company which had at
December 31, 1994 assets in excess of 10% of the consolidated assets of the
Company and its subsidiaries as at that date or had, in the aggregate, for
the fiscal year then ended revenues or operating cash flow in excess of 10%
of consolidated revenues or consolidated operating cash flow of the Company
and its subsidiaries for such period (such Subsidiaries are referred to
herein as the "Material Subsidiaries"). In making this determination, any
subsidiary acquired after December 31, 1994 shall be deemed to have been
acquired as of such date.
(viii) Each Material Subsidiary that is a corporation is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with power and authority (corporate and
other) under such laws to own, lease and operate its properties and conduct
its business; and each such Material Subsidiary is duly qualified to
transact business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise. All of the outstanding shares
of capital stock of each Material Subsidiary have been duly authorized and
validly issued and are fully paid and non-assessable and, except as
disclosed on Schedule V or VI to this Agreement or as disclosed or
contemplated by the Prospectus, are owned by the Company, directly or
through one or more subsidiaries, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
(ix) Each of the Material Subsidiaries in which the Company or a
subsidiary of the Company is a limited or general partner (hereinafter
called the "Partnerships") has been duly formed and is validly existing as
a limited or general partnership, as the case
<PAGE>
5
may be, under the laws of its jurisdiction of organization, with full power
and authority to own, lease and operate properties and conduct its
business; all necessary filings with respect to the formation of the
Partnerships as limited or general partnerships (as the case may be) have
been made under such laws; and each of the Partnerships is duly qualified
to transact business and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, considered as
one enterprise.
(x) All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive rights of any stockholder of the
Company.
(xi) The Subordinated Indenture as supplemented to the date hereof
(the Subordinated Indenture, as so supplemented the "Designated Indenture")
has been duly authorized by the Company. The Subordinated Indenture as
executed is or will be substantially in the form filed as an exhibit to the
Registration Statement. The Designated Indenture, when duly executed and
delivered (to the extent required by the Subordinated Indenture) by the
Company and the Subordinated Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law); and the form of Designated Indenture conforms in all material
respects to the description thereof contained in the Prospectus.
(xii) The Offered Securities have been duly authorized by the
Company. When executed, authenticated, issued and delivered in the manner
provided for in the Designated Indenture and sold and paid for as provided
herein and in any Delayed Delivery Contracts (as defined below), the
Offered Securities will constitute valid and binding obligations of the
Company entitled to the benefits of the Designated Indenture and
enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law); and
the form of Offered Securities conforms in all material respects to the
description thereof contained in the Prospectus.
<PAGE>
6
(xiii) In the event that any of the Offered Securities are purchased
pursuant to Delayed Delivery Contracts, each of such Delayed Delivery
Contracts has been duly authorized by the Company and, when executed and
delivered on behalf of the Company and duly authorized, executed and
delivered on behalf of the purchaser thereunder, will constitute a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xiv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has not been (A) any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree and there has not been any
change in the capital stock or long term debt of the Company or any of its
Subsidiaries or any change which the Company has reasonable cause to
believe will involve any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, considered as one enterprise, or (B) any
transaction entered into by the Company or any subsidiary, other than in
the ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise, or (C) except for [specify
exceptions], any dividend or distribution of any kind declared, paid or
made by the Company on its capital stock.
(xv) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect on
the financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, considered as one enterprise. The
execution and delivery by the Company of this Agreement, the Designated
Indenture and any Delayed Delivery Contracts (the "Operative Documents"),
the issuance and delivery of the Offered Securities, the consummation by
the Company of the transactions contemplated by this Agreement and
compliance by the Company with the terms of the Operative Documents, have
been duly authorized by all necessary corporate action on the part of the
Company and do not and will not result in any violation of the charter or
by-laws of the Company or any Subsidiary, and do not and will not conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any
<PAGE>
7
Subsidiary under (A) any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, considered as one
enterprise), or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of its properties (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, considered as one
enterprise) or (C) any material agreement or other material instrument
(including any franchise agreement, license, permit or other governmental
authorization granted by the Federal Communications Commission (hereinafter
called the "FCC"), The New York State Commission on Cable Television, the
Massachusetts Cable Television Commission or any other governing body
having jurisdiction over cable television operations) binding upon the
Company or any of its Subsidiaries (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, considered as one
enterprise).
(xvi) The statements in the Prospectus under "Risk Factors",
"Description of Debt Securities" [and "Recent Developments- Impact of
Pending Telecommunications Legislation of FCC Cable Rate Regulation"] and
the statements in the Company's annual report on Form 10-K for the year
ended December 31, 1994 (the "1994 Form 10-K"), which is incorporated by
reference in the Prospectus, under "Business - Cable Television Operations
- Competition" and "Business - Cable Television Operations -Regulation" and
in the Registration Statement in Item 15, and the statements cross
referenced therein, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, with respect
to such legal matters, documents and proceedings, do not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading.
(xvii) Except as disclosed in the Prospectus, no authorization,
approval, consent or license of any government, governmental
instrumentality or court, domestic or foreign (other than under the 1933
Act, the 1939 Act and the securities or blue sky laws of the various
states), is required for the valid authorization, issuance, sale and
delivery of the Offered Securities in the United States, or for the
execution, delivery or performance of the Indenture by the Company except
for any such consent, approval, authorization, order
<PAGE>
8
or registration the failure of which to obtain or make or the absence of
which would result in no material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(xviii) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the best
of the Company's knowledge, threatened against or affecting the Company or
any Subsidiary that is required to be disclosed in the Prospectus or that
the Company has reasonable cause to believe will result in any material
adverse change in the consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, considered as
one enterprise or will materially and adversely affect the properties or
assets of the Company and its subsidiaries, considered as one enterprise,
or that the Company has reasonable cause to believe will materially
adversely affect the consummation of the transactions contemplated in this
Agreement.
(xix) There are no contracts or documents of a character required to
be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not described and filed
as required.
(xx) The Company and the Subsidiaries each has good and marketable
title to all material properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as (A) are described in the Prospectus, or (B)
are neither material in amount nor materially significant in relation to
the business of the Company and its subsidiaries, considered as one
enterprise; and any material real property and buildings under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as do not interfere, to an extent
material to the Company and its subsidiaries, considered as one enterprise,
with the use made and proposed to be made of such property and buildings by
the Company and the Subsidiaries.
(xxi) Except as disclosed in the Prospectus, the Company and the
Subsidiaries each owns, possesses or has obtained all material agreements,
governmental licenses, permits, certificates, consents, orders, approvals
and other material authorizations (including, without limitation, all
material governmental authorizations and agreements with public utilities
and microwave transmission companies and pole access and rental agreements)
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, and neither
the Company nor any Subsidiary has received any notice of proceedings
relating to revocation or modification of any such licenses, permits,
certificates, consents, orders, approvals or authorizations.
<PAGE>
9
(xxii) To the best knowledge of the Company, and except as disclosed
in the Prospectus, no labor problem exists with its employees or with
employees of the Subsidiaries that could reasonably be expected to
materially and adversely affect the financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(b) Any certificate signed by any officer of the Company or any
Subsidiary and delivered to you or to counsel for the Underwriters in connection
with the offering of the Offered Securities shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriters; Closing. (a) On
----------------------------------------------
the basis of the representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at the purchase price to the Underwriters set forth in
Schedule II, the principal amount of Offered Securities set forth opposite the
name of such Underwriter in Schedule I.
(b) Payment of the purchase price for, and delivery of, the Offered
Securities shall be made at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, or at such other place in the City of New
York, at 10:00 A.M. as shall be agreed upon by the Company and you, or as shall
otherwise be provided in Section 10 (such date and time of payment and delivery
being herein called the "Closing Time"). Payment shall be made to the Company
in the manner specified in Schedule II hereto, against delivery of the Offered
Securities to you for the respective accounts of the several Underwriters.
Except as otherwise provided in Schedule II hereto, such Offered Securities
shall be in such denominations ($1,000 or an integral multiple thereof) and
registered in such names as you may request in writing at least two full
business days before the Closing Time. Such Offered Securities will be made
available in New York City for examination and packaging by you not later than
10:00 A.M. on the business day prior to the Closing Time.
(c) If specified in Schedule II, the Underwriters may solicit offers
to purchase Offered Securities from the Company pursuant to delayed delivery
contracts ("Delayed Delivery Contracts") substantially in the form of Schedule
IV with such changes therein as the Company may approve. Any Delayed Delivery
Contracts are to be with institutional investors of the types set forth in the
Prospectus. At the Closing Time, the Company will enter into Delayed Delivery
Contracts (for the minimum principal amount of Offered Securities per Delayed
Delivery Contract specified in Schedule II) with all purchasers proposed by the
Underwriters and previously approved by the Company as provided below, but not
for an aggregate principal amount of Offered Securities less than or greater
than the minimum and maximum aggregate
<PAGE>
10
principal amounts specified in Schedule II. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
(d) You are to submit to the Company, at least three business days
prior to the Closing Time, the names of any institutional investors with which
it is proposed that the Company enter into Delayed Delivery Contracts, the
principal amount of Offered Securities to be purchased by each of them and the
date of delivery thereof, and the Company will advise you, at least two business
days prior to the Closing Time, of the names of the institutions with which the
making of Delayed Delivery Contracts is approved by the Company and the
principal amount of Offered Securities to be covered by each such Delayed
Delivery Contract.
(e) As compensation for arranging Delayed Delivery Contracts, the
Company will pay (by certified or official bank check in New York Clearing House
or similar next day funds) to you at the time of the closing in respect of such
Delayed Delivery Contracts, for the accounts of the Underwriters, a fee equal to
that percentage of the principal amount of Offered Securities for which Delayed
Delivery Contracts are made at the Closing Time as is specified in Schedule II
or the amount of such fee may be deducted from the check delivered pursuant to
Section 2(b).
(f) The principal amount of Offered Securities agreed to be purchased
by each Underwriter shall be reduced by the principal amount of Offered
Securities covered by Delayed Delivery Contracts, as to such Underwriter as set
forth in a notice delivered by you to the Company; provided, however, that the
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total principal amount of Offered Securities to be purchased by all Underwriters
shall be the principal amount of Offered Securities covered by this Agreement,
less the principal amount of Offered Securities covered by all Delayed Delivery
Contracts.
Section 3. Certain Covenants of the Company. The Company covenants
--------------------------------
with each Underwriter as follows:
(a) If reasonably requested by you in connection with the offering of
the Offered Securities, the Company will have prepared a preliminary
prospectus supplement containing such information as you and the Company
deem appropriate, and, immediately following the execution of this
Agreement, the Company will prepare a Prospectus Supplement that complies
with the 1933 Act and the 1933 Act Regulations and that sets forth the
principal amount of the Offered Securities and their terms not otherwise
specified in the Subordinated Indenture, the name of each Underwriter
participating in the offering and the principal amount of the Offered
Securities that each severally has agreed to purchase, the name of each
Underwriter, if any, acting as representative of the Underwriters in
connection with the offering, the price at which the Offered Securities are
<PAGE>
11
to be purchased by the Underwriters from the Company, any initial public
offering price, any selling concession and reallowance and any delayed
delivery arrangements, and such other information as you and the Company
deem appropriate in connection with the offering of the Offered Securities.
The Company will promptly transmit copies of the Prospectus Supplement to
the Commission for filing pursuant to Rule 424 under the 1933 Act and will
furnish to the Underwriters as many copies of any preliminary prospectus
supplement and the Prospectus as you shall reasonably request.
(b) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Offered Securities, the
Company will, subject to Section 3(c), file promptly all documents required
to be filed with the Commission pursuant to Section 13 or 14 of the 1934
Act subsequent to the time the Registration Statement becomes effective.
(c) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Offered Securities, the
Company will inform you of its intention to file any amendment to the
Registration Statement, any supplement to the Prospectus or any document
that would as a result thereof be incorporated by reference in the
Prospectus; will furnish you with copies of any such amendment, supplement
or other document a reasonable time in advance of filing; and will not file
any such amendment, supplement or other document in a form to which you or
your counsel shall reasonably object.
(d) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Offered Securities, the
Company will notify you immediately, and confirm the notice in writing
(with respect to clause (i), upon request), (i) of the effectiveness of any
amendment to the Registration Statement, (ii) of the receipt of any
comments from the Commission with respect to the Registration Statement,
the Prospectus or the Prospectus Supplement, (iii) of any request by the
Commission to amend the Registration Statement or any supplement to the
Prospectus or for additional information relating thereto and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, of the suspension of the qualification of
the Offered Securities for offering or sale in any jurisdiction, or of the
institution or to the Company's knowledge, the threatening of any
proceedings for any of such purposes. The Company will use every reasonable
effort to prevent the issuance of any such stop order or of any order
preventing or suspending such use and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(e) The Company has furnished or will furnish to you one signed copy
for the managing Underwriters of each of the Registration Statement (as
originally filed) and of all amendments thereto, whether filed before or
after the Registration Statement became
<PAGE>
12
effective, and as many copies of all exhibits and documents filed
therewith, including documents incorporated by reference into the
Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act (through the
end of the period when the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities) and signed
copies of all consents and certificates of experts, as you may reasonably
request, and has furnished or will furnish to each of you, as many
conformed copies of the Registration Statement as originally filed and of
each amendment thereto (including documents incorporated by reference into
the Prospectus but without exhibits) as you may reasonably request.
(f) The Company will use its reasonable best efforts, in cooperation
with the Underwriters, to qualify the Offered Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications in
effect for a period of not less than one year from the date hereof;
provided, however, that the Company shall not be obligated to file any
-------- -------
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Offered Securities have been
qualified as above provided. The Company will also supply you with such
information as is necessary for the determination of the legality of the
Offered Securities for investment under the laws of such jurisdictions as
you may reasonably request.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the
period covered thereby (90 calendar days in the case the period corresponds
to the fiscal year of the Company), an earnings statement of the Company
(in form complying with the provisions of Rule 158 of the 1933 Act
Regulations), covering a period of 12 months beginning after the effective
date of the Registration Statement and covering a period of 12 months
beginning after the effective date of any post-effective amendment to the
Registration Statement but not later than the first day of the Company's
fiscal quarter next following such effective date.
(h) The Company will comply to the best of its ability with the 1933
Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations
and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Offered Securities as contemplated in
this Agreement and in the Prospectus. If at any time when the Prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Offered Securities any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
counsel for the Company, to
<PAGE>
13
amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of either such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(c), such amendment or supplement as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements.
(i) The Company will use the net proceeds received by it from the sale
of the Offered Securities in the manner specified in the Prospectus under
the caption "Use of Proceeds".
(j) For a period of three years after the Closing Time, the Company
will furnish to you copies of all annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the
Company to its stockholders generally.
(k) Between the date hereof and the Closing Time or such other date as
may be specified in Schedule II, the Company will not, without your prior
consent, offer or sell, or enter into any agreement to sell, any debt
securities issued or guaranteed by the Company with a maturity of more than
one year in any public offering (other than the Offered Securities). This
limitation is not applicable to the public offering of tax exempt
securities guaranteed by the Company or to such other public offering of
long-term debt as may be specified in Schedule II.
Section 4. Payment of Expenses. The Company will pay and bear all
-------------------
costs and expenses incident to the performance of its obligations under this
Agreement, including (a) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, any preliminary prospectus supplements and the
Prospectus and any amendments or supplements thereto, and the cost of furnishing
copies thereof to the Underwriters, (b) the preparation, printing and
distribution of this Agreement, the Designated Indenture, the Offered
Securities, any Delayed Delivery Contracts, the Blue Sky Survey, (c) the
delivery of the Offered Securities to the Underwriters, (d) the fees and
disbursements of the Company's counsel and accountants, (e) the qualification of
the Offered Securities under the applicable securities laws in accordance with
Section 3(g) and any filing for review of the offering with the National
Association of Securities Dealers, Inc., including filing fees and fees and
disbursements of counsel for the Underwriters in connection therewith and in
<PAGE>
14
connection with the Blue Sky Survey, (f) any fees charged by rating agencies for
rating the Offered Securities and (g) the fees and expenses of the Subordinated
Trustee, including the fees and disbursements of counsel for the Subordinated
Trustee, in connection with the Designated Indenture and the Offered Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse the Underwriters
for all their out-of-pocket expenses, including the fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. Except as
---------------------------------------
otherwise provided in Schedule II, the obligations of the several Underwriters
to purchase and pay for the Offered Securities that they have respectively
agreed to purchase hereunder are subject to the accuracy of the representations
and warranties of the Company contained herein or in certificates of any officer
of the Company or any Subsidiary delivered pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following further conditions:
(a) At the Closing Time, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel for the Underwriters.
(b) At the Closing Time, you shall have received a signed opinion of
Sullivan & Cromwell, counsel for the Company, dated as of the Closing Time,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(ii) The Designated Indenture has been duly authorized, executed
and delivered by the Company and duly qualified under the 1939 Act;
the Offered Securities have been duly authorized, executed,
authenticated, issued and delivered; and the Designated Indenture and
the Offered Securities constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms
or, in the case of Offered Securities, if any, to be delivered
pursuant to Delayed Delivery Contracts, when duly executed and
authenticated as provided in the Designated Indenture and issued,
delivered and paid for in accordance with such Delayed Delivery
Contracts, will constitute, valid and
<PAGE>
15
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(iii) The execution and delivery of this Agreement and the
Designated Indenture by the Company, the issuance and delivery by the
Company of the Offered Securities to the Underwriters and compliance
by the Company with the terms of this Agreement and the Designated
Indenture do not and will not result in any violation of the
Certificate of Incorporation or By-laws of the Company; and all
regulatory consents, authorizations, approvals and filings required to
be obtained or made by the Company under the Federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware for the issuance, sale and
delivery of the Offered Securities by the Company to the Underwriters
have been obtained or made.
(iv) In the event that any of the Offered Securities are to be
purchased pursuant to Delayed Delivery Contracts, each Delayed
Delivery Contract that has been executed by the Company has been duly
authorized, executed and delivered by the Company and, assuming the
due authorization, execution and delivery by the purchaser thereunder,
is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
Such counsel shall also furnish you with a letter to the effect that
as counsel to the Company, they reviewed the Registration Statement and the
Prospectus, participated in discussions with representatives of the
Underwriters and of the Company and its accountants and advised the Company
as to the requirements of the 1933 Act and the applicable rules and
regulations thereunder; between the date of the Prospectus Supplement and
the Closing Time, such counsel participated in further discussions with
representatives of the Underwriters and of the Company and its accountants
in which the contents of certain portions of the Prospectus and related
matters were discussed and reviewed certain documents filed by the Company
with the Commission, certificates of certain officers of the Company, an
opinion addressed to the Underwriters from Robert S. Lemle, Esq. and a
letter from the Company's independent accountants; on the basis of the
information that such counsel gained in the course of the performance of
the services
<PAGE>
16
referred to above, considered in the light of such counsel's understanding
of the applicable law (including the requirements of Form S-3 and the
character of the prospectus contemplated thereby) and the experience such
counsel have gained through their practice under the 1933 Act, they confirm
to you that, in such counsel's opinion, the Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates appeared on their face to be
appropriately responsive in all material respects to the requirements of
the 1933 Act, the 1939 Act, and the applicable rules and regulations of the
Commission thereunder; further, nothing that came to such counsel's
attention in the course of such review has caused such counsel to believe
that any part of the Registration Statement, when such part became
effective, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of the date
of the Prospectus Supplement contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; also, nothing that came to the attention of such
counsel in the course of the procedures described in the second clause of
this paragraph has caused such counsel to believe that the Prospectus, as
supplemented by the Prospectus Supplement, as of the Closing Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; such
counsel shall state that the limitations inherent in the independent
verification of factual matters and the character of determinations
involved in the registration process are such that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus except
for those made under the captions "Description of Debt Securities" and
"Plan of Distribution" in the Prospectus insofar as they relate to
provisions of documents therein described; also, such counsel need express
no opinion or belief as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus, or as to the
description of statutes, regulations, proceedings or matters referred to in
Section 5(d) hereof or as to the statement of eligibility of the
Subordinated Trustee under the Designated Indenture under which the Offered
Securities are being issued.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the Federal laws of
the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware and no opinion as to federal or
communications laws. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and the Subsidiaries
and certificates of public officials.
<PAGE>
17
(c) At the Closing Time you shall have received a signed opinion of
Robert S. Lemle, Esq., Executive Vice President, Secretary and General
Counsel for the Company, in form and substance satisfactory to counsel to
the Underwriters, to the effect that:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with
corporate power and authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Prospectus.
(ii) The Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except where
the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(iii) Each Material Subsidiary that is a corporation is duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business. Each Material Subsidiary that is a partnership
is duly organized under the laws of the jurisdiction of its
organization.
(iv) All of the outstanding shares of capital stock of each
Material Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable; except as set forth on Schedules V
and VI to this Agreement or as disclosed in or as contemplated by the
Prospectus, all of such shares are owned by the Company, directly or
through one or more subsidiaries, free and clear of any material
pledge, lien, security interest, charge, claim, equity or encumbrance
of any kind; no holder thereof is subject to personal liability under
the certificate of incorporation or by-laws of the respective Material
Subsidiary or the corporation law of the jurisdiction in which such
Material Subsidiary is organized by reason of being such a holder and
none of such shares was issued in violation of the preemptive rights
of any stockholder of such Material Subsidiary under the certificate
of incorporation or by-laws of such Material Subsidiary or the
corporation law of the jurisdiction in which such Material Subsidiary
is organized.
(v) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or may be a party, or of which any of their
properties are or may be the subject, of a character which are
required to be disclosed in the Registration
<PAGE>
18
Statement, the Prospectus, the annual Form 10-K or any Form 10-Q of
the Company, other than those disclosed therein.
(vi) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior
to the Closing Time (other than the financial statements and related
schedules therein and any untrue statement or omission of a material
fact contained therein which was corrected in the Prospectus, as to
which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder; and he has no reason to believe that such documents
considered together contained as of the date of the Prospectus
Supplement or as of the Closing Time contained an untrue statement of
a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made not misleading.
(vii) Such counsel does not know of any contracts or documents
of a character required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described, referred to or
filed as required.
(viii) To the knowledge of such counsel, no default exists in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, loan
agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the
Prospectus or filed as an exhibit to the Registration Statement or any
subsequent Form 10-Q of the Company, which default would have a
material adverse effect on the financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(ix) The execution and delivery of the Operative Documents by the
Company, the issuance and delivery of the Offered Securities, the
consummation by the Company of the transactions contemplated in this
Agreement and compliance by the Company with the terms of this
Agreement and the Designated Indenture will not conflict with the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument (including any franchise agreement, license, permit or
other governmental authorization granted by the FCC, The State of New
York Commission on Cable Television, or any other Federal or New York
State governing body having jurisdiction over cable television
operations) known to
<PAGE>
19
such counsel to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of the
property or assets of the Company or any Subsidiary is subject, which
conflict, breach, violation or default would have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any Federal,
New York or Delaware General Corporation Law statute or any order,
rule or regulation known to such counsel of any Federal, New York or
Delaware court or governmental agency or body having jurisdiction over
the Company or any Subsidiary or any of their properties, which
violation in each case would have a material adverse effect on the
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Offered Securities or the consummation by the
Company of the transactions contemplated by this Agreement, except
with respect to such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than the Federal laws of the
United States (other than federal communications laws, as to which such counsel
need express no opinion), the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of any other jurisdiction, upon
opinions of other counsel, who shall be counsel satisfactory to counsel for the
Underwriters, in which case the opinion shall state that he believes you and he
are entitled to so rely. Such counsel may also state that, insofar as such
opinion involves factual matters, he has relied, to the extent he deems proper,
upon certificates of officers of the Company and the Subsidiaries and
certificates of public officials.
(d) At the Closing Time you shall have received a signed opinion of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as special federal
communications counsel to the Company, in form and substance satisfactory
to counsel to the Underwriters, to the effect that:
(i) The approvals, if any, required to be obtained from the FCC
to consummate the transactions contemplated by this Agreement have
been obtained and are in full force and effect.
<PAGE>
20
(ii) Such counsel does not know of any federal communications and
copyright statutes that are principally directed to the regulation of
cable properties applicable to the Company that are not described in
the Prospectus but would be material and relevant to the business of
the Company, and the descriptions in the Prospectus of such statutes
therein described are accurate and fairly summarize such statutes.
(iii) The information in the Registration Statement and
Prospectus under the captions "Risk Factors -- Risk Related to Cable
Regulation", "Risk Factors -- Risk of Competition" and "Risk Factors -
- Competition from Telephone Companies" and in the [_____ Form 10-K]
under the captions "Business -- Cable Television Operations --
Regulation", to the extent that such sections describe statutes,
regulations and governmental proceedings or matters involving federal
communications and copyright law and policy and the impact thereof on
the business in which the Company and its subsidiaries are engaged,
has been reviewed by them and fairly represents the communications and
copyright law described therein applicable to the Company and its
subsidiaries as disclosed in the Prospectus and material and relevant
to the business of the Company and its subsidiaries.
In giving such opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the District of
Columbia, the federal law of the United States and the corporate law of the
State of Delaware, upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the Underwriters, in which case the opinion
shall state that they believe you and they are entitled to so rely. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Subsidiaries and
certificates of public officials. Such counsel may strictly confine such
opinion to matters involving the Federal Communications Act of 1934, as
amended (the "Communications Act"), the rules and regulations of the
Federal Communications Commission ("FCC"), and those provisions of the
federal copyright law that are principally directed to the regulation of
the cable properties. Such counsel may also limit such opinion to the
state of the law as it exists under the Communications Act, the rules and
regulations of the FCC, and federal copyright law as of the date thereof.
(e) At the Closing Time, you shall have received the favorable opinion
of Shearman & Sterling, counsel for the Underwriters, dated as of the
Closing Time, to the effect that the opinions delivered pursuant to
Sections 5(b), 5(c) and 5(d) appear on their face to be appropriately
responsive to the requirements of this Agreement except, specifying the
same, to the extent waived by you, and with respect to the incorporation
and legal existence of the Company, the Offered Securities, this Agreement,
the
<PAGE>
21
Designated Indenture, the Registration Statement, the Prospectus, the
documents incorporated by reference and such other related matters as you
may require. In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States, the laws of the State of New York and
the General Corporation Law of the State of Delaware, and no opinion as to
federal or state communications laws. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
the Subsidiaries and certificates of public officials.
(f) At the Closing Time, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented, in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations, and neither the
Registration Statement nor the Prospectus, as they may then be amended or
supplemented, shall contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) there shall not have been,
since the respective dates as of which information is given in the
Registration Statement, any material adverse change or any development
involving a prospective material adverse change in or affecting the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, considered as one enterprise, (iii) the
Company shall have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Time and (iv) the other representations and warranties of the
Company set forth in Section 1(a) shall be accurate as though expressly
made at and as of the Closing Time. At the Closing Time, you shall have
received a certificate of the President, a Vice Chairman or a Vice
President, and the Treasurer or Controller, of the Company, dated as of the
Closing Time, to such effect.
(g) You shall have received the letter or letters specified in
Sections 1 and 2 of Schedule III at the date hereof and the letter
specified in Section 3 of Schedule III at the Closing Time.
(h) Unless otherwise specified in Schedule II hereto, on or after the
date hereof (i) no downgrading shall have occurred in the rating accorded
the Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities.
(i) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
reasonably
<PAGE>
22
request for the purpose of enabling them to pass upon the issuance and sale
of the Offered Securities as herein contemplated and the matters referred
to in Section 5(e) and in order to evidence the accuracy and completeness
of any of the representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment of
any of the conditions herein contained.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4 . Notwithstanding
any such termination, the provisions of Sections 6, 7 and 8 shall remain in
effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and
---------------
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading or arising out of an untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus
supplement or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (i) or (ii)
above;
<PAGE>
23
provided, however, that this indemnity agreement does not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus supplement or the Prospectus
(or any amendment or supplement thereto). The foregoing indemnity with respect
to any untrue statement contained in or any omission from a preliminary
prospectus supplement, shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any loss, claim, damage,
liability or litigation arising from the sale of Offered Securities to any
person by such Underwriter if such Underwriter failed to send or give a copy of
the Prospectus, as the same may be supplemented or amended, to such person
within the time required by the 1933 Act, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact in such
preliminary prospectus supplement was corrected in the Prospectus, unless such
failure resulted from noncompliance by the Company with Section 3(a).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity agreement in Section 6(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus supplement or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity provided for in Section
6 is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims,
<PAGE>
24
damages and expenses of the nature contemplated by such indemnity incurred by
the Company and one or more of the Underwriters, as incurred, in such
proportions that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discount hereunder with respect to the
offering of the Offered Securities bears to the purchase price of the Offered
Securities, and the Company is responsible for the balance; provided, however,
-------- -------
that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls an Underwriter within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
Section 8. Agreements to Survive Delivery. The indemnities,
------------------------------
agreements and other statements of the Company or its officers set forth in or
made pursuant to this Agreement will remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Company, any
Underwriter or any person who controls the Company or any Underwriter within the
meaning of Section 15 of the 1933 Act and will survive delivery of and payment
for the Offered Securities.
Section 9. Termination of Agreement. (a) You may terminate this
------------------------
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change in or affecting the
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, considered as one enterprise, or (ii) if there has
occurred any outbreak or escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in your judgment, impracticable to market the Offered Securities or
enforce contracts for the sale of the Offered Securities or (iii) if trading in
any securities of the Company has been suspended by the Commission or the
National Association of Securities Dealers, Inc., or if trading generally on
either the American Stock Exchange or the New York Stock Exchange or in the
over-the-counter market has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by such exchange or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority or
(iv) if a banking moratorium has been declared by either federal or New York
authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section
<PAGE>
25
4. Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
shall remain in effect.
Section 10. Default. If one or more of the Underwriters shall fail
-------
at the Closing Time to purchase the Offered Securities that it or they are
obligated to purchase (the "Defaulted Offered Securities"), you shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Offered Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, you have not
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Offered Securities
does not exceed 10% of the aggregate principal amount of the Offered
Securities to be purchased pursuant to this Agreement, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in the
proportions that the principal amounts of Offered Securities set forth
opposite the names of such non-defaulting Underwriters in Schedule I bear
to the total aggregate principal amount of Securities set forth opposite
the names of such non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Offered Securities
exceeds 10% of the aggregate principal amount of the Offered Securities to
be purchased, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination
of this Agreement, either you or the Company shall have the right to postpone
the Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
Section 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if delivered,
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed as set forth in Schedule I. Notices to the
Company shall be directed to it at Cablevision Systems Corporation, One Media
Crossways, Woodbury, New York 11797, attention of Robert S. Lemle, Esq., Senior
Vice President, General Counsel and Secretary, with a copy to Sullivan &
Cromwell, at 125 Broad Street, New York, NY 10004, attention of John P. Mead,
Esq.
<PAGE>
26
Section 12. Parties. The agreement herein set forth is made solely
-------
for the benefit of the several Underwriters, the Company and, to the extent
expressed, any person who controls the Company or any of the Underwriters within
the meaning of Section 15 of the 1933 Act, and the directors of the Company, its
officers who have signed the Registration Statement, and their respective
executors, administrators, successors and assigns and, subject to the provisions
of Section 10, no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser, as such purchaser, from any Underwriter of the Offered
Securities. If there are two or more Underwriters, all of their obligations
hereunder are several and not joint.
Section 13. Governing Law and Time. This Agreement shall be governed
----------------------
by the laws of the State of New York. Specified times of day refer to New York
City time.
Section 14. Counterparts. This Agreement may be executed in one or
------------
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
<PAGE>
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and each
Underwriter in accordance with its terms.
Very truly yours,
CABLEVISION SYSTEMS CORPORATION
By ____________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
[Insert signature block(s) for
the Representative or Representatives
acting on behalf of the
Underwriters or for each
Underwriter if no syndicate]
<PAGE>
SCHEDULE I
to Purchase Agreement
Dated _________, 1995
CABLEVISION SYSTEMS CORPORATION
Subordinated Debt Securities
Underwriter Principal Amount
----------- of Securities
to be Purchased
----------------
<PAGE>
SCHEDULE II
to Purchase Agreement
Dated ________, 1995
CABLEVISION SYSTEMS CORPORATION
Subordinated Debt Securities
Principal amount to be issued: $__________
Interest rate: _____, payable:
Interest accrues from:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
Initial public offering price: _____% of the principal amount plus accrued
interest from ____________________.
Purchase price: _____% of the principal amount plus accrued interest from
____________________.
Method of Payment:
Closing date, time and location:
Delayed delivery contracts: [Authorized] [Not authorized]
[Delivery date:
Minimum principal amount per contract:
Minimum aggregate principal amount:
<PAGE>
II-2
Maximum aggregate principal amount:
Fee: _____%]
Other terms and conditions:
<PAGE>
SCHEDULE III
to Purchase Agreement
Dated __________, 1995
MATTERS TO BE COVERED BY LETTER OR LETTERS OF INDEPENDENT
PUBLIC ACCOUNTANTS
KPMG Peat Marwick, LLP shall have furnished to you the following
letter or letters (in each case in form and substance satisfactory to you):
(1) At the date hereof, a letter to the effect that:
(a) they are independent accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act and the
applicable published 1933 Act Regulations;
(b) in their opinion, except as disclosed in the Registration
Statement, the audited consolidated financial statements and the
related financial statement schedules of the Company and its
subsidiaries included or incorporated by reference in such annual
report on Form 10-K comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act as it applies
to registration statements on Form S-3 and the related published 1933
Act Regulations and of the 1934 Act as it applies to Form 10-K and the
related published 1934 Act Regulations; and
(c) in addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such other
procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other financial information in the
Form 10-K and have compared certain of such amounts, percentages,
numerical data and financial information with, and have found such
items to be in agreement with or derived from, the detailed accounting
records of the Company and its subsidiaries.
(2) At the date hereof, a letter with respect to each of the Company's
quarterly reports on Form 10-Q (a "10-Q Letter") filed prior to the date
hereof and subsequent to the Company's most recently filed annual report on
Form 10-K, to the effect that:
(a) they reaffirm as of the date of such letter (and as though
made on the date of such letter) all statements made in the 10-K
Letter, except that the
<PAGE>
III-2
procedures specified therein shall have been carried out to a
specified date not more than five days prior to the date of such 10-Q
Letter;
(b) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of:
(i) a reading of minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the
__________ and ___________ Committees of the Company's Board of
Directors and any subsidiary committees from the date of the
latest audited consolidated financial statements to the specified
date referred to in Section 2(a);
(ii) a reading of the unaudited condensed consolidated
financial statements of the Company and its subsidiaries included
in the quarterly report on Form 10-Q dated the date of such 10-Q
Letter;
(iii) inquiries of certain officials of the Company and its
subsidiaries; and
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements included in such
quarterly report on Form 10-Q do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act
as it applies to Form 10-Q and the related published 1934 Act
Regulations or that any material modifications should be made to the
unaudited condensed consolidated financial statements included in such
quarterly report for them to be in conformity with generally accepted
accounting principles, except as disclosed in the notes to such
unaudited condensed consolidated financial statements or as otherwise
described in such 10-Q Letter;
(c) in addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such other
procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other financial information in the
Form 10-Q and have compared certain of such amounts, percentages,
numerical data and financial information with, and have found such
items to be in agreement with or derived from, the detailed accounting
records of the Company and its subsidiaries.
(3) At the Closing Time, a letter dated the Closing Time (the "Closing
Letter"), to the effect that:
<PAGE>
III-3
(a) they reaffirm as of the date of the Closing Letter (and as
though made on the date of the Closing Letter) all statements made in
the 10-K Letter and in each 10-Q Letter, if any, except that the
procedures specified therein shall have been carried out to a
specified date not more than five days prior to the date of the
Closing Letter;
(b) based on the procedures set forth in Section 2(b) (but
carried out to the specified date referred to in Section 3(a)),
nothing came to their attention that caused them to believe that, from
the date of the latest balance sheet of the Company and its
subsidiaries included or incorporated by reference in the Prospectus
to such specified date, there were any increases or decreases in
financial statement amounts specified by you as they have agreed to
perform; and
(c) in addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such other
procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other financial information in the
Registration Statement, the Prospectus and the exhibits to the
Registration Statement or in the documents incorporated by reference
in the Prospectus, and have compared certain of such amounts,
percentages, numerical data and financial information with, and have
found such items to be in agreement with or derived from, the detailed
accounting records of the Company and its subsidiaries.
<PAGE>
SCHEDULE IV
to Purchase Agreement
Dated _________, 199_
CABLEVISION SYSTEMS CORPORATION
Subordinated Debt Securities
DELAYED DELIVERY CONTRACT
-------------------------
Cablevision Systems Corporation
One Media Crossways
Woodbury, New York 11797
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Cablevision Systems
Corporation, a Delaware corporation (the "Company"), and the Company agrees to
sell to the undersigned on _____, 199_ (the "Delivery Date"), ________________
______________________________________________________________________________
principal amount of the Company's Subordinated Debt Securities (the "Offered
Securities"), offered by the Company's Prospectus dated October __, 1995, as
supplemented by its Prospectus Supplement dated _______________, 19__, receipt
of which is hereby acknowledged, at a purchase price of _____% of the principal
amount thereof, plus interest accrued on the amount thereof, principal amount at
the rate borne by the Offered Securities from _______________, 19__ to the
Delivery Date, and on the further terms and conditions set forth in this
contract.
Payment for the Offered Securities shall be made to the Company or its
order by [specify method], at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York, at 10 A.M., New York City time, on the Delivery Date
(or in such other funds and/or at such other place as the Company and the
undersigned may agree upon in writing), upon delivery of the Offered Securities
to the undersigned, in such authorized denominations and registered in such
names as the undersigned may request in writing addressed to the Company not
less than five business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Offered Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of the Offered Securities by the undersigned
shall not, on the Delivery Date, be prohibited under the laws of any
jurisdiction to which the undersigned is subject and that govern
<PAGE>
IV-2
such investment, and (2) the Company, on or before _________, 199_, shall have
sold to the Underwriters of the Offered Securities (the "Underwriters") such
principal amount of the Offered Securities as is to be sold to them pursuant to
the Underwriting Agreement dated the date hereof between the Company and the
Underwriters. The obligation of the undersigned to take delivery of and make
payment for the Offered Securities shall not be affected by the failure of any
Underwriter or other purchaser to take delivery of and make payment for the
Offered Securities pursuant to other contracts similar to this contract.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned, at its address set forth below, a
notice to such effect.
By the execution hereof, the undersigned represents and warrants to
the Company that (1) its investment in the Offered Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and that govern such investment, (2) all necessary
corporate action for the due execution and delivery of this contract and the
payment for and purchase of the Offered Securities has been taken by it and no
further authorization or approval of any governmental or other regulatory
authority is required for such execution, delivery, payment or purchase and (3)
upon the acceptance by the Company and the mailing or delivery of a copy as
provided below, this contract will constitute a valid and binding agreement of
the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate principal amount of the Offered Securities in excess
of $__________ and that the acceptance of any Delayed Delivery Contract is in
the Company's sole discretion and, without limiting the foregoing, need not be
on a first-come, first-served basis. If this contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance on a copy
hereof and mail or deliver a signed copy to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
<PAGE>
IV-3
This contract shall be governed by the laws of the State of New York.
Yours very truly,
_________________________________
(Name of Purchaser)
By ______________________________
Title:
_________________________________
_________________________________
(Address)
Accepted as of the date first above written:
CABLEVISION SYSTEMS CORPORATION
By _____________________________
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed is as
follows: (Please print.)
Telephone No.
Name (including Area Code)
- ---- -------------------
<PAGE>
SCHEDULE V
RESTRICTED SUBSIDIARIES
-----------------------
<PAGE>
SCHEDULE VI
UNRESTRICTED SUBSIDIARIES
-------------------------
<PAGE>
EXHIBIT 1.2
S&S DRAFT
10/12/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
----------------------
Dated: _______, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
----------------------
______, 1995
To the Underwriters named in Schedule I
Dear Sirs:
Cablevision Systems Corporation, a Delaware corporation
(the "Company"), proposes to issue and sell to the underwriters
named in Schedule I the number of shares of the Company's Common
Stock, par value $.01 per share, specified in Schedule II (the
"Offered Securities"), on the terms and conditions stated herein
and in Schedule II. As used herein, unless the context otherwise
requires, the term "Underwriters" shall mean the firms named as
Underwriters in Schedule I, and the term "you" shall mean the
Underwriters. The Offered Securities are more fully described in
the Prospectus and the Prospectus Supplement referred to below.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form S-3 (Registration No. 33-62313), including a prospectus,
relating to certain of its securities, including its common
stock, par value $.01 per share (including the Offered
Securities), and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as
amended (the "1933 Act"). Such registration statement has been
declared effective by the Commission. As provided in
Section 3(a), a prospectus supplement reflecting the terms of the
Offered Securities, the terms of the offering thereof and the
other matters set forth therein has been prepared and will be
filed pursuant to Rule 424 under the 1933 Act. Such prospectus
supplement, in the form first filed after the date hereof
pursuant to Rule 424(b), is herein referred to as the "Prospectus
Supplement". Such registration statement, as amended at the date
hereof, including the exhibits thereto and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, is herein called the "Registration
Statement", and the basic prospectus included therein relating to
all offerings of securities under the Registration Statement, as
supplemented by the
<PAGE>
2
Prospectus Supplement, is herein called the "Prospectus",
except that, if such basic prospectus is amended or supplemented
on or prior to the date on which the Prospectus Supplement is
first filed pursuant to Rule 424, the term "Prospectus" shall
refer to the basic prospectus as so amended or supplemented and
as supplemented by the Prospectus Supplement, in either case
including the documents filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), that are incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act.
Section 1. Representations and Warranties. (a) The
Company represents and warrants to and agrees with each of the
Underwriters that:
(i) The Company meets the requirements for use of Form
S-3 under the 1933 Act and on the original effective date of
the Registration Statement and on the effective date of the
most recent post-effective amendment thereto, if any, the
Registration Statement complied in all material respects
with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act
Regulations") and did not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; on the date hereof and at the
Closing Time (as defined below), (A) the Registration
Statement and any amendments and supplements thereto, comply
and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations,
(B) neither the Registration Statement nor any amendment or
supplement thereto includes or will include an untrue
statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading and (C)
neither the Prospectus nor any amendment or supplement
thereto includes or will include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty
does not apply to statements or omissions made in reliance
upon and in conformity with information furnished in writing
by you to the Company expressly for use in the Registration
Statement or the Prospectus.
(ii) The documents incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 under the 1933
Act, at the time they were filed with the Commission,
complied in all material respects with the requirements of
the 1934 Act, and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the
Prospectus, do not and will not, on the date hereof and at
all times subsequent thereto up to the Closing Time, include
an untrue statement of a material fact or omit to state a
material fact required to be stated
<PAGE>
3
therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iii) KPMG Peat Marwick LLP, who are reporting upon
the audited financial statements and schedules included or
incorporated by reference in the Registration Statement, are
independent accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed
and delivered by the Company.
(v) The consolidated historical financial statements
included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position
of the Company and its subsidiaries as of the dates
indicated and the consolidated results of operations and
changes in financial position of the Company and its
subsidiaries for the periods specified. Such financial
statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement
schedules, if any, included in the Registration Statement
present fairly the information required to be stated
therein. The selected financial data included in the
Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the
audited consolidated financial statements included or
incorporated by reference in the Registration Statement.
The pro forma financial statements and other pro forma
financial information included in the Prospectus present
fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been
properly compiled on the pro forma bases described therein,
and, in the opinion of the Company, the assumptions used in
the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(vi) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware with power and authority (corporate and
other) under such laws to own, lease and operate its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to transact
business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
<PAGE>
4
(vii) The subsidiaries of the Company set forth on
Schedule IV are, as of the date hereof, all of the
"Restricted Subsidiaries", as such term is defined under
each of (a) the indenture, dated as of April 1, 1992, for
the Company's 10-3/4% Senior Subordinated Debentures due
2004, (b) the indenture, dated as of February 15, 1993, for
the Company's 9-7/8% Senior Subordinated Debentures due 2013
and (c) the indenture, dated as of April 1, 1993, for the
Company's 9-7/8% Senior Subordinated Debentures due 2023;
and the Bank Credit Agreement (as such term is defined in
each of the indentures referred to in (a), (b) and (c)
above). The subsidiaries of the Company set forth on
Schedule V are Unrestricted Subsidiaries (the Restricted
Subsidiaries and the Unrestricted Subsidiaries are
hereinafter referred to collectively as the "Subsidiaries").
The Subsidiaries on Schedules IV and V with an asterisk by
their names are the only subsidiaries of the Company which
had at December 31, 1994 assets in excess of 10% of the
consolidated assets of the Company and its subsidiaries as
at that date or had, in the aggregate, for the fiscal year
then ended revenues or operating cash flow in excess of 10%
of consolidated revenues or consolidated operating cash flow
of the Company and its subsidiaries for such period (such
Subsidiaries are referred to herein as the "Material
Subsidiaries"). In making this determination, any
subsidiary acquired after December 31, 1994 shall be deemed
to have been acquired as of such date.
(viii) Each Material Subsidiary that is a
corporation is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation with power and authority (corporate and other)
under such laws to own, lease and operate its properties and
conduct its business; and each such Material Subsidiary is
duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which
it owns or leases property of a nature, or transacts
business of a type, that would make such qualification
necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material
adverse effect on the Company and its subsidiaries,
considered as one enterprise. All of the outstanding shares
of capital stock of each Material Subsidiary have been duly
authorized and validly issued and are fully paid and non-
assessable and, except as disclosed on Schedule IV or V to
this Agreement or as disclosed or contemplated by the
Prospectus, are owned by the Company, directly or through
one or more subsidiaries, free and clear of any pledge,
lien, security interest, charge, claim, equity or
encumbrance of any kind.
(ix) Each of the Material Subsidiaries in which the
Company or a subsidiary of the Company is a limited or
general partner (hereinafter called the "Partnerships") has
been duly formed and is validly existing as a limited or
general partnership, as the case may be, under the laws of
its jurisdiction of organization, with full power and
authority to own, lease and operate properties and conduct
its business; all necessary filings with respect to the
formation of the Partnerships as limited or general
partnerships (as the case may be) have been made under such
laws; and each of the Partnerships is duly qualified
<PAGE>
5
to transact business and is in good standing in each other
jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have
a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(x) The Offered Securities have been duly authorized
and, when issued and paid for as provided herein, the
Offered Securities will be validly issued, fully paid and
nonassessable; no holder thereof will be subject to personal
liability by reason of being such a holder; such Offered
Securities are not subject to the preemptive rights of any
stockholder of the Company; and all corporate action
required to be taken for the authorization, issue and sale
of such Offered Securities has been validly and sufficiently
taken and the Offered Securities conform in all material
respects to the description thereof contained in the
Prospectus.
(xi) All of the other outstanding shares of capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; no holder
thereof is or will be subject to personal liability by
reason of being such a holder; none of the outstanding
shares of capital stock was issued in violation of the
preemptive rights of any stockholder of the Company.
(xii) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or
contemplated thereby, there has not been (A) any material
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
governmental action, order or decree and there has not been
any change in the capital stock or long term debt of the
Company or any of its Subsidiaries or any change which the
Company has reasonable cause to believe will involve any
material adverse change, or any development involving a
prospective material adverse change, in or affecting the
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, considered
as one enterprise, or (B) any transaction entered into by
the Company or any subsidiary, other than in the ordinary
course of business, that is material to the Company and its
subsidiaries, considered as one enterprise, or (C) except
for [specify exceptions] any dividend or distribution of any
kind declared, paid or made by the Company on its capital
stock.
(xiii) Neither the Company nor any Subsidiary is in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which it is a party or by which
it may be bound or to which any of its properties may be
subject, except for such defaults that would not have a
material adverse
<PAGE>
6
effect on the financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
considered as one enterprise. The execution and delivery by
the Company of this Agreement, the issuance and delivery of
the Offered Securities, the consummation by the Company of the
transactions contemplated by this Agreement and compliance by
the Company with the terms of this Agreement, have been duly
authorized by all necessary corporate action on the part of
the Company and do not and will not result in any violation of
the charter or by-laws of the Company or any Subsidiary, and
do not and will not conflict with, or result in a breach of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any Subsidiary under (A) any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party
or by which it may be bound or to which any of its properties
may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have
a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries, considered as one enterprise) or (B) any
existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of its properties (except for
such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on
the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, considered as
one enterprise), or (C) any material agreement or other
material instrument (including any franchise agreement,
license, permit or other governmental authorization granted by
the Federal Communications Commission (hereinafter called the
"FCC"), The New York State Commission on Cable Television, the
Massachusetts Cable Television Commission or any other
governing body having jurisdiction over cable television
operations) binding upon the Company or any of its
Subsidiaries (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a
material adverse effect on the financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries, considered as one enterprise).
(xiv) The statements in the Prospectus under "Risk
Factors", "Description of Capital Stock -- Class A Common
Stock and Class B Common Stock" and "Recent Developments --
Impact of Pending Telecommunications Legislation of FCC
Cable Rate Regulation" and the statements in the Company's
annual report on Form 10-K for the year ended December 31,
1994 (the "1994 Form 10-K"), which is incorporated by
reference in the Prospectus, under "Business -- Cable
Television Operations -- Competition" and "Business -- Cable
Television Operations -- Regulation" and in the Registration
Statement in Item 15, and the statements cross referenced
therein, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred
<PAGE>
7
to therein, with respect to such legal matters, documents and
proceedings, do not contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein not misleading.
(xv) Except as disclosed in the Prospectus, no
authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic
or foreign (other than under the 1933 Act and the securities
or blue sky laws of the various states), is required for the
valid authorization, issuance, sale and delivery of the
Offered Securities in the United States, or for the
execution, delivery or performance of this Agreement by the
Company except for any such consent, approval,
authorization, order or registration the failure of which to
obtain or make or the absence of which would result in no
material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(xvi) Except as disclosed in the Prospectus, there
is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic
or foreign, now pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or
any Subsidiary that is required to be disclosed in the
Prospectus or that the Company has reasonable cause to
believe will result in any material adverse change in the
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
considered as one enterprise or will materially and
adversely affect the properties or assets of the Company and
its subsidiaries, considered as one enterprise, or that the
Company has reasonable cause to believe will materially
adversely affect the consummation of the transactions
contemplated in this Agreement.
(xvii) There are no contracts or documents of a
character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described and filed
as required.
(xviii) The Company and the Subsidiaries each has
good and marketable title to all material properties and
assets described in the Prospectus as owned by it, free and
clear of all liens, charges, encumbrances or restrictions,
except such as (A) are described in the Prospectus, or
(B) are neither material in amount nor materially
significant in relation to the business of the Company and
its subsidiaries, considered as one enterprise; and any
material real property and buildings under lease by the
Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as do
not interfere, to an extent material to the Company and its
subsidiaries, considered as one enterprise, with the use
made and proposed to be made of such property and buildings
by the Company and the Subsidiaries.
(xix) Except as disclosed in the Prospectus, the
Company and the Subsidiaries each owns, possesses or has
obtained all material agreements, governmental licenses,
<PAGE>
8
permits, certificates, consents, orders, approvals and other
material authorizations (including, without limitation, all
material governmental authorizations and agreements with
public utilities and microwave transmission companies and
pole access and rental agreements) necessary to own or
lease, as the case may be, and to operate its properties and
to carry on its business as presently conducted, and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders,
approvals or authorizations.
(xx)To the best knowledge of the Company, and except
as disclosed in the Prospectus, no labor problem exists with
its employees or with employees of the Subsidiaries that
could reasonably be expected to materially and adversely
affect the financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
considered as one enterprise.
(b) Any certificate signed by any officer of the
Company or any Subsidiary and delivered to you or to counsel for
the Underwriters in connection with the offering of the Offered
Securities shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriters;
Closing. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase
from the Company, at the purchase price to the Underwriters set
forth in Schedule II, the principal amount of Offered Securities
set forth opposite the name of such Underwriter in Schedule I.
(b) Payment of the purchase price for, and delivery
of, the Offered Securities shall be made at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022, or at such other place in the City of New York, at 10:00
A.M. as shall be agreed upon by the Company and you, or as shall
otherwise be provided in Section 10 (such date and time of
payment and delivery being herein called the "Closing Time").
Payment shall be made to the Company in the manner specified in
Schedule II hereto, against delivery of the Offered Securities to
you for the respective accounts of the several Underwriters.
Except as otherwise provided in Schedule II hereto, such Offered
Securities shall be in such denominations and registered in such
names as you may request in writing at least two full business
days before the Closing Time. Such Offered Securities will be
made available in New York City for examination and packaging by
you not later than 10:00 A.M. on the business day prior to the
Closing Time.
<PAGE>
9
Section 3. Certain Covenants of the Company. The
Company covenants with each Underwriter as follows:
(a) If reasonably requested by you in connection with
the offering of the Offered Securities, the Company will
have prepared a preliminary prospectus supplement containing
such information as you and the Company deem appropriate,
and, immediately following the execution of this Agreement,
the Company will prepare a Prospectus Supplement that
complies with the 1933 Act and the 1933 Act Regulations and
that sets forth the number of shares of Offered Securities
and their terms, the name of each Underwriter participating
in the offering and the number of shares of the Offered
Securities that each severally has agreed to purchase, the
name of each Underwriter, if any, acting as representative
of the Underwriters in connection with the offering, the
price at which the Offered Securities are to be purchased by
the Underwriters from the Company, any initial public
offering price, any selling concession and reallowance, and
such other information as you and the Company deem
appropriate in connection with the offering of the Offered
Securities. The Company will promptly transmit copies of
the Prospectus Supplement to the Commission for filing
pursuant to Rule 424 under the 1933 Act and will furnish to
the Underwriters as many copies of any preliminary
prospectus supplement and the Prospectus as you shall
reasonably request.
(b) During the period when the Prospectus is required
by the 1933 Act to be delivered in connection with sales of
the Offered Securities, the Company will, subject to Section
3(c), file promptly all documents required to be filed with
the Commission pursuant to Section 13 or 14 of the 1934 Act
subsequent to the time the Registration Statement becomes
effective.
(c) During the period when the Prospectus is required
by the 1933 Act to be delivered in connection with sales of
the Offered Securities, the Company will inform you of its
intention to file any amendment to the Registration
Statement, any supplement to the Prospectus or any document
that would as a result thereof be incorporated by reference
in the Prospectus; will furnish you with copies of any such
amendment, supplement or other document a reasonable time in
advance of filing; and will not file any such amendment,
supplement or other document in a form to which you or your
counsel shall reasonably object.
(d) During the period when the Prospectus is required
by the 1933 Act to be delivered in connection with sales of
the Offered Securities, the Company will notify you
immediately, and confirm the notice in writing (with respect
to clause (i), upon request), (i) of the effectiveness of
any amendment to the Registration Statement, (ii) of the
receipt of any comments from the Commission with respect to
the Registration Statement, the Prospectus or the Prospectus
Supplement, (iii) of any request by the Commission to
<PAGE>
10
amend the Registration Statement or any supplement to the
Prospectus or for additional information relating thereto
and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Offered
Securities for offering or sale in any jurisdiction, or of
the institution or to the Company's knowledge, the
threatening of any proceedings for any of such purposes.
The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order preventing
or suspending such use and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(e) The Company has furnished or will furnish to you
one signed copy for the managing Underwriters of each of the
Registration Statement (as originally filed) and of all
amendments thereto, whether filed before or after the
Registration Statement became effective, and as many copies
of all exhibits and documents filed therewith, including
documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act (through
the end of the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the
Offered Securities) and signed copies of all consents and
certificates of experts, as you may reasonably request, and
has furnished or will furnish to each of you, as many
conformed copies of the Registration Statement as originally
filed and of each amendment thereto (including documents
incorporated by reference into the Prospectus but without
exhibits) as you may reasonably request.
(f) The Company will use its reasonable best efforts,
in cooperation with the Underwriters, to qualify the Offered
Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as
you may designate and to maintain such qualifications in
effect for a period of not less than one year from the date
hereof; provided, however, that the Company shall not be
obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not
otherwise so subject. The Company will file such statements
and reports as may be required by the laws of each
jurisdiction in which the Offered Securities have been
qualified as above provided. The Company will also supply
you with such information as is necessary for the
determination of the legality of the Offered Securities for
investment under the laws of such jurisdictions as you may
reasonably request.
(g) The Company will make generally available to its
security holders as soon as practicable, but not later than
45 days after the close of the period covered thereby (90
calendar days in the case the period corresponds to the
fiscal year of the Company), an earnings statement of the
Company (in form complying with the provisions of Rule 158
of the 1933 Act Regulations), covering a period of 12 months
beginning after the
<PAGE>
11
effective date of the Registration Statement and covering a
period of 12 months beginning after the effective date of any
post-effective amendment to the Registration Statement but
not later than the first day of the Company's fiscal quarter
next following such effective date.
(h) The Company will comply to the best of its ability
with the 1933 Act and the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations so as to permit the completion
of the distribution of the Offered Securities as
contemplated in this Agreement and in the Prospectus. If at
any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered
Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel
for the Underwriters or counsel for the Company, to amend
the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion of either such
counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(c), such amendment or
supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement
or the Prospectus comply with such requirements.
(i) The Company will use the net proceeds
received by it from the sale of the Offered Securities
in the manner specified in the Prospectus under the
caption "Use of Proceeds".
(j) For a period of three years after the Closing
Time, the Company will furnish to you copies of all annual
reports, quarterly reports and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be
furnished by the Company to its stockholders generally.
(k) Between the date hereof and the Closing Time or
such other date as may be specified in Schedule II, the
Company will not, without the prior written consent of the
Underwriters, offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock, par value $.01 per
share, of the Company or warrants, rights or options
exercisable at any time therefor in any public offering
(other than the Offered Securities).
<PAGE>
12
Section 4. Payment of Expenses. The Company will pay
and bear all costs and expenses incident to the performance of
its obligations under this Agreement, including (a) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally
filed and as amended, any preliminary prospectus supplements and
the Prospectus and any amendments or supplements thereto, and the
cost of furnishing copies thereof to the Underwriters, (b) the
preparation, printing and distribution of this Agreement, the
Offered Securities, the Blue Sky Survey, (c) the delivery of the
Offered Securities to the Underwriters, (d) the fees and
disbursements of the Company's counsel and accountants and
(e) the qualification of the Offered Securities under the
applicable securities laws in accordance with Section 3(f) and
any filing for review of the offering with the National
Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the Blue Sky Survey.
If this Agreement is terminated by you in accordance
with the provisions of Section 5 or 9(a)(i), the Company shall
reimburse the Underwriters for all their out-of-pocket expenses,
including the fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations.
Except as otherwise provided in Schedule II, the obligations of
the several Underwriters to purchase and pay for the Offered
Securities that they have respectively agreed to purchase
hereunder are subject to the accuracy of the representations and
warranties of the Company contained herein or in certificates of
any officer of the Company or any Subsidiary delivered pursuant
to the provisions hereof, to the performance by the Company of
its obligations hereunder, and to the following further
conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, shall be contemplated by
the Commission, and any request on the part of the
Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel for
the Underwriters.
(b) At the Closing Time, you shall have received a
signed opinion of Sullivan & Cromwell, counsel for the
Company, dated as of the Closing Time, in form and substance
satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws
of the State of Delaware.
<PAGE>
13
(ii) The Offered Securities have been duly
authorized and validly issued and are fully paid and
nonassessable; no holder thereof is or will be subject
to personal liability under the Company's Certificate
of Incorporation or by-laws or the Delaware General
Corporation Law by reason of being such a holder; and
such Offered Securities are not subject to the
preemptive rights of any stockholder of the Company
under the Company's Certificate of Incorporation or
by-laws or the Delaware General Corporation Law.
(iii) The execution and delivery of this
Agreement by the Company and the issuance and delivery
by the Company of the Offered Securities to the
Underwriters and compliance by the Company with the
terms of this Agreement do not and will not result in
any violation of the Certificate of Incorporation or
By-laws of the Company; and all regulatory consents,
authorizations, approvals and filings required to be
obtained or made by the Company under the Federal laws
of the United States, the laws of the State of New York
and the General Corporation Law of the State of
Delaware for the issuance, sale and delivery of the
Offered Securities by the Company to the Underwriters
have been obtained or made.
(iv) This Agreement has been duly authorized,
executed and delivered by the Company.
Such counsel shall also furnish you with a letter to
the effect that as counsel to the Company, they reviewed the
Registration Statement and the Prospectus, participated in
discussions with representatives of the Underwriters and of
the Company and its accountants and advised the Company as
to the requirements of the 1933 Act and the applicable rules
and regulations thereunder; between the date of the
Prospectus Supplement and the Closing Time, such counsel
participated in further discussions with representatives of
the Underwriters and of the Company and its accountants in
which the contents of certain portions of the Prospectus and
related matters were discussed and reviewed certain
documents filed by the Company with the Commission,
certificates of certain officers of the Company, an opinion
addressed to the Underwriters from Robert S. Lemle, Esq. and
a letter from the Company's independent accountants; on the
basis of the information that such counsel gained in the
course of the performance of the services referred to above,
considered in the light of such counsel's understanding of
the applicable law (including the requirements of Form S-3
and the character of the prospectus contemplated thereby)
and the experience such counsel have gained through their
practice under the 1933 Act, they confirm to you that, in
such counsel's opinion, the Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates appeared on their
face to be appropriately responsive in all material respects
to the requirements of the 1933 Act, and the applicable
<PAGE>
14
rules and regulations of the Commission thereunder; further,
nothing that came to such counsel's attention in the course
of such review has caused such counsel to believe that any
part of the Registration Statement, when such part became
effective, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date of the
Prospectus Supplement contained any untrue statement of a
material fact or omitted to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; also, nothing that came to the attention of such
counsel in the course of the procedures described in the
second clause of this paragraph has caused such counsel to
believe that the Prospectus, as supplemented by the
Prospectus Supplement, as of the Closing Time, contained any
untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; such counsel shall state that the
limitations inherent in the independent verification of
factual matters and the character of determinations involved
in the registration process are such that such counsel does
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus except for those made under the
captions "Description of Common Stock -- Class A Common
Stock and Class B Common Stock" and "Plan of Distribution"
in the Prospectus insofar as they relate to provisions of
documents therein described; also, such counsel need express
no opinion or belief as to the financial statements or other
financial data contained in the Registration Statement or
the Prospectus, or as to the description of statutes,
regulations, proceedings or matters referred to in Section
5(d) hereof.
In rendering such opinion, such counsel may state that
they express no opinion as to the laws of any jurisdiction
other than the Federal laws of the United States, the laws
of the State of New York and the General Corporation Law of
the State of Delaware and no opinion as to federal or
communications laws. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and the Subsidiaries and
certificates of public officials.
(c) At the Closing Time you shall have received a
signed opinion of Robert S. Lemle, Esq., Executive Vice
President, Secretary and General Counsel for the Company, in
form and substance satisfactory to counsel to the
Underwriters, to the effect that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware with corporate power and
authority under such laws to own, lease and operate its
properties and conduct its business as described in the
Prospectus.
<PAGE>
15
(ii) The Company is duly qualified to transact
business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a
type, that would make such qualification necessary,
except where the failure to be so qualified would not
have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(iii) Each Material Subsidiary that is a
corporation is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of
its incorporation, with corporate power and authority
under such laws to own, lease and operate its
properties and conduct its business. Each Material
Subsidiary that is a partnership is duly organized
under the laws of the jurisdiction of its organization.
(iv) All of the outstanding shares of capital
stock of each Material Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable; except as set forth on Schedules IV and
V to this Agreement or as disclosed in or as
contemplated by the Prospectus, all of such shares are
owned by the Company, directly or through one or more
subsidiaries, free and clear of any material pledge,
lien, security interest, charge, claim, equity or
encumbrance of any kind; no holder thereof is subject
to personal liability under the certificate of
incorporation or by-laws of the respective Material
Subsidiary or the corporation law of the jurisdiction
in which such Material Subsidiary is organized by
reason of being such a holder and none of such shares
was issued in violation of the preemptive rights of any
stockholder of such Material Subsidiary under the
certificate of incorporation or by-laws of such
Material Subsidiary or the corporation law of the
jurisdiction in which such Material Subsidiary is
organized.
(v) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is or
may be a party, or of which any of their properties are
or may be the subject, of a character which are
required to be disclosed in the Registration Statement,
the Prospectus, the annual Form 10-K or any Form 10-Q
of the Company, other than those disclosed therein.
(vi) The documents incorporated by reference in
the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Closing Time
(other than the financial statements and related
schedules therein and any untrue statement or omission
of a material fact contained therein which was
corrected in the Prospectus, as to which such counsel
need express no opinion), when they became effective or
were filed with the Commission, as the
<PAGE>
16
case may be, complied as to form in all material respects
with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and he has
no reason to believe that such documents considered
together contained as of the date of the Prospectus
Supplement or as of the Closing Time contained an
untrue statement of a material fact or omitted to state
a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made not misleading.
(vii) Such counsel does not know of any
contracts or documents of a character required to be
described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described, referred
to or filed as required.
(viii) To the knowledge of such counsel, no
default exists in the performance or observance of any
material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement,
note, lease or other agreement or instrument that is
described or referred to in the Registration Statement
or the Prospectus or filed as an exhibit to the
Registration Statement or any subsequent Form 10-Q of
the Company, which default would have a material
adverse effect on the financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries, considered as one enterprise.
(ix) The execution and delivery of the Operative
Documents by the Company, the issuance and delivery of
the Offered Securities, the consummation by the Company
of the transactions contemplated in this Agreement and
compliance by the Company with the terms of this
Agreement will not conflict with the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument (including any franchise
agreement, license, permit or other governmental
authorization granted by the FCC, The State of New York
Commission on Cable Television, or any other Federal or
New York State governing body having
<PAGE>
17
jurisdiction over cable television operations) known to
such counsel to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound
or to which any of the property or assets of the Company
or any Subsidiary is subject, which conflict, breach,
violation or default would have a material adverse
effect on the financial position, stockholders' equity
or results of operations of the Company and its
subsidiaries, taken as a whole, nor will such action
result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company
or any Federal, New York or Delaware General
Corporation Law statute or any order, rule or
regulation known to such counsel of any Federal, New
York or Delaware court or governmental agency or body
having jurisdiction over the Company or any Subsidiary
or any of their properties, which violation in each
case would have a material adverse effect on the
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken
as a whole; and no consent, approval, authorization,
order, registration or qualification of or with any
such court or governmental agency or body is required
for the issue and sale of the Offered Securities or the
consummation by the Company of the transactions
contemplated by this Agreement, except with respect to
such consents, approvals, authorizations, registrations
or qualifications as may be required under state or
foreign securities laws in connection with the purchase
and distribution of the Offered Securities by the
Underwriters.
(x) All of the other outstanding shares of
capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of
the preemptive rights of any stockholder of the Company
under the Company's Certificate of Incorporation or By-
Laws or the Delaware General Corporation Law.
In rendering such opinion, such counsel may state that
he expresses no opinion as to the laws of any jurisdiction other
than the Federal laws of the United States (other than federal
communications laws, as to which such counsel need express no
opinion), the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving such
opinion, such counsel may rely, as to all matters governed by the
laws of any other jurisdiction, upon opinions of other counsel,
who shall be counsel satisfactory to counsel for the
Underwriters, in which case the opinion shall state that he
believes you and he are entitled to so rely. Such counsel may
also state that, insofar as such opinion involves factual
matters, he has relied, to the extent he deems proper, upon
certificates of officers of the Company and the Subsidiaries and
certificates of public officials.
(d) At the Closing Time you shall have received a
signed opinion of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., as special federal communications counsel to
the Company, in form and substance satisfactory to counsel
to the Underwriters, to the effect that:
(i) The approvals, if any, required to be
obtained from the FCC to consummate the transactions
contemplated by this Agreement have been obtained and
are in full force and effect.
(ii) Such counsel does not know of any federal
communications and copyright statutes that are
principally directed to the regulation of cable
properties
<PAGE>
18
applicable to the Company that are not described in
the Prospectus but would be material and relevant to
the business of the Company, and the descriptions in
the Prospectus of such statutes therein described are
accurate and fairly summarize such statutes.
(iii) The information in the Registration
Statement and Prospectus under the captions "Risk
Factors -- Risk Related to Cable Regulation", "Risk
Factors -- Risk of Competition" and "Risk Factors --
Competition from Telephone Companies" and in the [____
Form 10-K] under the captions "Business -- Cable
Television Operations -- Regulation", to the extent
that such sections describe statutes, regulations and
governmental proceedings or matters involving federal
communications and copyright law and policy and the
impact thereof on the business in which the Company and
its subsidiaries are engaged, has been reviewed by them
and fairly represents the communications and copyright
law described therein applicable to the Company and its
subsidiaries as disclosed in the Prospectus and
material and relevant to the business of the Company
and its subsidiaries.
In giving such opinion, such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the
law of the District of Columbia, the federal law of the
United States and the corporate law of the State of
Delaware, upon opinions of other counsel, who shall be
counsel satisfactory to counsel for the Underwriters, in
which case the opinion shall state that they believe you and
they are entitled to so rely. Such counsel may also state
that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Subsidiaries
and certificates of public officials. Such counsel may
strictly confine such opinion to matters involving the
Federal Communications Act of 1934, as amended (the
"Communications Act"), the rules and regulations of the
Federal Communications Commission ("FCC"), and those
provisions of the federal copyright law that are principally
directed to the regulation of the cable properties. Such
counsel may also limit such opinion to the state of the law
as it exists under the Communications Act, the rules and
regulations of the FCC, and federal copyright law as of the
date thereof.
(e) At the Closing Time, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the
Underwriters, dated as of the Closing Time, to the effect
that the opinions delivered pursuant to Sections 5(b), 5(c)
and 5(d) appear on their face to be appropriately responsive
to the requirements of this Agreement except, specifying the
same, to the extent waived by you, and with respect to the
incorporation and legal existence of the Company, the
Offered Securities, this Agreement, the Registration
Statement, the Prospectus, the documents incorporated by
reference and such other related matters as you may require.
In rendering such opinion, such counsel may
<PAGE>
19
state that they express no opinion as to the laws of any
jurisdiction other than the Federal laws of the United
States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and no opinion as
to federal or state communications laws. Such counsel may
also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and the
Subsidiaries and certificates of public officials.
(f) At the Closing Time, (i) the Registration
Statement and the Prospectus, as they may then be amended or
supplemented, in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations
and neither the Registration Statement nor the Prospectus,
as they may then be amended or supplemented, shall contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) there shall
not have been, since the respective dates as of which
information is given in the Registration Statement, any
material adverse change or any development involving a
prospective material adverse change in or affecting the
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, considered
as one enterprise, (iii) the Company shall have complied
with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Time
and (iv) the other representations and warranties of the
Company set forth in Section 1(a) shall be accurate as
though expressly made at and as of the Closing Time. At the
Closing Time, you shall have received a certificate of the
President, a Vice Chairman or a Vice President, and the
Treasurer or Controller, of the Company, dated as of the
Closing Time, to such effect.
(g) You shall have received the letter or letters
specified in Sections 1 and 2 of Schedule III at the date
hereof and the letter specified in Section 3 of Schedule III
at the Closing Time.
(h) Unless otherwise specified in Schedule II hereto,
on or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities.
(i) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such documents,
certificates and opinions as they may reasonably request for
the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and
the matters referred to in Section 5(e) and in order to
evidence the accuracy and completeness of any of the
representations, warranties or
<PAGE>
20
statements of the Company, the performance of any of the
covenants of the Company, or the fulfillment of any of the
conditions herein contained.
If any of the conditions specified in this Section 5
shall not have been fulfilled when and as required by this
Agreement to be fulfilled, this Agreement may be terminated by
you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of
Sections 6, 7 and 8 shall remain in effect.
Section 6. Indemnification. (a) The Company agrees
to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), including all documents incorporated
therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading
or arising out of an untrue statement or alleged untrue
statement of a material fact included in any preliminary
prospectus supplement or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including fees and disbursements of counsel chosen
by you), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
<PAGE>
21
provided, however, that this indemnity agreement does not apply
to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary
prospectus supplement or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any
untrue statement contained in or any omission from the
preliminary prospectus supplement, shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter)
on account of any loss, claim, damage, liability or litigation
arising from the sale of Offered Securities to any person by such
Underwriter if such Underwriter failed to send or give a copy of
the Prospectus, as the same may be supplemented or amended, to
such person within the time required by the 1933 Act, and the
untrue statement or alleged untrue statement or omission or
alleged omission of a material fact in such preliminary
prospectus supplement was corrected in the Prospectus, unless
such failure resulted from noncompliance by the Company with
Section 3(a).
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the
1933 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity agreement in Section 6(a), as
incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any
preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by
such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or such
preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. In no event shall
the indemnifying party or parties be liable for the fees and
expenses of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances.
Section 7. Contribution. In order to provide for just
and equitable contribution in circumstances under which the
indemnity provided for in Section 6 is for any reason held to be
unenforceable by the indemnified parties although applicable in
accordance with its terms, the
<PAGE>
22
Company and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity incurred by the Company and one or
more of the Underwriters, as incurred, in such proportions that
the Underwriters are responsible for that portion represented by
the percentage that the underwriting discount hereunder with
respect to the offering of the Offered Securities bears to the
purchase price of the Offered Securities, and the Company is
responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if
any, who controls an Underwriter within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Agreements to Survive Delivery. The
indemnities, agreements and other statements of the Company or
its officers set forth in or made pursuant to this Agreement will
remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, any
Underwriter or any person who controls the Company or any
Underwriter within the meaning of Section 15 of the 1933 Act and
will survive delivery of and payment for the Offered Securities.
Section 9. Termination of Agreement. (a) You may
terminate this Agreement, by notice to the Company, at any time
at or prior to the Closing Time (i) if there has been, since the
respective dates as of which information is given in the
Registration Statement, any material adverse change or any
development involving a prospective material adverse change in or
affecting the financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, considered as
one enterprise, or (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as
to make it, in your judgment, impracticable to market the Offered
Securities or enforce contracts for the sale of the Offered
Securities or (iii) if trading in any securities of the Company
has been suspended by the Commission or the National Association
of Securities Dealers, Inc., or if trading generally on either
the American Stock Exchange or the New York Stock Exchange or in
the over-the-counter market has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or by
order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority or (iv) if a
banking moratorium has been declared by either federal or New
York authorities.
<PAGE>
23
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party, except to the extent provided in Section 4.
Notwithstanding any such termination, the provisions of
Sections 6, 7 and 8 shall remain in effect.
Section 10. Default. If one or more of the
Underwriters shall fail at the Closing Time to purchase the
Offered Securities that it or they are obligated to purchase (the
"Defaulted Offered Securities"), you shall have the right, within
24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Offered
Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the aggregate number of shares of Defaulted
Offered Securities does not exceed 10% of the aggregate
number of shares of the Offered Securities to be purchased
pursuant to this Agreement, the non-defaulting Underwriters
shall be obligated to purchase the full amount thereof in
the proportions that the number of shares of Offered
Securities set forth opposite the names of such non-
defaulting Underwriters in Schedule I bear to the total
aggregate number of shares of Securities set forth opposite
the names of such non-defaulting Underwriters, or
(b) if the aggregate number of shares of Defaulted
Offered Securities exceeds 10% of the aggregate number of
shares of the Offered Securities to be purchased, this
Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve
any defaulting Underwriter from liability in respect of its
default.
In the event of any such default that does not result
in a termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period
not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter
under this Section 10.
Section 11. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered, mailed or transmitted by
any standard form of telecommunication. Notices to the
Underwriters shall be directed as set forth in Schedule I.
Notices to the Company shall be directed to it at Cablevision
Systems Corporation, One Media Crossways, Woodbury, New York
11797, attention of Robert S. Lemle, Esq., Senior
<PAGE>
24
Vice President, General Counsel and Secretary, with a copy to
Sullivan & Cromwell, at 125 Broad Street, New York, NY 10004,
attention of John P. Mead, Esq.
Section 12. Parties. The agreement herein set forth
is made solely for the benefit of the several Underwriters, the
Company and, to the extent expressed, any person who controls the
Company or any of the Underwriters within the meaning of
Section 15 of the 1933 Act, and the directors of the Company, its
officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns and,
subject to the provisions of Section 10, no other person shall
acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include any
purchaser, as such purchaser, from any Underwriter of the Offered
Securities. If there are two or more Underwriters, all of their
obligations hereunder are several and not joint.
Section 13. Governing Law and Time. This Agreement
shall be governed by the laws of the State of New York.
Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement may be
executed in one or more counterparts and when a counterpart has
been executed by each party, all such counterparts taken together
shall constitute one and the same agreement.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us a
counterpart hereof, whereupon this instrument will become a
binding agreement between the Company and each Underwriter in
accordance with its terms.
Very truly yours,
CABLEVISION SYSTEMS CORPORATION
By
----------------------------
Name:
Title:
<PAGE>
25
Confirmed and accepted as of
the date first above written:
[Insert signature block(s) for
the Representative or Representatives
acting on behalf of the
Underwriters or for each
Underwriter if no syndicate]
<PAGE>
SCHEDULE I
to Underwriting Agreement
Dated _________, 1995
CABLEVISION SYSTEMS CORPORATION
Class A Common Stock
Underwriter Number of
----------- Shares
to be Purchased
---------------
<PAGE>
SCHEDULE II
to Underwriting Agreement
Dated ________, 1995
CABLEVISION SYSTEMS CORPORATION
Common Stock
Number of shares:
Initial public offering price: $_____per share.
Purchase price: $_____ per share.
Method of payment:
Closing date, time and location:
Listing requirement: [None] [NYSE]
Underwriters' option to purchase additional shares from the Issuer
Other terms and conditions:
<PAGE>
SCHEDULE III
to Underwriting Agreement
Dated __________, 1995
MATTERS TO BE COVERED BY LETTER OR LETTERS OF INDEPENDENT
PUBLIC ACCOUNTANTS
KPMG Peat Marwick, LLP shall have furnished to you the
following letter or letters (in each case in form and substance
satisfactory to you):
(1) At the date hereof, a letter to the effect that:
(a) they are independent accountants with respect
to the Company and its subsidiaries within the meaning
of the 1933 Act and the applicable published 1933 Act
Regulations;
(b) in their opinion, except as disclosed in the
Registration Statement, the audited consolidated
financial statements and the related financial
statement schedules of the Company and its subsidiaries
included or incorporated by reference in such annual
report on Form 10-K comply as to form in all material
respects with the applicable accounting requirements of
the 1933 Act as it applies to registration statements
on Form S-3 and the related published 1933 Act
Regulations and of the 1934 Act as it applies to
Form 10-K and the related published 1934 Act
Regulations; and
(c) in addition to their examinations,
inspections, inquiries and other procedures referred to
therein, they have performed such other procedures,
specified by you, not constituting an audit, as they
have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Form 10-K and have
compared certain of such amounts, percentages,
numerical data and financial information with, and have
found such items to be in agreement with or derived
from, the detailed accounting records of the Company
and its subsidiaries.
(2) At the date hereof, a letter with respect to each
of the Company's quarterly reports on Form 10-Q (a "10-Q
Letter") filed prior to the date hereof and subsequent to
the Company's most recently filed annual report on
Form 10-K, to the effect that:
(a) they reaffirm as of the date of such letter
(and as though made on the date of such letter) all
statements made in the 10-K Letter, except that the
procedures specified therein shall have been carried
out to a specified date not more than five days prior
to the date of such 10-Q Letter;
<PAGE>
III-2
(b) on the basis of procedures (but not an
examination in accordance with generally accepted
auditing standards) consisting of:
(i) a reading of minutes of all meetings of
the stockholders and directors of the Company and
its subsidiaries and the __________ and
___________ Committees of the Company's Board of
Directors and any subsidiary committees from the
date of the latest audited consolidated financial
statements to the specified date referred to in
Section 2(a);
(ii) a reading of the unaudited condensed
consolidated financial statements of the Company
and its subsidiaries included in the quarterly
report on Form 10-Q dated the date of such 10-Q
Letter;
(iii) inquiries of certain officials of
the Company and its subsidiaries; and
nothing came to their attention that caused them to
believe that the unaudited condensed consolidated
financial statements included in such quarterly report
on Form 10-Q do not comply as to form in all material
respects with the applicable accounting requirements of
the 1934 Act as it applies to Form 10-Q and the related
published 1934 Act Regulations or that any material
modifications should be made to the unaudited condensed
consolidated financial statements included in such
quarterly report for them to be in conformity with
generally accepted accounting principles, except as
disclosed in the notes to such unaudited condensed
consolidated financial statements or as otherwise
described in such 10-Q Letter;
(c) in addition to their examinations,
inspections, inquiries and other procedures referred to
therein, they have performed such other procedures,
specified by you, not constituting an audit, as they
have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Form 10-Q and have
compared certain of such amounts, percentages,
numerical data and financial information with, and have
found such items to be in agreement with or derived
from, the detailed accounting records of the Company
and its subsidiaries.
(3) At the Closing Time, a letter dated the Closing
Time (the "Closing Letter"), to the effect that:
(a) they reaffirm as of the date of the Closing
Letter (and as though made on the date of the Closing
Letter) all statements made in the 10-K Letter and in
each 10-Q Letter, if any, except that the procedures
specified therein shall have been carried out to a
specified date not more than five days prior to the
date of the Closing Letter;
<PAGE>
III-3
(b) based on the procedures set forth in
Section 2(b) (but carried out to the specified date
referred to in Section 3(a)), nothing came to their
attention that caused them to believe that, from the
date of the latest balance sheet of the Company and its
subsidiaries included or incorporated by reference in
the Prospectus to such specified date, there were any
increases or decreases in financial statement amounts
specified by you as they have agreed to perform; and
(c) in addition to their examinations,
inspections, inquiries and other procedures referred to
therein, they have performed such other procedures,
specified by you, not constituting an audit, as they
have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Registration Statement,
the Prospectus and the exhibits to the Registration
Statement or in the documents incorporated by reference
in the Prospectus, and have compared certain of such
amounts, percentages, numerical data and financial
information with, and have found such items to be in
agreement with or derived from, the detailed accounting
records of the Company and its subsidiaries.
<PAGE>
SCHEDULE IV
to Underwriting Agreement
RESTRICTED SUBSIDIARIES
<PAGE>
SCHEDULE V
to Underwriting Agreement
UNRESTRICTED SUBSIDIARIES
<PAGE>
EXHIBIT 4.4
[S&S DRAFT
10/06/95]
================================================================================
CABLEVISION SYSTEMS CORPORATION,
Issuer,
TO
THE BANK OF NEW YORK,
Trustee
--------------------------
INDENTURE
Dated as of October __, 1995
-------------------------
Subordinated Debt Securities
================================================================================
<PAGE>
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of October __, 1995[ ]
Trust Indenture
Act Section Indenture Section
Section 310(a)(1) ................................... 607(a)
(a)(2) ................................... 607(a)
(b) ................................... 607(b), 608
Section 312(c) ................................... 701
Section 314(a) ................................... 703
(a)(4) ................................... 1004
(c)(1) ................................... 102
(c)(2) ................................... 102
(e) ................................... 102
Section 315(b) ................................... 601
Section 316(a)(last
sentence)................................... 101 ("Outstanding")
(a)(1)(A)................................... 502, 512
(a)(1)(B)................................... 513
(b) ................................... 508
(c) ................................... 104(e)
Section 317(a)(1) ................................... 503
(a)(2) ................................... 504
(b) ................................... 1003
Section 318(a) ................................... 111
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
PARTIES..................................................... 1
RECITALS OF THE COMPANY..................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.................................... 1
Act............................................ 2
Affiliate...................................... 2
Annualized Operating Cash Flow................. 2
Authenticating Agent........................... 2
Authorized Newspaper........................... 2
Bank Credit Agreement.......................... 2
Bankruptcy Law................................. 3
Banks.......................................... 3
Bearer Security................................ 3
Board of Directors............................. 3
Board Resolution............................... 3
Business Day................................... 3
Capital Stock.................................. 3
Capitalized Lease Obligation................... 3
Cash Flow Ratio................................ 3
CEDEL S.A...................................... 4
Class A Common Stock........................... 4
Commission..................................... 4
Common Depositary.............................. 4
Common Stock................................... 4
Company........................................ 4
Company Request................................ 4
Conversion Date................................ 4
Conversion Event............................... 4
Corporate Trust Office......................... 5
corporation.................................... 5
coupon......................................... 5
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
ii
Page
covenant defeasance............................ 5
Cumulative Cash Flow Credit.................... 5
Cumulative Interest Expense.................... 6
Currency....................................... 6
Custodian...................................... 6
Debt........................................... 6
Default........................................ 6
Defaulted Interest............................. 6
Default Notice................................. 6
defeasance..................................... 6
Disqualified Stock............................. 6
Dollar or $.................................... 7
Dollar Equivalent of the Currency Unit......... 7
Dollar Equivalent of the Foreign Currency...... 7
ECU............................................ 7
Election Date.................................. 7
Euroclear...................................... 7
European Communities........................... 7
European Monetary System....................... 7
Event of Default............................... 7
Exchange Date.................................. 7
Exchange Rate Agent............................ 7
Exchange Rate Officer's Certificate............ 7
Foreign Currency............................... 8
Government Obligations......................... 8
guarantee...................................... 8
Holder......................................... 8
Indebtedness................................... 8
Indenture...................................... 9
Indexed Security............................... 9
interest....................................... 9
Interest Payment Date.......................... 9
Interest Swap Obligations...................... 10
Investment..................................... 10
Junior Securities.............................. 10
Lien........................................... 10
Market Exchange Rate........................... 10
Maturity....................................... 11
Officers' Certificate.......................... 11
Operating Cash Flow............................ 11
Opinion of Counsel............................. 12
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Page
Original Issue Discount Security............... 12
Outstanding.................................... 12
Paying Agent................................... 13
Permitted Restricted Payment................... 13
Person......................................... 14
Place of Payment............................... 14
Predecessor Security........................... 14
Preferred Stock................................ 14
Redemption Date................................ 14
Redemption Price............................... 14
redesignation of a Restricted Subsidiary....... 14
Registered Security............................ 14
Regular Record Date............................ 15
Repayment Date................................. 15
Repayment Price................................ 15
Responsible Officer............................ 15
Restricted Payment............................. 15
Restricted Subsidiary.......................... 15
RPH............................................ 16
Securities..................................... 16
Security Register.............................. 16
Senior Indebtedness............................ 16
Special Record Date............................ 17
Stated Maturity................................ 17
Stock Payment.................................. 17
subsidiary..................................... 17
Subsidiary..................................... 17
successor...................................... 17
Trust Indenture Act or TIA..................... 17
Trustee........................................ 18
United States.................................. 18
United States.................................. 18
Unrestricted Subsidiary........................ 18
Valuation Date................................. 18
Vice President................................. 18
Voting Stock................................... 18
Yield to Maturity.............................. 18
SECTION 102. Compliance Certificates and Opinions........... 18
SECTION 103. Form of Documents Delivered to Trustee......... 19
SECTION 104. Acts of Holders................................ 20
SECTION 105. Notices, Etc. to Trustee and Company........... 22
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Page
SECTION 106. Notice to Holders; Waiver...................... 22
SECTION 107. Effect of Headings and Table of Contents....... 23
SECTION 108. Successors and Assigns......................... 23
SECTION 109. Separability Clause............................ 24
SECTION 110. Benefits of Indenture.......................... 24
SECTION 111. Governing Law.................................. 24
SECTION 112. Legal Holidays................................. 24
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally................................ 25
SECTION 202. Form of Trustee's Certificate of Authentication 25
SECTION 203. Securities Issuable in Global Form............. 26
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series........... 27
SECTION 302. Denominations.................................. 31
SECTION 303. Execution, Authentication, Delivery and Dating. 31
SECTION 304. Temporary Securities........................... 34
SECTION 305. Registration, Registration of Transfer and
Exchange.................................... 36
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.................................. 39
SECTION 307. Payment of Interest; Interest Rights Preserved;
Optional Interest Reset..................... 41
SECTION 308. Optional Extension of Stated Maturity.......... 44
SECTION 309. Persons Deemed Owners.......................... 45
SECTION 310. Cancellation................................... 45
SECTION 311. Computation of Interest........................ 46
SECTION 312. Currency and Manner of Payments in Respect of
Securities.................................. 46
SECTION 313. Appointment and Resignation of Successor
Exchange Rate Agent......................... 50
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture........ 51
SECTION 402. Application of Trust Money..................... 52
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Page
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.............................. 53
SECTION 502. Acceleration of Maturity; Rescission and
Annulment................................... 55
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee...................... 56
SECTION 504. Trustee May File Proofs of Claim............... 57
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities............................... 58
SECTION 506. Application of Money Collected................. 58
SECTION 507. Limitation on Suits............................ 59
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest............. 60
SECTION 509. Restoration of Rights and Remedies............. 60
SECTION 510. Rights and Remedies Cumulative................. 60
SECTION 511. Delay or Omission Not Waiver................... 60
SECTION 512. Control by Holders............................. 61
SECTION 513. Waiver of Past Defaults........................ 61
SECTION 514. Undertaking for Costs.......................... 62
SECTION 515. Waiver of Stay or Extension Laws............... 62
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults............................. 63
SECTION 602. Certain Rights of Trustee...................... 63
SECTION 603. Trustee Not Responsible for Recitals or
Issuance of Securities...................... 64
SECTION 604. May Hold Securities............................ 65
SECTION 605. Money Held in Trust............................ 65
SECTION 606. Compensation and Reimbursement................. 65
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests....................... 66
SECTION 608. Resignation and Removal; Appointment of
Successor................................... 67
SECTION 609. Acceptance of Appointment by Successor......... 68
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business................................. 69
SECTION 611. Appointment of Authenticating Agent............ 70
SECTION 612. Preferential Collection of Claims Against
Company..................................... 72
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Page
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders... 72
SECTION 702. Reports by Trustee............................. 72
SECTION 703. Reports by Company............................. 72
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms....................................... 73
SECTION 802. Successor Person Substituted................... 74
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders..................................... 74
SECTION 902. Supplemental Indentures with Consent of
Holders..................................... 76
SECTION 903. Execution of Supplemental Indentures........... 77
SECTION 904. Effect of Supplemental Indentures.............. 77
SECTION 905. Conformity with Trust Indenture Act............ 78
SECTION 906. Reference in Securities to Supplemental
Indentures.................................. 78
SECTION 907. Notice of Supplemental Indentures.............. 78
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and
Interest.................................... 78
SECTION 1002. Maintenance of Office or Agency................ 79
SECTION 1003. Money for Securities Payments to Be Held in
Trust....................................... 80
SECTION 1004. Corporate Existence............................ 82
SECTION 1005. Payment of Taxes and Other Claims.............. 82
SECTION 1006. Maintenance of Properties...................... 83
SECTION 1007. Limitation on Indebtedness..................... 83
SECTION 1008. Limitation on Senior Subordinated Indebtedness. 83
SECTION 1009. Limitation on Restricted Payments.............. 84
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SECTION 1010. Limitation on Investments in Unrestricted
Subsidiaries and Affiliates................. 85
SECTION 1011. Transactions with Affiliates................... 85
SECTION 1012. Provision of Financial Statements.............. 86
SECTION 1013. Statement as to Compliance..................... 86
SECTION 1014. Waiver of Certain Covenants.................... 86
SECTION 1015. Calculation of Original Issue Discount......... 87
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article....................... 87
SECTION 1102. Election to Redeem; Notice to Trustee.......... 87
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed.................................... 88
SECTION 1104. Notice of Redemption........................... 88
SECTION 1105. Deposit of Redemption Price.................... 89
SECTION 1106. Securities Payable on Redemption Date.......... 90
SECTION 1107. Securities Redeemed in Part.................... 91
ARTICLE TWELVE
SUBORDINATION
SECTION 1201. Securities Subordinated to Senior Indebtedness. 91
SECTION 1202. No Payment on Securities in Certain
Circumstances............................... 91
SECTION 1203. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Winding-
Up, Liquidation or Reorganization of the
Company..................................... 93
SECTION 1204. Securityholders to Be Subrogated to Rights of
Holders of Senior Indebtedness.............. 95
SECTION 1205. Obligations of the Company Unconditional....... 95
SECTION 1206. Knowledge of Trustee........................... 96
SECTION 1207. Application by Trustee or Paying Agent of
Assets Deposited with It.................... 96
SECTION 1208. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior
Indebtedness................................ 96
SECTION 1209. Securityholders Authorize Trustee to Effectuate
Subordination of Securities................. 97
SECTION 1210. Trustee Not Fiduciary for Holders of Senior
Indebtedness................................ 97
SECTION 1211. Right of Trustee to Hold Senior Indebtedness... 97
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Page
SECTION 1212. Article Twelve Not to Prevent Events of Default 98
SECTION 1213. Trustee's Compensation Not Prejudiced.......... 98
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article....................... 98
SECTION 1302. Satisfaction of Sinking Fund Payments with
Securities.................................. 99
SECTION 1303. Redemption of Securities for Sinking Fund...... 99
ARTICLE FOURTEEN
REPAYMENT AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article....................... 100
SECTION 1402. Repayment of Securities........................ 101
SECTION 1403. Exercise of Option............................. 101
SECTION 1404. When Securities Presented for Repayment Become
Due and Payable............................. 102
SECTION 1405. Securities Repaid in Part...................... 103
ARTICLE FIFTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1501. Company's Option to Effect Defeasance or
Covenant Defeasance......................... 103
SECTION 1502. Defeasance and Discharge....................... 103
SECTION 1503. Covenant Defeasance............................ 104
SECTION 1504. Conditions to Defeasance or Covenant Defeasance 104
SECTION 1505. Deposited Money and Government Obligations to
Be Held in Trust; Other Miscellaneous
Provisions.................................. 107
SECTION 1506. Reinstatement.................................. 108
ARTICLE SIXTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1601. Purposes for Which Meetings May Be Called...... 108
SECTION 1602. Call, Notice and Place of Meetings............. 108
SECTION 1603. Persons Entitled to Vote at Meetings........... 109
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Page
SECTION 1604. Quorum; Action................................. 109
SECTION 1605. Determination of Voting Rights; Conduct and
Adjournment of Meetings..................... 111
SECTION 1606. Counting Votes and Recording Action of Meetings 112
TESTIMONIUM.................................................... 113
SIGNATURES AND SEALS........................................... 113
EXHIBIT A -- List of Restricted Subsidiaries
EXHIBIT B-1 -- Form of Certificate to Be Given by Person Entitled to
Receive Bearer Security or to Obtain Interest Payable Prior
to the Exchange Date
EXHIBIT B-2 -- Form of Certificate to Be Given by Euroclear and Cedel S.A.
in Connection with the Exchange of a Portion of a Temporary
Global Security or to Obtain Interest Payable Prior to the
Exchange Date
<PAGE>
INDENTURE, dated as of October __, 1995 between Cablevision Systems
Corporation, a Delaware corporation (herein called the "Company"), and The Bank
of New York, a New York banking corporation, as trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated debt
securities (herein called the "Securities"), which may be convertible into or
exchangeable for any securities of the Company, to be issued in one or more
series as in this Indenture provided.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are required to be part of this Indenture and shall, to
the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the Trust
Indenture Act;
<PAGE>
2
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Annualized Operating Cash Flow" means, for any period of three
complete consecutive calendar months, an amount equal to Operating Cash Flow for
such period multiplied by four.
"Authenticating Agent" means any Person appointed by the Trustee to
act on behalf of the Trustee pursuant to Section 611 to authenticate Securities.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in each place in connection with which the term is
used or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same city
meeting the foregoing requirements and in each case on any Business Day.
"Bank Credit Agreement" means the Fourth Amended and Restated Credit
Agreement, dated as of October 14, 1994, among the Company, the Restricted
Subsidiaries party thereto, the banks party thereto, Toronto Dominion (Texas),
Inc. as agent for the
<PAGE>
3
Banks, and Bank of Montreal, Chicago Branch, The Bank of New York, The Bank of
Nova Scotia, The Canadian Imperial Bank of Commerce and NationsBank of Texas,
N.A., as co-agents for the Banks, as amended by Amendment No. 1 thereto, as in
effect on the date hereof and as such agreement may be amended from time to
time.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Banks" means the lenders from time to time who are parties to the
Bank Credit Agreement.
"Bearer Security" means any Security except a Registered Security.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock whether now outstanding or issued after the date of this
Indenture, including, without limitation, all Common Stock and Preferred Stock.
"Capitalized Lease Obligation" means any obligation of a Person to pay
rent or other amounts under a lease with respect to any property (whether real,
personal or mixed) acquired or leased by such Person and used in its business
that is required to be accounted for as a liability on the balance sheet of such
Person in accordance with generally accepted accounting principles, and the
amount of such Capitalized Lease Obligation shall be the amount so required to
be accounted for as a liability.
"Cash Flow Ratio" means, as at any date, the ratio of (i) the sum of
the aggregate outstanding principal amount of all Indebtedness of the Company
and the
<PAGE>
4
Restricted Subsidiaries determined on a consolidated basis but excluding all
Interest Swap Obligations entered into by the Company or any Restricted
Subsidiary and one of the Banks outstanding on such date plus (but without
duplication of Indebtedness supported by Letters of Credit) the aggregate
undrawn face amount of all Letters of Credit outstanding on such date to (ii)
Annualized Operating Cash Flow determined as at the last day of the most recent
month for which financial information is available.
"CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres, S.A.,
or its successor.
"Class A Common Stock" means the Class A Common Stock, par value $.01
per share, of the Company.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Common Stock" means, with respect to any Person, any and all shares,
interests and participations (however designated and whether voting or non-
voting) in such Person's common equity, whether now outstanding or issued after
the date of this Indenture, and includes, without limitation, all series and
classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company (i) by its Chairman, a Vice Chairman, its
President or a Vice President and (ii) by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary and delivered to the Trustee; provided,
--------
however, that such written request or order may be signed by any two of the
- -------
officers or directors listed in clause (i) above in lieu of being signed by one
of such officers or directors listed in such clause (i) and one of the officers
listed in clause (ii) above.
"Conversion Date" has the meaning specified in Section 312(d).
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such Currency and by
a central bank or other
<PAGE>
5
public institution of or within the international banking community for the
settlement of transactions, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office on the date of execution of this Indenture is located
at 101 Barclay Street, 21st Floor, New York, New York 10286.
"corporation" includes corporations, associations, companies and
business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"covenant defeasance" has the meaning specified in Section 1503
hereof.
"Cumulative Cash Flow Credit" means the sum of
(a) cumulative Operating Cash Flow during the period commencing on
July 1, 1988 and ending on the last day of the most recent month preceding
the date of the proposed Restricted Payment for which financial information
is available or, if cumulative Operating Cash Flow for such period is
negative, minus the amount by which cumulative Operating Cash Flow is less
than zero, plus
(b) the aggregate net proceeds received by the Company from the issue
or sale (other than to a Restricted Subsidiary) of its capital stock (other
than Disqualified Stock) on or after January 1, 1992, plus
(c) the aggregate net proceeds received by the Company from the
issuance or sale (other than to a Restricted Subsidiary) of its capital
stock (other than Disqualified Stock) on or after January 1, 1992, upon the
conversion of, or exchange for, Indebtedness of the Company or any
Restricted Subsidiary or from the exercise of any options, warrants or
other rights to acquire capital stock of the Company.
For purposes of this definition, the net proceeds in property other than cash
received by the Company as contemplated by clauses (b) and (c) above shall be
valued at the fair market value of such property (as determined by the Board of
Directors of the Company, whose good faith determination shall be conclusive) at
the date of receipt by the Company.
<PAGE>
6
"Cumulative Interest Expense" means, for the period commencing on July
1, 1988 and ending on the last day of the most recent month preceding the
proposed Restricted Payment for which financial information is available, the
aggregate of the interest expense of the Company and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles, including interest expense attributable to
Capitalized Lease Obligations.
"Currency" means any currency or currencies, composite currency or
currency unit or currency units, including, without limitation, the ECU, issued
by the government of one or more countries or by any recognized confederation or
association of such governments.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar officer under any Bankruptcy Law.
"Debt" with respect to any Person means, without duplication, any
liability, whether or not contingent, (i) in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereto), but excluding
reimbursement obligations under any surety bond, (ii) representing the balance
deferred and unpaid of the purchase price of any property (including pursuant to
Capitalized Lease Obligations), except any such balance that constitutes a trade
payable, (iii) under Interest Swap Agreements (as defined in the Bank Credit
Agreement) entered into pursuant to the Bank Credit Agreement, (iv) under any
other agreement related to the fixing of interest rates on any Indebtedness,
such as an interest swap, cap or collar agreement (if and to the extent any of
the foregoing liabilities would appear as a liability upon a balance sheet of
such Person prepared on a consolidated basis in accordance with generally
accepted accounting principles) or (v) guarantees of items of other Persons
which would be included within this definition for such other Persons (whether
or not the guarantee would appear on such balance sheet).
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307 hereof.
"Default Notice" has the meaning specified in Section 1202 hereof.
"defeasance" has the meaning specified in Section 1502 hereof.
"Disqualified Stock" means any Capital Stock of the Company or any
Restricted Subsidiary of the Company which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any
<PAGE>
7
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the maturity date of the Securities.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 312(g).
"Dollar Equivalent of the Foreign Currency" has the meaning specified
in Section 312(f).
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 312(h).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate Agent" means, with respect to Securities of or within
any series, unless otherwise specified with respect to any Securities pursuant
to Section 301, a New York Clearing House bank, designated pursuant to Section
301 or Section 313.
"Exchange Rate Officers' Certificate" means a tested telex or a
certificate setting forth (i) the applicable Market Exchange Rate and (ii) the
Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount determined in accordance with Section
302 in the relevant Currency), payable with respect to a Security of
<PAGE>
8
any series on the basis of such Market Exchange Rate, sent (in the case of a
telex) or signed (in the case of a certificate) by the Chairman, a Vice
Chairman, the President, a Vice President or the Treasurer of the Company.
"Foreign Currency" means any Currency other than Currency of the
United States.
"Government Obligations" means, unless otherwise specified with
respect to any series of Securities pursuant to Section 301, securities which
are (i) direct obligations of the government which issued the Currency in which
the Securities of a particular series are payable or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the government which issued the Currency in which the Securities of such series
are payable, the payment of which is unconditionally guaranteed by such
government, which, in either case, are full faith and credit obligations of such
government payable in such Currency and are not callable or redeemable at the
option of the issuer thereof and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
--------
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest or principal of
the Government Obligation evidenced by such depository receipt.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation or (ii) an agreement, direct or indirect, contingent or
otherwise, providing assurance of the payment or performance (or payment of
damages in the event of non-performance) of any part or all of such obligation,
including, without limiting the foregoing, the payment of amounts drawn down by
letters of credit. Notwithstanding anything herein to the contrary, a guarantee
shall not include any agreement solely because such agreement creates a Lien on
the assets of any Person. The amount of a guarantee shall be deemed to be the
maximum amount of the obligation guaranteed for which the guarantor could be
held liable under such guarantee.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indebtedness" with respect to any Person, means the Debt of such
Person; provided, however, that, with respect to the Company, the "Minimum
-------- -------
Payment" or the "Preferred Payment" (each a "Cablevision of NYC Payment")
payable by a Subsidiary and
<PAGE>
9
guaranteed by the Company as a result of the acquisition of Cablevision of NYC
(the "Cablevision of NYC Acquisition") shall not be deemed to be "Indebtedness"
so long as the Company and such Subsidiary are permitted to make such
Cablevision of NYC Payment in one or more classes of the Company's Capital Stock
(other than Disqualified Stock) pursuant to the terms of the Cablevision of NYC
Acquisition agreement and the Company and the Restricted Subsidiaries are
prohibited from making such Cablevision of NYC Payment in cash, debt securities,
Disqualified Stock or any combination thereof pursuant to the terms of any
mortgage, indenture, credit agreement or other instrument that secures or
evidences Indebtedness for money borrowed or guaranteed by the Company or a
Restricted Subsidiary in an aggregate amount of $10,000,000 or more; provided
--------
that, for purposes of the definition of "Indebtedness" (including the term
"Debt" to the extent incorporated in such definition) and for purposes of the
definition of Event of Default, the term "guarantee" shall not be interpreted to
extend to a guarantee under which recourse is limited to the Capital Stock of an
entity that is not a Restricted Subsidiary.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
-------- -------
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity at the rate prescribed in such Original Issue Discount
Security.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
<PAGE>
10
"Interest Swap Obligations" means, with respect to any Person, the
obligations of such Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a floating or a fixed rate
of interest on a stated notional amount in exchange for periodic payments made
by such Person calculated by applying a fixed or a floating rate of interest on
the same notional amount.
"Investment" means any advance, loan, account receivable (other than
an account receivable arising in the ordinary course of business) or other
extension of credit (excluding, however, accrued and unpaid interest in respect
of any advance, loan or other extension of credit) or any capital contribution
to (by means of transfers of property to others, or payments for property or
services for the account or use of others, or otherwise), any purchase or
ownership of any stocks, bonds, notes, debentures or other securities
(including, without limitation, any interests in any partnership, joint venture
or joint adventure) of, or any bank accounts with or guarantee of any
Indebtedness or other obligations of, any Unrestricted Subsidiary or Affiliate
that is not a subsidiary of the Company; provided that (i) the term "Investment"
--------
shall not include any transaction that would otherwise constitute an Investment
of the Company or a Subsidiary to the extent that the consideration provided by
the Company or such Subsidiary in connection therewith shall consist of Capital
Stock of the Company (other than Disqualified Stock) and (ii) the term
"guarantee" shall not be interpreted to extend to a guarantee under which
recourse is limited to the Capital Stock of an entity that is not a Restricted
Subsidiary.
"Junior Securities" means securities of the Company as reorganized or
readjusted or securities of the Company or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, junior or
the payment of which is otherwise subordinate, at least to the extent provided
in Article Twelve hereof, to the payment of all Senior Indebtedness at the time
outstanding, and to the payment of all securities issued in exchange therefor,
to the holders of the Senior Indebtedness at the time outstanding.
"Lien" means any lien, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature of a security interest and any agreement to give any
security interest).
"Market Exchange Rate" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 301 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon (New York City time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for customs
purposes by the Federal Reserve Bank of New York and (iii) for any conversion of
<PAGE>
11
one Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion is
being made from major banks located in either New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Exchange Rate Agent. Unless otherwise specified with respect
to any Securities pursuant to Section 301, in the event of the unavailability of
any of the exchange rates provided for in the foregoing clauses (i), (ii) and
(iii), the Exchange Rate Agent shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York as
of the most recent available date, or quotations from one or more major banks in
New York City, London or another principal market for the Currency in question,
or such other quotations as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate Agent, if there is more than one
market for dealing in any Currency by reason of foreign exchange regulations or
otherwise, the market to be used in respect of such Currency shall be that upon
which a non-resident issuer of securities designated in such Currency would
purchase such Currency in order to make payments in respect of such securities.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the President, a Vice President or the Treasurer of
the Company and (ii) the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee; provided, however, that such certificate may be signed
-------- -------
by two of the officers or directors listed in clause (i) above in lieu of being
signed by one of such officers or directors listed in such clause (i) and one of
the officers listed in clause (ii) above.
"Operating Cash Flow" means, for any period, the sum of the following
for the Company and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with generally accepted accounting principles
(except for the amortization of deferred installation income which shall be
excluded from the calculation of Operating Cash Flow for all purposes of this
Indenture): (i) aggregate operating revenues minus (ii) aggregate operating
-----
expenses (including technical, programming, sales, selling, general and
administrative expenses and salaries and other compensation, net of amounts
allocated to Affiliates, paid to any general partner, director, officer or
employee of the Company or any Restricted Subsidiary, but excluding interest,
depreciation and amortization and the amount of non-cash compensation in respect
of the Company's employee incentive stock programs for such period (not to
exceed in the aggregate for any calendar year 7% of the Operating Cash Flow for
the previous calendar year) and, to the extent otherwise included in operating
<PAGE>
12
expenses, any losses resulting from a writeoff or writedown of Investments by
the Company or any Restricted Subsidiary in Affiliates). For purposes of
determining Operating Cash Flow, there shall be excluded all management fees
until actually paid to the Company or any Restricted Subsidiary in cash.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in Trust Indenture Act Section
314(e) to the extent applicable.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
------
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; provided that, if such
--------
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1502 and
1503, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fifteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
<PAGE>
13
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined as of the date such Security is originally
issued by the Company as set forth in an Exchange Rate Officers' Certificate
delivered to the Trustee, of the principal amount (or, in the case of an
Original Issue Discount Security, the Dollar equivalent as of such date of
original issuance of the amount determined as provided in clause (i) above) of
such Security, (iii) the principal amount of any Indexed Security that may be
counted in making such determination or calculation and that shall be deemed
outstanding for such purpose shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise provided with respect to
such Security pursuant to Section 301, and (iv) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (or premium, if
any) or interest, if any, on any Securities on behalf of the Company.
"Permitted Restricted Payment" means the payment or declaration of any
dividend by the Company or the making by the Company of any other distribution
or the consummation of an exchange offer, or any combination of the foregoing,
which results in all or a portion of the Capital Stock of RPH being held by all
or any portion of the shareholders of the Company (an "RPH Transaction"), it
being understood that (i) if the Company and its Subsidiaries, after the date of
this Indenture and prior to the date of an RPH Transaction, make Investments in
RPH (in cash or assets) aggregating not more than $15,000,000, then such RPH
Transaction shall continue to constitute a "Permitted Restricted
<PAGE>
14
Payment" and (ii) if the Company or any Subsidiary makes an Investment in RPH,
after the date of this Indenture and prior to the date of such RPH Transaction,
that is not permitted by the foregoing clause (i), then such RPH Transaction
shall not constitute a "Permitted Restricted Payment". For purposes of the
foregoing, the value of any Investment of assets in RPH shall be based upon the
fair market value thereof as determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium,
if any) and interest, if any, on such Securities are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock, whether now outstanding or issued
after the date of this Indenture, and includes, without limitation, all classes
and series of preferred or preference stock.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"redesignation of a Restricted Subsidiary" has the meaning specified
in Section 1010 hereof.
"Registered Security" means any Security registered in the Security
Register.
<PAGE>
15
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment pursuant
to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above-designated officers or assigned
by the Trustee to administer corporate trust matters at its Corporate Trust
Office, and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Payment" means
(a) any Stock Payment by the Company or a Restricted Subsidiary; or
(b) any direct or indirect payment to redeem, repurchase, defease or
otherwise acquire or retire for value, or permit any Restricted Subsidiary
to redeem, repurchase, defease or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Company that is subordinate in right
of payment to the Securities.
Notwithstanding the foregoing, Restricted Payments shall not include (x)
payments by any Restricted Subsidiary to the Company or any other Restricted
Subsidiary or (y) any Investment or designation of a Restricted Subsidiary as an
Unrestricted Subsidiary permitted under Section 1010.
"Restricted Subsidiary" means any Subsidiary, whether existing on the
date hereof or created subsequent hereto, designated from time to time by the
Company as a "Restricted Subsidiary" and the initial Restricted Subsidiaries
designated by the Company are set forth on Exhibit A hereto; provided, however,
-------- -------
that no subsidiary can be or remain so designated unless (i) at least 67% of
each of the total equity interest and the voting control of
<PAGE>
16
such Subsidiary is owned, directly or indirectly, by the Company or another
Restricted Subsidiary and (ii) such Subsidiary is not restricted, pursuant to
the terms of any loan agreement, note, indenture or other evidence of
indebtedness, from (a) paying dividends or making any distribution on such
Subsidiary's capital stock or other equity securities or paying any Indebtedness
owed to the Company or to any Restricted Subsidiary of the Company, (b) making
any loans or advances to the Company or any Restricted Subsidiary of the Company
or (c) transferring any of its properties or assets to the Company or any
Restricted Subsidiary (it being understood that a financial covenant any of the
components of which are directly impacted by the taking of the action (e.g., the
----
payment of a dividend) itself (such as a minimum net worth test) would be deemed
to be a restriction on the foregoing actions, while a financial covenant none of
the components of which are directly impacted by the taking of the action (e.g.,
----
the payment of a dividend) itself (such as a debt to cash flow test) would not
be deemed to be a restriction on the foregoing actions); and provided further
-------- -------
that the Company may, from time to time, redesignate any Restricted Subsidiary
as an Unrestricted Subsidiary in accordance with Section 1010 of this Indenture.
"RPH" means Rainbow Programming Holdings, Inc., a New York
corporation, or such other entity holding only assets that were held by Rainbow
Programming Holdings, Inc. immediately prior to their acquisition by such
entity.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture; provided, however, that if at any time there is more than
-------- -------
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means, with respect to the Securities of any
series, the principal, premium, if any, interest (including post-petition
interest in any proceeding under any Bankruptcy Law, whether or not such
interest is an allowed claim enforceable against the debtor in a proceeding
under such Bankruptcy Law), penalties, fees and other liabilities payable with
respect to (i) all Debt of the Company, other than the Securities of such series
and the Company's 9-7/8% Senior Subordinated Debentures due 2013, 10-3/4% Senior
Subordinated Debentures due 2004 and 9-7/8% Senior Subordinated Debentures due
2023 (with which the Securities of such series are intended to rank on a
parity), whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed, which is (x) for money borrowed, (y) evidenced by
a note or similar instrument given in connection with the acquisition of any
businesses, properties or assets of any kind or (z) in respect of
<PAGE>
17
any Capitalized Lease Obligations and (ii) all renewals, extensions, refundings,
increases or refinancings thereof, unless, in the case of (i) or (ii) above, the
instrument under which the Debt is created, incurred, assumed or guaranteed
expressly provides that such Debt is not senior in right of payment to the
Securities of any series. Notwithstanding anything to the contrary contained
herein, "Senior Indebtedness" shall mean and include all amounts of Senior
Indebtedness that is such by virtue of clause (i) or (ii) of the foregoing
definition that are repaid by the Company and subsequently recovered from the
holder of such Senior Indebtedness under any applicable Bankruptcy Laws or
otherwise (other than by reason of some wrongful conduct on the part of the
holders of such Debt).
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of Section 308.
"Stock Payment" means, with respect to any Person, the payment or
declaration of any dividend, either in cash or in property (except dividends
payable in common stock or common shares of capital stock of such Person), or
the making by such Person of any other distribution, on account of any shares of
any class of its capital stock, now or hereafter outstanding, or the redemption,
purchase, retirement or other acquisition for value by such Person, directly or
indirectly, of any shares of any class of its capital stock, now or hereafter
outstanding.
"subsidiary" means, as to a particular parent entity at any time, any
entity of which more than 50% of the outstanding Voting Stock or other equity
interest entitled ordinarily to vote in the election of the directors or other
governing body (however designated) of such entity is at the time beneficially
owned or controlled directly or indirectly by such parent corporation, by one or
more such entities or by such parent corporation and one or more such entities.
"Subsidiary" means any subsidiary of the Company.
"successor" shall have the meaning set forth in Section 801 hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
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18
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
- -------- -------
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Valuation Date" has the meaning specified in Section 312(c).
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means any Capital Stock having voting power under
ordinary circumstances to vote in the election of a majority of the board of
directors of a corporation (irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by reason of
the happening of any contingency).
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent)
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19
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 1013) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such covenant or condition has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel
<PAGE>
20
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of such series may, alternatively, be embodied in and evidenced by the
record of Holders of Securities of such series voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of Holders of
Securities of such series duly called and held in accordance with the provisions
of Article Sixteen, or a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments or so voting at any such meeting.
Proof of execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall be sufficient for
any purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1606.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
<PAGE>
21
(c) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and
serial numbers of Bearer Securities held by any Person, and the date of holding
the same, may also be proved in any other manner that the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
- --------
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be
<PAGE>
22
done by the Trustee or the Company in reliance thereon, whether or not notation
of such action is made upon such Security.
SECTION 105. Notices, Etc. to Trustee and Company.
------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice to Holders of Bearer Securities given as provided. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impractical to mail
notice of any event to Holders of Registered Securities when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be sufficient giving of such notice for every purpose hereunder.
<PAGE>
23
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given to Holders of Bearer Securities if published in an
Authorized Newspaper in The City of New York and in such other city or cities as
may be specified in such Securities on a Business Day at least twice, the first
such publication to be not earlier than the earliest date, and not later than
the latest date, prescribed for the giving of such notice. Any such notice
shall be deemed to have been given on the date of the first such publication.
In case, by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause, it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of such notice with
respect to other Holders of Bearer Securities or the sufficiency of any notice
to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
<PAGE>
24
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Securities Registrar and their
successors hereunder and the Holders of Securities or coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
-------------
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the State of New York, without regard to
conflicts of laws principles. This Indenture is subject to the provisions of
the Trust Indenture Act that are required to be part of this Indenture and
shall, to the extent applicable, be governed by such provisions.
SECTION 112. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date or Stated Maturity or Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of this Indenture or of any Security or coupon other than a provision in the
Securities of any series which specifically states that such provision shall
apply in lieu of this Section), payment of principal (or premium, if any) or
interest, if any, need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or Redemption
Date or sinking fund payment date, or at the Stated Maturity or Maturity;
provided that no interest shall accrue for the period from and after such
- --------
Interest Payment Date, Redemption Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be.
<PAGE>
25
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
---------------
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in substantially
the forms as shall be established by or pursuant to a Board Resolution or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or coupons, as evidenced by their execution of the Securities or coupons. If
the forms of Securities or coupons of any series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities or coupons. Any portion of the text of any Security may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of the
Security.
Unless otherwise specified as contemplated by Section 301, Securities
in bearer form shall have interest coupons attached.
The Trustee's certificate of authentication on all Securities shall be
in substantially the form set forth in this Article.
The definitive Securities and coupons shall be printed, lithographed
or engraved on steel-engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
<PAGE>
26
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: ____________________
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By ____________________________
Authorized Signatory
SECTION 203. Securities Issuable in Global Form.
----------------------------------
If Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding clause (8) of
Section 301, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 303
or Section 304. Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or Section 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
<PAGE>
27
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of (and premium,
if any) and interest, if any, on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 309 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL S.A.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth in, or
determined in the manner provided in, an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (17) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series and set forth in such Securities of the series
when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1405);
<PAGE>
28
(3) the Person to whom any interest on the Securities of any series is
payable if other than the Person in whose name the Securities of such
series are registered on the Regular Record Date;
(4) the date or dates, or the method by which such date or dates will
be determined or extended, on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue, or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on any Registered Security on
any Interest Payment Date, or the method by which such date or dates shall
be determined, and the basis upon which interest shall be calculated if
other than on the basis of a 360-day year of twelve 30-day months;
(6) the place or places, if any, other than or in addition to the
Borough of Manhattan, The City of New York, where the principal of (and
premium, if any) and interest, if any, on Securities of the series shall be
payable, where any Registered Securities of the series may be surrendered
for registration of transfer, where Securities of the series may be
surrendered for exchange, where Securities of the series that are
convertible or exchangeable may be surrendered for conversion or exchange,
as applicable and, if different than the location specified in Section 106,
the place or places where notices or demands to or upon the Company in
respect of the Securities of the series and this Indenture may be served;
(7) the period or periods within which, the events upon the occurrence
of which, the price or prices at which, the Currency in which, and other
terms and conditions upon which Securities of the series may be redeemed or
purchased, in whole or in part, at the option of the Company, if the
Company is to have that option;
(8) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which, the price or prices at which, the Currency in which, and
other terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denomination or denominations in which any Registered
Securities of the series
<PAGE>
29
shall be issuable and, if other than denominations of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable;
(10) whether the amount of payments of principal of (or premium, if
any) or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method (which index, formula
or method may be based, without limitation, on one or more Currencies,
commodities, equity indices or other indices), and the manner in which such
amounts shall be determined;
(11) if other than Dollars, the Currency in which payment of the
principal of (or premium, if any) or interest, if any, on the Securities of
the series shall be payable or in which the Securities of the series shall
be denominated and the particular provisions applicable thereto in
accordance with, in addition to or in lieu of any of the provisions of
Section 312;
(12) whether the principal of (or premium, if any) or interest, if
any, on the Securities of the series are to be payable, at the election of
the Company or a Holder thereof, in a Currency other than that in which
such Securities are denominated or stated to be payable, the period or
periods within which (including the Election Date), and the terms and
conditions upon which, such election may be made, and the time and manner
of determining the exchange rate between the Currency in which such
Securities are denominated or stated to be payable and the Currency in
which such Securities are to be so payable, in each case in accordance
with, in addition to or in lieu of any of the provisions of Section 312;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the method by which such portion shall be determined;
(14) if the principal amount of the Securities of the series payable
at the Maturity thereof is not determinable as of any date prior to such
Maturity, the amount which shall be deemed to be the Outstanding principal
amount of the Securities of such series;
(15) the applicability, if any, of Sections 1502 and/or 1503 to the
Securities of the series and any provisions in modification of, in addition
to or in lieu of any of the provisions of Article Fifteen that shall be
applicable to the Securities of the series;
(16) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer
Securities, whether any Securities of
<PAGE>
30
the series are to be issuable initially in temporary global form and
whether any Securities of the series are to be issuable in permanent global
form with or without coupons and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such interests
for Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, whether
Registered Securities of the series may be exchanged for Bearer Securities
of the series (if permitted by applicable laws and regulations), whether
Bearer Securities of the series may be exchanged for Registered Securities
of such series, and the circumstances under which and the place or places
where any such exchanges may be made and if Securities of the series are to
be issuable in global form, the identity of any initial depository
therefor;
(17) any deletions from, modifications of or additions to the Events
of Default of the Company with respect to Securities of the series, whether
or not such Events of Default are consistent with the Events of Default set
forth herein;
(18) any deletions from, modifications of or additions to the
covenants (including any deletions from, modifications of or additions to
Section 1014) of the Company with respect to Securities of the series,
whether or not such covenants are consistent with the covenants set forth
herein;
(19) if the Securities of the series are to be convertible into or
exchangeable into Class A Common Stock or other securities of the Company,
the terms and conditions upon which such Securities will be so convertible
or exchangeable; and
(20) if the Securities of the series are to be secured; and
(21) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to the series (which
terms shall not be inconsistent with the requirements of the Trust
Indenture Act or the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. Not all Securities of any one series need be issued at the same time,
and, unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series.
<PAGE>
31
If any of the terms of the series are established by action taken
pursuant to one or more Board Resolutions, such Board Resolutions shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
-------------
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. With respect to
Securities of any series denominated in Dollars, in the absence of any such
provisions, the Registered Securities of such series, other than Registered
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $1,000 and any integral multiple thereof and the
Bearer Securities of such series, other than the Bearer Securities issued in
global form (which may be of any denomination), shall be issuable in a
denomination of $5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities and any coupons appertaining thereto shall be executed
on behalf of the Company by its Chairman, a Vice Chairman, its President or a
Vice President, under its corporate seal reproduced thereon attested by its
Secretary or an Assistant Secretary. The signature of any of these officers on
the Securities or coupons may be the manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities; provided, however, that,
-------- -------
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
-------- -------
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate in the form set forth in Exhibit B-1
to this Indenture, dated no earlier than 15 days prior to the earlier of the
date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such
<PAGE>
32
temporary Security and this Indenture. If any Security shall be represented by
a permanent global Bearer Security, then, for purposes of this Section and
Section 304, the notation of a beneficial owner's interest therein upon original
issuance of such Security or upon exchange of a portion of a temporary global
Security shall be deemed to be delivery in connection with its original issuance
of such beneficial owner's interest in such permanent global Security. Except
as permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled. If not all the Securities of any series are to be
issued at one time and if the Board Resolution or supplemental indenture
establishing such series shall so permit, such Company Order may set forth
procedures acceptable to the Trustee for the issuance of such Securities and
determining terms of particular Securities of such series such as interest rate,
stated maturity, date of issuance and date from which interest shall accrue.
In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to TIA Sections 315(a)
through 315(d)) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) that the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) that the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(c) that such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights, to general equitable principles and to such other qualifications as
such counsel shall conclude do not materially affect the rights of Holders
of such Securities and any coupons;
(d) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities, any coupons and of the
supplemental indentures, if any, have been complied with and that
authentication and delivery of such Securities and any coupons and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms of the Indenture;
<PAGE>
33
(e) that the Company has the corporate power to issue such Securities
and any coupons, and has duly taken all necessary corporate action with
respect to such issuance; and
(f) that the issuance of such Securities and any coupons will not
contravene the articles of incorporation or by-laws of the Company or
result in any violation of any of the terms or provisions of any law or
regulation or of any indenture, mortgage or other agreement known to such
Counsel by which the Company is bound.
Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if not all the Securities of any series are to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to the preceding two paragraphs prior to or at the
time of issuance of each Security, but such documents shall be delivered prior
to or at the time of issuance of the first Security of such series.
The Trustee shall not be required to authenticate and deliver any such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in
Section 310 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
<PAGE>
34
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as conclusively the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities. Such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured coupons appertaining thereto), the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations; provided, however, that no definitive Bearer Security
-------- -------
shall be delivered in exchange for a temporary Registered Security; and provided
--------
further that a definitive Bearer Security shall be delivered in exchange for a
- -------
temporary Bearer Security only in compliance with the conditions set forth in
Section 303. Until so exchanged the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL S.A., for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such
<PAGE>
35
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities without charge and the Trustee shall authenticate and deliver, in
exchange for each portion of such temporary global Security, an equal aggregate
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such temporary global Security
to be exchanged. The definitive Securities to be delivered in exchange for any
such temporary global Security shall be in bearer form, registered form,
permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified in such temporary
-------- -------
global Security, upon such presentation by the Common Depositary, such temporary
global Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL S.A. as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit B-2 to this Indenture (or in
such other form as may be established pursuant to Section 301); and provided
--------
further that definitive Bearer Securities shall be delivered in exchange for a
- -------
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL S.A., as the case may be, to request such exchange on his
behalf and delivers to Euroclear or CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit B-1 to this Indenture (or in such
other form as may be established pursuant to Section 301), dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and CEDEL S.A., the Trustee, any
Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary global Security, any such
exchange shall be made free of charge to the beneficial owners of such temporary
global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like in the event that
such Person does not take delivery of such definitive Securities in person at
the offices of Euroclear or CEDEL S.A. Definitive Securities in bearer form to
be delivered in exchange for any portion of a temporary global Security shall be
delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such
<PAGE>
36
series occurring prior to the applicable Exchange Date shall be payable to
Euroclear and CEDEL S.A. on such Interest Payment Date upon delivery by
Euroclear and CEDEL S.A. to the Trustee of a certificate or certificates in the
form set forth in Exhibit B-2 to this Indenture (or in such other form as may be
established pursuant to Section 301), for credit without further interest
thereon on or after such Interest Payment Date to the respective accounts of the
Persons who are the beneficial owners of such temporary global Security on such
Interest Payment Date and who have each delivered to Euroclear or CEDEL S.A., as
the case may be, a certificate dated no earlier than 15 days prior to the
Interest Payment Date occurring prior to such Exchange Date in the form set
forth in Exhibit B-1 to this Indenture (or in such other form as may be
established pursuant to Section 301). Notwithstanding anything to the contrary
herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs of this
Section and of the third paragraph of Section 303 of this Indenture and the
interests of the Persons who are the beneficial owners of the temporary global
Security with respect to which such certification was made will be exchanged for
definitive Securities of the same series and of like tenor on the Exchange Date
or the date of certification if such date occurs after the Exchange Date,
without further act or deed by such beneficial owners. Except as otherwise
provided in this paragraph, no payments of principal (or premium, if any) or
interest, if any, owing with respect to a beneficial interest in a temporary
global Security will be made unless and until such interest in such temporary
global Security shall have been exchanged for an interest in a definitive
Security. Any interest so received by Euroclear and CEDEL S.A. and not paid as
herein provided shall be returned to the Trustee immediately prior to the
expiration of two years after such Interest Payment Date in order to be repaid
to the Company in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register for each series of Securities (the registers maintained
in the Corporate Trust Office of the Trustee and in any other office or agency
of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Registered Securities and of transfers of Registered Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
the Security Register shall be open to inspection by the Trustee. The Trustee
is hereby initially appointed as security registrar (the "Security Registrar")
for the purpose of registering Registered Securities and transfers of Registered
Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated
<PAGE>
37
transferee, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series, of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Registered Securities to be exchanged at such office or agency. Whenever
any Registered Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified with respect to any series of Securities as contemplated by
Section 301, Bearer Securities may not be issued in exchange for Registered
Securities.
If (but only if) expressly permitted in or pursuant to the applicable
Board Resolution and (subject to Section 303) set forth in the applicable
Officers' Certificate, or in any indenture supplemental hereto, delivered as
contemplated by Section 301, at the option of the Holder, Bearer Securities of
any series may be exchanged for Registered Securities of the same series of any
authorized denomination and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Securities to be exchanged at any such office or agency,
with all unmatured coupons and all matured coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or matured coupon or coupons in default, any such
permitted exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face amount
of such missing coupon or coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there is furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to any Paying Agent any such missing coupon in respect of which such a
payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that, except as otherwise provided in
-------- -------
Section 1002, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
<PAGE>
38
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If any beneficial owner of an interest in a
permanent global Security is entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
deliver to the Trustee definitive Securities in aggregate principal amount equal
to the principal amount of such beneficial owner's interest in such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered by the Common Depositary or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities without charge, and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which, unless the Securities of the
series are not issuable both as Bearer Securities and as Registered Securities,
as specified as contemplated by Section 301, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
-------- -------
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities to be redeemed and ending on the relevant
Redemption Date if the Security for which exchange is requested may be among
those selected for redemption; and provided further that no Bearer Security
-------- -------
delivered in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
<PAGE>
39
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1405 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the selection for redemption of Securities
of that series under Section 1103 or 1303 and ending at the close of business on
(A) if Securities of the series are issuable only as Registered Securities, the
day of the mailing of the relevant notice of redemption and (B) if Securities of
the series are issuable as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if Securities of the series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any Registered Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part, or (iii)
to exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor; provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them and any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding, with coupons corresponding
to the
<PAGE>
40
coupons, if any, appertaining to the surrendered Security, or, in case any such
mutilated Security or coupon has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Security, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security, pay such Security or coupon.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon Company
Order the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security or in exchange for the Security for which a destroyed,
lost or stolen coupon appertains (with all appurtenant coupons not destroyed,
lost or stolen), a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or
stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such mutilated, destroyed, lost or stolen Security or to the
Security to which such mutilated, destroyed, lost or stolen coupon appertains,
pay such Security or coupon; provided, however, that payment of principal of
-------- -------
(and premium, if any) and interest, if any, on Bearer Securities shall, except
as otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen
Security or in exchange for a Security to which a mutilated, destroyed, lost or
stolen coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Security and its coupons, if any, or the mutilated, destroyed, lost or
stolen coupon shall be at any time enforceable by anyone, and shall be entitled
to all the
<PAGE>
41
benefits of this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved; Optional
--------------------------------------------------------
Interest Reset.
- --------------
(a) Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest, if any, on any Registered
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name such Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
-------- -------
that each installment of interest, if any, on any Registered Security may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 309,
to the address of such Person as it appears on the Security Register or (ii)
transfer to an account located in the United States maintained by the payee.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest, if any, may be made, in
the case of a Bearer Security, by transfer to an account located outside the
United States maintained by the payee.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to each of Euroclear and CEDEL S.A. with
respect to that portion of such permanent global Security held for its account
by the Common Depositary, for the purpose of permitting each of Euroclear and
CEDEL S.A. to credit the interest, if any, received by it in respect of such
permanent global Security to the accounts of the beneficial owners thereof.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such defaulted
interest and, if applicable, interest on such defaulted interest (to the extent
lawful) at the rate specified in the Securities of such series (such defaulted
interest and, if applicable, interest thereon herein collectively called
"Defaulted Interest") may be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
<PAGE>
42
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money in the Currency in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301
for the Securities of such series and except, if applicable, as provided in
Sections 312(b), 312(d) and 312(e)) equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose name the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
(b) The provisions of this Section 307(b) may be made applicable to
any series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such Section 301).
The interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable) on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an
"Optional Reset Date"). The Company may exercise such option with respect to
such Security by notifying the Trustee of such exercise at least 50 but not more
<PAGE>
43
than 60 days prior to an Optional Reset Date for such Note, which such notice
shall contain such information as may be required by the Trustee to transmit the
Reset Notice as hereinafter defined). Not later than 40 days prior to each
Optional Reset Date, the Trustee shall transmit, in the manner provided for in
Section 106, to the Holder of any such Security a notice (the "Reset Notice")
indicating whether the Company has elected to reset the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if
applicable), and if so (i) such new interest rate (or such new spread or spread
multiplier, if applicable) and (ii) the provisions, if any, for redemption
during the period from such Optional Reset Date to the next Optional Reset Date
or if there is no such next Optional Reset Date, to the Stated Maturity Date of
such Security (each such period a "Subsequent Interest Period"), including the
date or dates on which or the period or periods during which and the price or
prices at which such redemption may occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread
multiplier, if applicable) provided for in the Reset Notice, for the Subsequent
Interest Period by causing the Trustee to transmit, in the manner provided for
in Section 106, notice of such higher interest rate (or such higher spread or
spread multiplier, if applicable) to the Holder of such Security. Such notice
shall be irrevocable. All Securities with respect to which the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) is reset on an Optional Reset Date, and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the next succeeding paragraph,
will bear such higher interest rate (or such higher spread or spread multiplier,
if applicable).
The Holder of any such Security will have the option to elect
repayment by the Company of the principal of such Security on each Optional
Reset Date at a price equal to the principal amount thereof plus interest
accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article
Fourteen for repayment at the option of Holders except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than
35 days prior to such Optional Reset Date and except that, if the Holder has
tendered any Security for repayment pursuant to the Reset Notice, the Holder
may, by written notice to the Trustee, revoke such tender or repayment until the
close of business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or
<PAGE>
44
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Optional Extension of Stated Maturity.
-------------------------------------
The provisions of this Section 308 may be made applicable to any
series of Securities pursuant to Section 301 (with such modifications, additions
or substitutions as may be specified pursuant to such Section 301). The Stated
Maturity of any Security of such series may be extended at the option of the
Company for the period or periods specified on the face of such Security (each
an "Extension Period") up to but not beyond the date (the "Final Maturity") set
forth on the face of such Security. The Company may exercise such option with
respect to any Security by notifying the Trustee of such exercise at least 50
but not more than 60 days prior to the Stated Maturity of such Security in
effect prior to the exercise of such option (the "Original Stated Maturity").
If the Company exercises such option, the Trustee shall transmit, in the manner
provided for in Section 106, to the Holder of such Security not later than 40
days prior to the Original Stated Maturity a notice (the "Extension Notice")
indicating (i) the election of the Company to extend the Stated Maturity, (ii)
the new Stated Maturity, (iii) the interest rate, if any, applicable to the
Extension Period and (iv) the provisions, if any, for redemption during such
Extension Period. Upon the Trustee's transmittal of the Extension Notice, the
Stated Maturity of such Security shall be extended automatically and, except as
modified by the Extension Notice and as described in the next paragraph, such
Security will have the same terms as prior to the transmittal of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of such Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of such Security. Such notice shall be irrevocable.
All Securities with respect to which the Stated Maturity is extended will bear
such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will
have the option to elect repayment of such Security by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity thereof, the Holder
must follow the procedures set forth in Article Fourteen for repayment at the
option of Holders, except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to the Original
Stated Maturity and except that, if the Holder has tendered any Security for
repayment pursuant to an Extension Notice, the Holder may by written notice to
the Trustee revoke such tender for repayment until the close of business on the
tenth day before the Original Stated Maturity.
<PAGE>
45
SECTION 309. Persons Deemed Owners.
---------------------
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and none of the Company, the Trustee or
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupons be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 310. Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any current or future sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities and coupons so delivered to the Trustee shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously
<PAGE>
46
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be disposed of by the Trustee in accordance with its customary procedures,
unless by Company Order the Company shall direct that cancelled Securities be
returned to it.
SECTION 311. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 with
respect to any Securities, interest, if any, on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 312. Currency and Manner of Payments in Respect of
---------------------------------------------
Securities.
(a) With respect to Registered Securities of any series not permitting
the election provided for in paragraph (b) below or the Holders of which have
not made the election provided for in paragraph (b) below, and with respect to
Bearer Securities of any series, except as provided in paragraph (d) below,
payment of the principal of (and premium, if any) and interest, if any, on any
Registered or Bearer Security of such series will be made in the Currency in
which such Registered Security or Bearer Security, as the case may be, is
payable. The provisions of this Section 312 may be modified or superseded with
respect to any Securities pursuant to Section 301.
(b) It may be provided pursuant to Section 301 with respect to
Registered Securities of any series that Holders shall have the option, subject
to paragraphs (d) and (e) below, to receive payments of principal of (or
premium, if any) or interest, if any, on such Registered Securities in any of
the Currencies which may be designated for such election by delivering to the
Trustee a written election with signature guarantees and in the applicable form
established pursuant to Section 301, not later than the close of business on the
Election Date immediately preceding the applicable payment date. If a Holder so
elects to receive such payments in any such Currency, such election will remain
in effect for such Holder or any transferee of such Holder until changed by such
Holder or such transferee by written notice to the Trustee (but any such change
must be made not later than the close of business on the Election Date
immediately preceding the next payment date to be effective for the payment to
be made on such payment date and no such change of election may be made with
respect to payments to be made on any Registered Security of such series with
respect to which an Event of Default has occurred or with respect to which the
Company has deposited funds pursuant to Article Four or Fifteen or with respect
to which a notice of redemption has
<PAGE>
47
been given by the Company or a notice of option to elect repayment has been sent
by such Holder or such transferee). Any Holder of any such Registered Security
who shall not have delivered any such election to the Trustee not later than the
close of business on the applicable Election Date will be paid the amount due on
the applicable payment date in the relevant Currency as provided in Section
312(a). The Trustee shall notify the Exchange Rate Agent as soon as practicable
after the Election Date of the aggregate principal amount of Registered
Securities for which Holders have made such written election.
(c) Unless otherwise specified pursuant to Section 301, if the
election referred to in paragraph (b) above has been provided for pursuant to
Section 301, then, unless otherwise specified pursuant to Section 301, not later
than the fourth Business Day after the Election Date for each payment date for
Registered Securities of any series, the Exchange Rate Agent will deliver to the
Company a written notice specifying, in the Currency in which Registered
Securities of such series are payable, the respective aggregate amounts of
principal of (and premium, if any) and interest, if any, on the Registered
Securities to be paid on such payment date, specifying the amounts in such
Currency so payable in respect of the Registered Securities as to which the
Holders of Registered Securities of such series shall have elected to be paid in
another Currency as provided in paragraph (b) above. If the election referred
to in paragraph (b) above has been provided for pursuant to Section 301 and if
at least one Holder has made such election, then, unless otherwise specified
pursuant to Section 301, on the second Business Day preceding such payment date
the Company will deliver to the Trustee for such series of Registered Securities
an Exchange Rate Officers' Certificate in respect of the Dollar or Foreign
Currency payments to be made on such payment date. Unless otherwise specified
pursuant to Section 301, the Dollar or Foreign Currency amount receivable by
Holders of Registered Securities who have elected payment in a Currency as
provided in paragraph (b) above shall be determined by the Company on the basis
of the applicable Market Exchange Rate in effect on the third Business Day (the
"Valuation Date") immediately preceding each payment date, and such
determination shall be conclusive and binding for all purposes, absent manifest
error.
(d) If a Conversion Event occurs with respect to a Foreign Currency in
which any of the Securities are denominated or payable other than pursuant to an
election provided for pursuant to paragraph (b) above, then with respect to each
date for the payment of principal of (and premium, if any) and interest, if any,
on the applicable Securities denominated or payable in such Foreign Currency
occurring after the last date on which such Foreign Currency was used (the
"Conversion Date"), the Dollar shall be the Currency of payment for use on each
such payment date. Unless otherwise specified pursuant to Section 301, the
Dollar amount to be paid by the Company to the Trustee and by the Trustee or any
Paying Agent to the Holders of such Securities with respect to such payment date
shall be, in the case of a Foreign Currency other than a currency unit, the
Dollar Equivalent of the Foreign Currency or, in the case of a currency unit,
the Dollar Equivalent of the
<PAGE>
48
Currency Unit, in each case as determined by the Exchange Rate Agent in the
manner provided in paragraph (f) or (g) below.
(e) Unless otherwise specified pursuant to Section 301, if the Holder
of a Registered Security denominated in any Currency shall have elected to be
paid in another Currency as provided in paragraph (b) above, and a Conversion
Event occurs with respect to such elected Currency, such Holder shall receive
payment in the Currency in which payment would have been made in the absence of
such election; and if a Conversion Event occurs with respect to the Currency in
which payment would have been made in the absence of such election, such Holder
shall receive payment in Dollars as provided in paragraph (d) above.
(f) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Exchange Rate Agent and shall be obtained for each subsequent
payment date by converting the specified Foreign Currency into Dollars at the
Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined
by the Exchange Rate Agent and subject to the provisions of paragraph (h) below
shall be the sum of each amount obtained by converting the Specified Amount of
each Component Currency into Dollars at the Market Exchange Rate for such
Component Currency on the Valuation Date with respect to each payment.
(h) For purposes of this Section 312 the following terms shall have
the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component currency of the relevant currency unit,
including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which were
represented in the relevant currency unit, including, but not limited to,
the ECU, on the Conversion Date. If after the Conversion Date the official
unit of any Component Currency is altered by way of combination or
subdivision, the Specified Amount of such Component Currency shall be
divided or multiplied in the same proportion. If after the Conversion Date
two or more Component Currencies are consolidated into a single currency,
the respective Specified Amounts of such Component Currencies shall be
replaced by an amount in such single Currency equal to the sum of the
respective Specified Amounts of such consolidated Component Currencies
expressed in such single Currency, and such amount shall thereafter be a
Specified Amount and such single Currency shall thereafter be a Component
Currency. If after the Conversion Date any Component Currency shall be
divided into two or more
<PAGE>
49
currencies, the Specified Amount of such Component Currency shall be
replaced by amounts of such two or more currencies, having an aggregate
Dollar Equivalent value at the Market Exchange Rate on the date of such
replacement equal to the Dollar Equivalent value of the Specified Amount of
such former Component Currency at the Market Exchange Rate immediately
before such division and such amounts shall thereafter be Specified Amounts
and such currencies shall thereafter be Component Currencies. If, after
the Conversion Date of the relevant currency unit, including, but not
limited to, the ECU, a Conversion Event (other than any event referred to
above in this definition of "Specified Amount") occurs with respect to any
Component Currency of such currency unit and is continuing on the
applicable Valuation Date, the Specified Amount of such Component Currency
shall, for purposes of calculating the Dollar Equivalent of the Currency
Unit, be converted into Dollars at the Market Exchange Rate in effect on
the Conversion Date of such Component Currency.
"Election Date" shall mean the date for any series of Registered
Securities as specified pursuant to clause (11) of Section 301 by which the
written election referred to in paragraph (b) above may be made.
All decisions and determinations of the Exchange Rate Agent regarding
the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the
Currency Unit, the Market Exchange Rate and changes in the Specified Amounts as
specified above shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company, the Trustee and all Holders of such Securities denominated or payable
in the relevant Currency. The Exchange Rate Agent shall promptly give written
notice to the Company and the Trustee of any such decision or determination.
In the event that the Company determines in good faith that a
Conversion Event has occurred with respect to a Foreign Currency, the Company
will immediately give written notice thereof to the Trustee and to the Exchange
Rate Agent (and the Trustee will promptly thereafter give notice in the manner
provided for in Section 106 to the affected Holders) specifying the Conversion
Date. In the event the Company so determines that a Conversion Event has
occurred with respect to the ECU or any other currency unit in which Securities
are denominated or payable, the Company will immediately give written notice
thereof to the Trustee and to the Exchange Rate Agent (and the Trustee will
promptly thereafter give notice in the manner provided for in Section 106 to the
affected Holders) specifying the Conversion Date and the Specified Amount of
each Component Currency on the Conversion Date. In the event the Company
determines in good faith that any subsequent change in any Component Currency as
set forth in the definition of Specified Amount above has occurred, the Company
will similarly give written notice to the Trustee and the Exchange Rate Agent.
<PAGE>
50
The Trustee shall be fully justified and protected in relying and
acting upon information received by it from the Company and the Exchange Rate
Agent and shall not otherwise have any duty or obligation to determine the
accuracy or validity of such information independent of the Company or the
Exchange Rate Agent.
SECTION 313. Appointment and Resignation of Successor Exchange Rate
------------------------------------------------------
Agent.
- -----
(a) Unless otherwise specified pursuant to Section 301, if and so long
as the Securities of any series (i) are denominated in a Currency other than
Dollars or (ii) may be payable in a Currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one Exchange Rate Agent. The Company will cause the Exchange Rate
Agent to make the necessary foreign exchange determinations at the time and in
the manner specified pursuant to Section 301 for the purpose of determining the
applicable rate of exchange and, if applicable, for the purpose of converting
the issued Currency into the applicable payment Currency for the payment of
principal (and premium, if any) and interest, if any, pursuant to Section 312.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a written instrument delivered to the Company and the Trustee.
(c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Exchange
Rate Agent for any cause with respect to the Securities of one or more series,
the Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Exchange Rate Agent or Exchange Rate Agents with respect to the
Securities of that or those series (it being understood that any such successor
Exchange Rate Agent may be appointed with respect to the Securities of one or
more or all of such series and that, unless otherwise specified pursuant to
Section 301, at any time there shall only be one Exchange Rate Agent with
respect to the Securities of any particular series that are originally issued by
the Company on the same date and that are initially denominated and/or payable
in the same Currency).
<PAGE>
51
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in such Company
Request (except as to any surviving rights of registration of transfer or
exchange of Securities of such series expressly provided for herein or pursuant
hereto) and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for exchange
for Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender has been waived as provided in Section 1106, and (iv)
Securities and coupons of such series for whose payment money has
theretofore been deposited in trust with the Trustee or any Paying
Agent or segregated and held in trust by the Company and thereafter
repaid to the Company, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory
<PAGE>
52
to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in the Currency in
which the Securities of such series are payable, sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest, if any, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606, the obligations of
the Trustee to any Authenticating Agent under Section 611 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest, if any, for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
<PAGE>
53
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest on any Security of that
series, or any related coupon, when such interest or coupon becomes due and
payable, and continuance of such default for a period of 30 days, whether
or not such payment shall be prohibited by the provisions of Article Twelve
hereof; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity, upon acceleration,
redemption or otherwise, whether or not such payment shall be prohibited by
the provisions of Article Twelve hereof; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of the Securities of that series and Article Thirteen; or
(4) the Company fails to comply with any of its other agreements or
covenants in, or provisions applicable to, the Securities of that series or
this Indenture, and the Default continues for the period and after the
notice, if any, specified below; or
(5) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or one of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or one
of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists or shall be created hereafter (but excluding any Indebtedness for
the deferred purchase price of property or services owed to the Person
providing such property or services as to which the Company or such
Restricted Subsidiary is contesting its obligation to pay the same in good
faith and by proper proceedings and for which the Company or such
Restricted Subsidiary has established appropriate reserves), and (i) either
(A) such event of default results from the failure to pay any such
Indebtedness at final maturity or (B) as a result of such event of default
the maturity of such Indebtedness has been
<PAGE>
54
accelerated prior to its expressed maturity and (ii) the principal amount
of such Indebtedness equals $10,000,000 or more or, together with the
principal amount of any such Indebtedness in default for failure to pay
principal at maturity or the maturity of which has been so accelerated,
aggregates $10,000,000 or more; or
(6) a final judgment or final judgments for the payment of money are
entered by a court of competent jurisdiction against the Company or any
Restricted Subsidiary of the Company and either (i) an enforcement
proceeding shall have been commenced by any creditor upon such judgment or
(ii) such judgment remains undischarged and unbonded for a period (during
which execution shall not be effectively stayed) of 60 days, provided that
--------
the aggregate of all such judgments exceeds $10,000,000; or
(7) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) admits in writing that it generally is unable to pay its
debts as the same become due; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case or
proceeding,
(ii) appoints a Custodian of the Company or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days; or
<PAGE>
55
(9) any other Event of Default provided with respect to Securities of
that series.
A Default under Section 501(4) is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
principal amount of all Outstanding Securities of any series notify the Company
and the Trustee in writing, of the Default, and the Company does not cure the
Default within 60 days (30 days in the case of a Default under Section 801 or
1004) after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." Such
notice to the Company shall be given by the Trustee if so requested in writing
by the Holders of 25% of the principal amount of all the Outstanding Securities
of such series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 501(7) or 501(8)) with respect to the Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of at least 25% in principal amount of the Outstanding Securities
of such series, by written notice to the Company and the agents, if any, under
the Bank Credit Agreement (and to the Trustee if such notice is given by such
Holders), may, and the Trustee at the written request of such Holders shall,
declare all unpaid principal of (or, if the Securities of such series are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal amount as may be specified in the terms of that series), premium, if
any, and accrued interest on all the Outstanding Securities of such series to be
due and payable, as specified below. Upon a declaration of acceleration with
respect to Securities of any series (or of all series, as the case may be), such
principal and accrued interest shall be due and payable upon the first to occur
of an acceleration under the Bank Credit Agreement or 10 days after receipt by
the Company and the agents, if any, under the Bank Credit Agreement of such
written notice given hereunder. If an Event of Default specified in Section
501(7) or 501(8) with respect to the Company occurs, the amounts described above
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. Upon payment
of such principal and interest, all of the Company's obligations under the
Securities of such Series and this Indenture, other than obligations under
Section 606, shall terminate.
The Holders of at least a majority in principal amount of the
Outstanding Securities of any series (or of all series, as the case may be), by
written notice to the Trustee, may rescind an acceleration and its consequences
if (i) all existing Events of Default, other than the non-payment of principal
of, premium, if any, or interest on the Outstanding Securities of such series
(or of all series, as the case may be) and any related coupons which have become
due solely because of the acceleration, have been cured or
<PAGE>
56
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Securities of any series because an Event of
Default specified in Section 501(5) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or the holders
thereof have rescinded their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or rescission, as the case
may be, shall have been given to the Trustee by the Company and countersigned by
the holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of the
Securities of such series, and no other Event of Default has occurred during
such 30-day period which has not been cured or waived during such period.
Notices by the Trustee to the agents under the Bank Credit Agreement
provided for herein shall be delivered or mailed to Toronto Dominion (Texas),
Inc., 909 Fannin Street, Suite 1700, Houston, Texas 77010, Attention: Agency
Department; and to any other person who hereafter becomes an agent under the
Bank Credit Agreement, provided the Trustee has been notified by the Company or
the Banks of the names and mailing addresses of such persons.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Security and any related coupon when such interest becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Securities and coupons, the whole amount then due
and payable on such Securities and coupons for principal (and premium, if any)
and interest, if any, and interest on any overdue principal (and premium, if
any) and on any overdue interest, at the rate or rates prescribed therefor in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
<PAGE>
57
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series (or of
all series, as the case may be) occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series (or of all series, as the case may be) by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any), or such portion of the principal amount of any series of
Original Issue Discount Securities or Indexed Securities as may be
specified in the terms of such series, and interest, if any, owing and
unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such
<PAGE>
58
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, if any, upon presentation of the Securities or coupons, or
both, as the case may be, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
-----
606;
Second: To the payment of the amounts then due and unpaid for
------
principal of (and premium, if any) and interest, if any, on the Securities
and coupons in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities and coupons for
principal (and premium, if any) and interest, if any, respectively; and
Third: The balance, if any, to the Person or Persons entitled
-----
thereto.
<PAGE>
59
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series in the case of any Event of Default
described in clause (1), (2), (3), (4), (5), (6) or (9) of Section 501, or,
in the case of any Event of Default described in clause (7) or (8) of
Section 501, the Holders of not less than 25% in principal amount of all
Outstanding Securities, shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Securities of that series in
the case of any Event of Default described in clause (1), (2), (3), (4),
(5), (6) or (9) of Section 501, or, in the case of any Event of Default
described in clause (7) or (8) of Section 501, by the Holders of a majority
or more in principal amount of all Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Securities of the same series, in the case of any Event of Default
described in clause (1), (2), (3), (4), (5), (6) or (9) of Section 501, or of
Holders of all Securities in the case of any Event of Default described in
clause (7) or (8) of Section 501, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Securities of the same series, in the case of any
Event of Default described in clause (1), (2), (3), (4), (5), (6) or (9) of
Section 501, or of Holders of all Securities in the case of any Event of Default
described in clause (7) or (8) of Section 501.
<PAGE>
60
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Fifteen)
and in such Security, of the principal of (and premium, if any) and (subject to
Section 307) interest, if any, on, such Security or payment of such coupon on
the respective Stated Maturities expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Securities and coupons shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
<PAGE>
61
SECTION 512. Control by Holders.
------------------
With respect to the Securities of any series, the Holders of not less
than a majority in principal amount of the Outstanding Securities of such series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, relating to or arising under clause (1), (2),
(3), (4), (5), (6) or (9) of Section 501, and, with respect to all Securities,
the Holders of not less than a majority in principal amount of all Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, not relating to or arising under
clause (1), (2), (3), (4), (5), (6) or (9) of Section 501, provided that in each
--------
case
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders of Securities
of such series not consenting.
SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Section 502, the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
described in clause (1), (2), (3), (4), (5), (6) or (9) of Section 501 (or, in
the case of a default described in clause (7) or (8) of Section 501, the Holders
of not less than a majority in principal amount of all Outstanding Securities
may waive any such past default), and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if any)
or interest, if any, on any Security or any related coupon, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, any such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this
<PAGE>
62
Indenture; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of Securities of
any series by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on Securities of
any series on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date);
provided that neither this Section 514 nor the Trust Indenture Act shall be
- --------
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
<PAGE>
63
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
-------- -------
of the principal of (or premium, if any) or interest, if any, on any Security of
such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Securities of such series and any related coupons; and provided
--------
further that in the case of any Default of the character specified in Section
- -------
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
SECTION 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and
<PAGE>
64
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
- ----------
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is
<PAGE>
65
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility on Form T-1 supplied to the Company are true
and accurate, subject to the qualifications set forth therein. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or of the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities and coupons
and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 605. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 606. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as shall
be agreed to in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder,
<PAGE>
66
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interest, if any, on particular Securities or any coupons.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(5) or (6), the expenses
(including reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests.
- ---------
(a) There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
(b) The following indentures of the Company shall be deemed to be
specifically described herein for the purposes of clause (i) of the first
proviso contained in TIA Section 310(b): (i) the indenture, dated as of April
1, 1993, for the Company's 10-3/4% Senior Subordinated Debentures due 2004,
(ii) the indenture, dated as of February 15, 1993, for the Company's 9-7/8%
Senior Subordinated Debentures due 2013, (iii) the indenture, dated as of April
1, 1993, for the Company's 9-7/8% Senior Subordinated Debentures due 2023 and
(iv) the indenture dated as of September 26, 1995, for the Company's 11 3/4%
Senior Subordinated Debentures due 2007.
<PAGE>
67
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of not less than a majority in
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 607(a) and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Securities, or (ii) subject to TIA Section 315(e),
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly
<PAGE>
68
appoint a successor Trustee or Trustees with respect to the Securities of that
or those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series). If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security of such series for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to the
Holders of Securities of such series in the manner provided for in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall
<PAGE>
69
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. Whenever
there is a successor Trustee with respect to one or more (but less than all)
series of securities issued pursuant to this Indenture, the terms "Indenture"
and "Securities" shall have the meanings specified in the provisos to the
respective definitions of those terms in Section 101 which contemplate such
situation.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the
<PAGE>
70
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities. In case any of the Securities shall not have
been authenticated by such predecessor Trustee, any successor Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor Trustee. In all such cases such certificates shall
have the full force and effect which this Indenture provides for the certificate
of authentication of the Trustee; provided, however, that the right to adopt the
-------- -------
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 611. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series and the Trustee shall give written notice
of such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, in the manner provided for in
Section 106. Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Any such appointment shall be evidenced
by an instrument in writing signed by a Responsible Officer of the Trustee, and
a copy of such instrument shall be promptly furnished to the Company. Wherever
reference is made in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Section.
<PAGE>
71
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice of
such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, in the manner provided for in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
Dated: ____________________
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By ____________________________
as Authenticating Agent
By ____________________________
Authorized Officer
<PAGE>
72
SECTION 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company or the
Trustee or any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with TIA Section 312, regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under TIA Section
312(b). The Trustee shall be provided by the Company with the names and
addresses of the Holders by the Regular Record Date in respect of the Securities
of the series.
SECTION 702. Reports by Trustee.
------------------
Within 60 days after ______ of each year commencing with the first
______ after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit to the Holders of Securities, in the manner and to the
extent provided in TIA Section 313(c), a brief report dated as of such ________
if required by TIA Section 313(a).
SECTION 703. Reports by Company.
------------------
The Company shall:
(1) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations
<PAGE>
73
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934; or, if the Company is not required to file information, documents or
reports pursuant to either of such Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, in the manner and to the extent provided in TIA Section
313(c), such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, any Person, unless:
(a) the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or disposition shall have been made, is a corporation
organized and existing under the laws of the United States, any state
thereof or the District of Columbia and shall assume by supplemental
indenture hereto all the obligations of the Company under the Securities
and this Indenture;
<PAGE>
74
(b) immediately before and immediately after such transaction, and
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(c) immediately after such transaction, and after giving effect
thereto, the Person formed by or surviving any such consolidation or
merger, or to which such sale, assignment, transfer, lease, conveyance or
disposition shall have been made (the "successor"), shall have a Cash Flow
Ratio not in excess of 9 to 1; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture, if one is required by this
Section 801, comply with this Section 801 and that all conditions precedent
herein provided for relating to such transaction have been complied with.
Cash Flow Ratio for purposes of this Section 801 shall be computed as
if any such successor were the Company.
SECTION 802. Successor Person Substituted.
----------------------------
Upon any consolidation or merger, or any sale, assignment, transfer,
lease or conveyance or other disposition of all or substantially all of the
assets, of the Company in accordance with Section 801, the successor Person
formed by such consolidation or into which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein. When a successor assumes all the
obligations of its predecessor under this Indenture and the Securities and the
coupons, the predecessor will be discharged from those obligations and covenants
under this Indenture and the Securities and the coupons, provided that in the
--------
case of a transfer by lease, the predecessor corporation shall not be discharged
from the payment of principal and interest on the Securities and the coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may
<PAGE>
75
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities and any related coupons (and if
such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form; provided that any such action shall not adversely
--------
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
--------
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 609(b); or
<PAGE>
76
(9) to close this Indenture with respect to the authentication and
delivery of additional series of Securities, to cure any ambiguity, to
correct or supplement any provision herein which may be inconsistent with
any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided such action
--------
shall not adversely affect the interests of the Holders of Securities of
any series and any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1502 and
1503; provided that any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities of any series, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture which affect such series of Securities or of modifying in any
manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall, without
-------- -------
the consent of the Holder of each Outstanding Security of such series,
(1) change the Stated Maturity of the principal of (or premium, if
any) or any installment of interest on any Security of such series, or
reduce the principal amount thereof (or premium, if any) or the rate of
interest, if any, thereon, or reduce the amount of the principal of an
Original Issue Discount Security of such series that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 or the amount thereof provable in bankruptcy pursuant to
Section 504, or adversely affect any right of repayment at the option of
any Holder of any Security of such series, or change any Place of Payment
where, or the Currency in which, any Security of such series or any premium
or interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or Repayment Date, as the case may be), or
adversely affect any right to convert or exchange any Security as may be
provided pursuant to Section 301 herein, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of such series required for any such supplemental indenture, or
the consent of whose
<PAGE>
77
Holders is required for any waiver of compliance with certain provisions of
this Indenture which affect such series or certain defaults applicable to
such series hereunder and their consequences provided for in this
Indenture, or reduce the requirements of Section 1604 for quorum or voting
with respect to Securities of such series, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1014, except to increase any such percentage or to provide that
certain other provisions of this Indenture which affect such series cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby of such series.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series. Any such
supplemental indenture adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture, or modifying in any manner
the rights of the Holders of Securities of such series, shall not affect the
rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
<PAGE>
78
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and Interest.
---------------------------------------------------
The Company covenants and agrees for the benefit of the Holders of
each series of Securities and any related coupons that it will duly and
punctually pay the principal of (and premium, if any) and interest, if any, on
the Securities of that series in accordance with the terms of the Securities,
any coupons appertaining thereto and this Indenture. Unless otherwise specified
as contemplated by Section 301 with respect to any series of Securities, any
interest installments due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
<PAGE>
79
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
If the Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, where Securities of that series that
are convertible or exchangeable may be surrendered for conversion or exchange,
as applicable and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where Securities of that series that are convertible or exchangeable
may be surrendered for conversion or exchange, as applicable, where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise) (B) subject to any laws
or regulations applicable thereto, in a Place of Payment for that series which
is located outside the United States, an office or agency where Securities of
that series and related coupons may be presented and surrendered for payment;
provided, however, that, if the Securities of that series are listed on any
- -------- -------
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for the Securities of that
series in any required city located outside the United States so long as the
Securities of that series are listed on such exchange, and (C) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
located outside the United States an office or agency where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange, where Securities of
that series that are convertible and exchangeable may be surrendered for
conversion or exchange, as applicable and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Securities of any series and the
related coupons may be presented and surrendered for payment at the offices
specified in the Security, in London, and the Company hereby appoints the same
as its agents to receive such respective presentations, surrenders, notices and
demands.
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80
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
-------- -------
the Securities of a series are payable in Dollars, payment of principal of (and
premium, if any) and interest, if any, on any Bearer Security shall be made at
the office of the Company's Paying Agent in The City of New York, if (but only
if) payment in Dollars of the full amount of such principal, premium or
interest, as the case may be, at all offices or agencies outside the United
States maintained for such purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
any such designation; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities as contemplated by Section 301 with respect to a
series of Securities, the Company hereby designates as a Place of Payment for
each series of Securities the office or agency of the Company in the Borough of
Manhattan, The City of New York, and initially appoints the Trustee at its
Corporate Trust Office as Paying Agent in such city and as its agent to receive
all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Currency other than Dollars or (ii) may be payable in a Currency other than
Dollars, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one Exchange Rate Agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities and any related coupons, it will, on or
before each due date of the principal of (or premium, if any) or interest, if
any, on any of the Securities of that series, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum in the Currency in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay the principal
of (or
<PAGE>
81
premium, if any) or interest, if any, on Securities of such series so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, prior to or on each due
date of the principal of (or premium, if any) or interest, if any, on any
Securities of that series, deposit with a Paying Agent a sum (in the Currency
described in the preceding paragraph) sufficient to pay the principal (or
premium, if any) or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent (other than the Trustee) for
any series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) and interest, if any, on Securities of such series in
trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal of (or premium, if any) or interest, if any, on the
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Except as provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (or premium, if any) or interest, if
any, on any Security of any series, or any
<PAGE>
82
coupon appertaining thereto, and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security or coupon shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Restricted Subsidiary of the Company and the
corporate rights (charter and statutory), corporate licenses and corporate
franchises of the Company and its Restricted Subsidiaries, except where a
failure to do so, singly or in the aggregate, is not likely to have a materially
adverse effect upon the business, assets, financial condition or results of
operations of the Company and the Restricted Subsidiaries taken as a whole
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that the Company shall not be required to
--------
preserve any such existence (except of the Company), right, license or franchise
if the Board of Directors of the Company, or of the Restricted Subsidiary
concerned, shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or such Restricted Subsidiary and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
-------- -------
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
<PAGE>
83
SECTION 1006. Maintenance of Properties.
-------------------------
The Company shall cause all material properties owned by or leased to
it or any Restricted Subsidiary of the Company and necessary in the conduct of
its business or the business of such Restricted Subsidiary to be maintained and
kept in normal condition, repair and working order, ordinary wear and tear
excepted; provided that nothing in this Section shall prevent the Company or any
--------
Restricted Subsidiary of the Company from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of the
Company or the Restricted Subsidiary concerned, or of any officer (or other
agent employed by the Company or any Restricted Subsidiary of the Company) of
the Company or such Restricted Subsidiary having managerial responsibility for
any such property, desirable in the conduct of the business of the Company or
any Restricted Subsidiary of the Company and if such discontinuance or disposal
is not adverse in any material respect to the Holders.
The Company shall provide or cause to be provided, for itself and any
Restricted Subsidiaries of the Company, insurance (including appropriate self-
insurance) against loss or damage of the kinds customarily insured against by
corporations similarly situated and owning like properties in the same general
areas in which the Company or such Restricted Subsidiaries operate.
SECTION 1007. Limitation on Indebtedness.
--------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, incur, create, issue, assume, guarantee or otherwise
become liable for, contingently or otherwise, or become responsible for the
payment of, contingently or otherwise, any Indebtedness unless, after giving
effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1.
SECTION 1008. Limitation on Senior Subordinated Indebtedness.
----------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become liable for, contingently or otherwise, or become
responsible for the payment of, contingently or otherwise, any Indebtedness
which is senior in right of payment to the Securities of any series and
expressly subordinate in right of payment to any other Indebtedness of the
Company. For purposes of this Section 1008, Indebtedness is deemed to be
"senior" in right of payment to the Securities if it is not subordinate in right
of payment to Senior Indebtedness at least to the same extent as the Securities
are subordinate to Senior Indebtedness.
<PAGE>
84
SECTION 1009. Limitation on Restricted Payments.
---------------------------------
Except as otherwise provided in this Section 1009, the Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
make any Restricted Payment if (a) at the time of such proposed Restricted
Payment, a Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence of such Restricted Payment or (b) immediately after
giving effect to such Restricted Payment, the aggregate of all Restricted
Payments that shall have been made on or after July 1, 1988 would exceed the sum
of:
(i) $25,000,000, plus
(ii) an amount equal to the difference between (A) the Cumulative Cash
Flow Credit and (B) 1.2 multiplied by Cumulative Interest Expense.
For purposes of this Section 1009, the amount of any Restricted
Payment or Permitted Restricted Payment, if other than cash, shall be based upon
fair market value as determined by the Board of Directors of the Company, whose
good faith determination shall be conclusive.
The provisions of this Section 1009 shall not prevent (i) the payment
of any dividend within 60 days after the date of declaration thereof, if at such
date of declaration such payment complied with the provisions hereof; (ii) the
retirement or redemption of any shares of the Company's capital stock or
warrants, rights or options to acquire capital stock of the Company in exchange
for, or out of the proceeds of a substantially concurrent sale of, other shares
of its capital stock or warrants, rights or options to acquire capital stock of
the Company (other than Disqualified Stock); and (iii) the redemption of or
payments of cash dividends on the Company's 8% Series C Cumulative Preferred
Stock (the "Series C Preferred Stock") outstanding on January 1, 1995, which
redemptions or dividends are provided for by the terms of the Series C Preferred
Stock in effect on the date hereof (or the redemption of or payment of cash
dividends on any security of the Company issued in exchange for or upon the
conversion of such Series C Preferred Stock; provided that the aggregate amount
--------
payable pursuant to the terms of such security is no greater than the aggregate
amount payable pursuant to the terms of the Series C Preferred Stock). For
purposes of determining the aggregate permissible amount of Restricted Payments
in accordance with clause (b) of the first paragraph of this Section 1009, all
amounts expended pursuant to clauses (i) and (iii) of this paragraph shall be
included and all amounts expended or received pursuant to clause (ii) of this
paragraph shall be excluded; provided, however, that amounts paid pursuant to
-------- -------
clause (i) of this paragraph shall be included only to the extent that such
amounts were not previously included in calculating Restricted Payments.
<PAGE>
85
Notwithstanding the foregoing, so long as no Default or Event of
Default shall have occurred and be continuing, the Company may make any
Permitted Restricted Payment; provided, however, that such Permitted Restricted
-------- -------
Payment shall thereafter be counted as a Restricted Payment for purposes of
calculating whether any future Restricted Payments are permitted under this
Section 1009.
For the purpose of this Section 1009, the net proceeds from the
issuance of shares of capital stock of the Company upon conversion of
Indebtedness shall be deemed to be an amount equal to (i) the accreted value of
such Indebtedness on the date of such conversion and (ii) the additional
consideration, if any, received by the Company upon such conversion thereof,
less any cash payment on account of fractional shares (such consideration, if in
property other than cash, to be determined by the Board of Directors of the
Company and evidenced by a resolution of such Board, whose good faith
determination shall be conclusive). If the Company makes a Restricted Payment
which, at the time of the making of such Restricted Payment, would in the good
faith determination of the Company be permitted under the requirements of this
Section 1009, such Restricted Payment shall be deemed to have been made in
compliance with this Section 1009 notwithstanding any subsequent adjustments
made in good faith to the Company's financial statements affecting Cumulative
Cash Flow Credit or Cumulative Interest Expense for any period.
SECTION 1010. Limitation on Investments in Unrestricted Subsidiaries
------------------------------------------------------
and Affiliates.
- --------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, (i) make any Investment or (ii) allow any Restricted
Subsidiary to become an Unrestricted Subsidiary (a "redesignation of a
Restricted Subsidiary"), in each case unless (a) no Default or Event of Default
shall have occurred and be continuing or shall occur as a consequence of such
Investment or such redesignation of a Restricted Subsidiary and (b) after giving
effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1.
The foregoing provisions of this Section 1010 shall not prohibit (i)
any renewal or reclassification of any Investment existing on the date hereof or
(ii) trade credit extended on usual and customary terms in the ordinary course
of business.
SECTION 1011. Transactions with Affiliates.
----------------------------
The Company shall not, and shall not permit any of its subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to or purchase any property or assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, an Affiliate of the Company that is not a subsidiary of the Company, having
a value, or for consideration having a value, in excess of $10,000,000
individually or in the aggregate unless the Board of Directors of the Company
<PAGE>
86
shall make a good faith determination that the terms of such transaction are,
taken as a whole, no less favorable to the Company or such subsidiary, as the
case may be, than those which might be available in a comparable transaction
with an unrelated Person. For purposes of clarification, this Section 1011
shall not apply to any Restricted Payment or Permitted Restricted Payment
permitted by Section 1009.
SECTION 1012. Provision of Financial Statements.
---------------------------------
(a) The Company shall supply without cost to each Holder of the
Securities of any series, and file with the Trustee (if not otherwise filed with
the Trustee pursuant to Section 703) within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports and
quarterly reports and of the information, documents and other reports which the
Company may be required to file with the Commission pursuant to Section 13(a),
13(c) or 15(d) of the Securities Exchange Act of 1934.
(b) If the Company is not required to file with the Commission such
reports and other information referred to in Section 1012(a), the Company shall
furnish without cost to each Holder of the Securities and file with the Trustee
(i) within 140 days after the end of each fiscal year, annual reports containing
the information required to be contained in Items 1, 2, 3, 6, 7, 8 and 9 of Form
10-K promulgated under the Securities Exchange Act of 1934, or substantially the
same information required to be contained in comparable items of any successor
form, and (ii) within 75 days after the end of each of the first three fiscal
quarters of each fiscal year, quarterly reports containing the information
required to be contained in Form 10-Q promulgated under the Securities Exchange
Act of 1934, or substantially the same information required to be contained in
any successor form.
SECTION 1013. Statement as to Compliance.
--------------------------
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year ending after the date hereof, a brief certificate of its
principal executive officer, principal financial officer or principal accounting
officer stating whether, to such officer's knowledge, the Company is in
compliance with all covenants and conditions to be complied with by it under
this Indenture. For purposes of this Section 1013, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1014. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1007 through 1012 if, before or
after the time for such compliance, the Holders of a majority in aggregate
principal amount of all Outstanding
<PAGE>
87
Securities of any series shall, by Act of such Holders, waive such compliance in
such instance or generally waive compliance with such covenant or condition, but
no such waiver shall extend to or affect such covenant or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any
such covenant or condition shall remain in full force and effect.
SECTION 1015. Calculation of Original Issue Discount.
--------------------------------------
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with the terms of such Securities and
(except as otherwise specified as contemplated by Section 301 for Securities of
any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed and shall
deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Securities to be redeemed pursuant to Section 1103. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
<PAGE>
88
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal of Securities of such series; provided,
--------
however, that no such partial redemption shall reduce the portion of the
- -------
principal amount of a Security not redeemed to less than the minimum authorized
denomination for Securities of such series established pursuant to Section 301.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
--------------------
Except as otherwise specified as contemplated by Section 301, notice
of redemption shall be given in the manner provided for in Section 106 not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed.
All notices of redemption shall identify the Securities (including
CUSIP number, if any) to be redeemed and shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1106, if any,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without
charge, a new Security or
<PAGE>
89
Securities of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date, the Redemption Price and accrued
interest, if any, to the Redemption Date payable as provided in Section
1106 will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the Redemption Date or the amount of any
such missing coupon or coupons will be deducted from the Redemption Price
unless security or indemnity satisfactory to the Company, the Trustee and
any Paying Agent is furnished, and
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on such Redemption Date pursuant to Section 305 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in the Currency in which the Securities of such series are payable (except
as otherwise specified pursuant to Section 301 for the Securities of such series
and except, if applicable, as provided in Sections 312(b), 312(d) and 312(e))
sufficient to pay the Redemption Price of, and accrued interest, if any, on, all
the Securities which are to be redeemed on that date.
<PAGE>
90
SECTION 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the Currency in which the Securities of
such series are payable (except as otherwise specified pursuant to Section 301
for the Securities of such series and except, if applicable, as provided in
Sections 312(b), 312(d) and 312(e)) (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Securities shall, if the same were interest-bearing, cease to bear interest
and the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with said notice, together with
all coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
-------- -------
that installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
--------
however, that interest represented by coupons shall be payable only at an office
- -------
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) set forth
in such Security.
<PAGE>
91
SECTION 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Thirteen) shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SUBORDINATION
SECTION 1201. Securities Subordinated to Senior Indebtedness.
----------------------------------------------
The Company, for itself and its successors, and each Holder of a
Security of any series or of any coupon appertaining thereto, by his acceptance
of Securities of any series, agrees, that the payment of all amounts due in
respect of the Securities of such series and the coupons, if any, appertaining
thereto, including the payment of the principal (and premium, if any, on) and
interest on each and all of the Securities of such series and coupons, if any,
appertaining thereto, are subordinated, to the extent and in the manner provided
in this Article Twelve, to the prior payment in full of all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and they
and/or each of them may enforce such provisions.
SECTION 1202. No Payment on Securities in Certain Circumstances.
-------------------------------------------------
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration (unless waived, rescinded or annulled) or otherwise, or upon any
payment default (with or without the giving of notice or lapse of time or both,
in accordance with the terms of the instrument governing such Senior
Indebtedness, and without any waiver or forgiveness) with respect to any Senior
Indebtedness, all amounts payable thereon shall first be paid in full, or such
payment duly provided for in cash or in a manner satisfactory to the holders of
such Senior Indebtedness, before any payment is made, directly or indirectly by
<PAGE>
92
set off or otherwise, on account of principal of, or interest on, the Securities
of any series or to acquire any of the Securities of any series or on account of
the redemption provisions of the Securities of any series.
(b) Upon a default with respect to any Senior Indebtedness (other than
under circumstances when the terms of paragraph (a) of this Section are
applicable), as such default is defined therein or in the instrument under
which it is outstanding, permitting the holders to accelerate the maturity
thereof, upon written notice thereof given to the Company and the Trustee by the
agent or agents under the Bank Credit Agreement ("Default Notice"), then, unless
and until such default shall have been cured or waived by the holders of such
Senior Indebtedness or shall have ceased to exist, no direct or indirect payment
shall be made by the Company with respect to the principal of, or interest on,
the Securities of any series and the coupons, if any, appertaining thereto
(other than payments made in Junior Securities) or to acquire any of such
Securities or on account of the redemption provisions of the Securities of any
series and the coupons, if any, appertaining thereto; provided, however, that
-------- -------
this paragraph (b) shall not prevent the making of any payment (which is not
otherwise prohibited by paragraph (a)) for more than 120 days after the Default
Notice shall have been given unless the Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety,
in which case no such payment may be made until such acceleration has been
rescinded or annulled or such Senior Indebtedness has been paid in full.
Notwithstanding the foregoing, not more than one Default Notice shall be given
with respect to Senior Indebtedness within a period of 240 consecutive days.
(c) If, notwithstanding the foregoing provisions of this Section, any
payment on account of principal of, or interest on, the Securities of any series
or of any coupon appertaining thereto shall be received by the Trustee, by any
Holder or by any Paying Agent (or, if the Company is acting as its own Paying
Agent, money for any such payment is segregated and held in trust), then, unless
and until such payment is no longer prohibited by this Section, such payment
(subject to the provisions of Sections 1206 and 1207) shall be held in trust for
the benefit of the holders of Senior Indebtedness and, upon notice to the
Trustee or such Paying Agent from the representative of the holders of the
Senior Indebtedness and pursuant to the directions of such representative, shall
be paid over or delivered to the holders of Senior Indebtedness or their
representative(s), ratably according to the aggregate amount remaining unpaid on
account of the principal of and interest on the Senior Indebtedness held or
represented by each, for application to the payment or prepayment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution or provision therefor to or for the holders
of Senior Indebtedness. Promptly after becoming aware thereof, the Company
shall give written notice to the Trustee of any event prohibiting payments on
account of principal of, or interest on, the Securities of any series and any
coupons appertaining thereto and, in such event, shall provide to the Trustee,
in the form of an Officers' Certificate, the names and addresses of the holders
of
<PAGE>
93
such Senior Indebtedness and their representative(s), if any, the amount of the
Senior Indebtedness held by each such holder, any information necessary to
calculate the daily or other increase in Senior Indebtedness held by such
holders and any other information which the Trustee may reasonably request to
comply with this Article. Subject to the provisions of Section 1203 hereof, in
the event that the Trustee or the Paying Agent reasonably determines that
additional evidence is required with respect to any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee or the Paying Agent, as the case may be, may request that
such person furnish evidence to its reasonable satisfaction as to the amount of
Senior Indebtedness held by each such person, as to the extent such person is
entitled to participate in such payment or distribution and as to other facts
pertinent to the rights of such persons under this Article and if such evidence
is not furnished, the Trustee or the Paying Agent, as the case may be, may defer
any payment to such person pending judicial determination as to the right of
such person to receive such payment.
SECTION 1203. Securities Subordinated to Prior Payment of All Senior
------------------------------------------------------
Indebtedness on Dissolution, Winding-Up, Liquidation or Reorganization of the
- -----------------------------------------------------------------------------
Company.
- -------
Upon any payment by or distribution of the assets of the Company to
creditors upon any dissolution, winding up, liquidation or reorganization of the
Company (whether in a bankruptcy or reorganization case, insolvency or
receivership proceedings, voluntary liquidation or upon any assignment for the
benefit of creditors or otherwise):
(1) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full of all amounts payable thereon, or provision shall
be made for such payment, before the Holders of any Security of any series
or of any coupon appertaining thereto are entitled to receive any payment
on account of the principal of, or interest on, such Securities or coupons;
(2) any payment by, or distribution of assets of, the Company of any
kind or character, whether in cash, property or securities (other than
Junior Securities) to which the Holders or the Trustee on behalf of the
Holders would be entitled except for the provisions of this Article Twelve,
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other Indebtedness of the
Company being subordinated to the payment of the Securities of any series
and the coupons appertaining thereto, if any, shall be paid by the
liquidating trustee or agent or other Person making such a payment or
distribution, directly to the holders of Senior Indebtedness or their
representative(s), ratably according to the aggregate amounts remaining
unpaid on account of the principal of and interest on the Senior
Indebtedness held or represented by each, for application to payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay
<PAGE>
94
all Senior Indebtedness in full after giving effect to any concurrent
payment or distribution, or provision therefor, to the holders of such
Senior Indebtedness; and
(3) if, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property
or securities (other than Junior Securities), shall be received by the
Trustee or the Holders or any Paying Agent (or, if the Company is acting as
its own Paying Agent, money for any such payment or distribution is
segregated or held in trust) on account of principal of, or interest on,
the Securities of any series and the coupons appertaining thereto, if any,
before all Senior Indebtedness is paid in full, or effective provision made
for its payment, such payment or distribution (subject to the provisions of
Sections 1206 and 1207) shall be received and held in trust for and shall
be paid over to the holders of the Senior Indebtedness remaining unpaid or
unprovided for or their representative(s), ratably according to the
aggregate amounts remaining unpaid on account of the principal of and
interest on the Senior Indebtedness held or represented by each, for
application to payment or prepayment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in full,
after giving effect to any concurrent payment or distribution, or provision
therefor, to the holders of such Senior Indebtedness.
If the Company effects a transaction permitted by Article Eight, such
transaction shall not be deemed to be a dissolution, winding up, liquidation or
reorganization of the Company for purposes of this Section.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company or
assignment for the benefit of creditors by the Company.
Upon any distribution of assets of the Company referred to in this
Article, the Trustee, subject to the provisions of Sections 601 and 602, and the
Holders of Securities of any series or of any coupon appertaining thereto shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up or liquidation proceeding, or
bankruptcy or reorganization case, is pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to such Holders, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness of
the Company and other Indebtedness of the Company, the amount thereof payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
<PAGE>
95
SECTION 1204. Securityholders to Be Subrogated to Rights of Holders
-----------------------------------------------------
of Senior Indebtedness.
- ----------------------
Upon payment in full of all Senior Indebtedness, the Holders of
Securities of any series or of any coupon appertaining thereto shall be
subrogated (equally and ratably with the holders of all Indebtedness of the
Company which by its terms is not superior in right of payment to the Securities
of any series or of any coupons appertaining thereto and which ranks on a parity
with the Securities of such series) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until all amounts owing on such Securities
and coupons, if any, shall be paid in full, and for the purposes of such
subrogation no payments or distributions to the holders of Senior Indebtedness
by the Company to which the Holders would be entitled except for the provisions
of this Article, and no payment pursuant to the provisions of this Article to
the holders of Senior Indebtedness shall, as between the Company, its creditors
(other than the holders of Senior Indebtedness) and the Holders, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of Securities of
any series or of any coupon appertaining thereto would otherwise have been
entitled but for the provisions of this Article shall have been applied,
pursuant to the provisions of this Article, to the payment of all amounts
payable under the Senior Indebtedness, then and in such case, the Company
specifically agrees that such Holders shall be entitled to receive from the
holders of such Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount sufficient to pay all amounts payable under or in respect of the Senior
Indebtedness in full.
SECTION 1205. Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in any Security of any series is intended to or shall impair, as
between the Company, its creditors (other than the holders of Senior
Indebtedness) and the Holders of Securities of any series and the coupons, if
any, appertaining thereto, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on, the
Securities of any series and the coupons, if any, appertaining thereto, as and
when the same shall become due and payable in accordance with their terms, or to
affect the relative rights of such Holders and creditors of the Company (other
than the holders of Senior Indebtedness), nor shall anything herein or therein
prevent the Trustee or any such Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior
<PAGE>
96
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
SECTION 1206. Knowledge of Trustee.
--------------------
Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment to
or by the Trustee, or the taking of any other action under this Indenture by the
Trustee, unless and until two Business Days after the Trustee shall have
received written notice thereof from the Company, any Securityholder, any Paying
Agent or any holder of Senior Indebtedness or its representative.
SECTION 1207. Application by Trustee or Paying Agent of Assets
------------------------------------------------
Deposited with It.
- -----------------
If on a date not less than two Business Days prior to the date on
which by the terms of this Indenture any monies deposited with the Trustee or
any Paying Agent (other than the Company, if it acts as Paying Agent) may become
payable for any purpose (including, without limitation, the payment of either
principal of, or interest on, any Security of any series and the coupons, if
any, appertaining thereto), the Trustee or such Paying Agent shall not have
received with respect to such payment the written notice provided for in Section
1206, then the Trustee or such Paying Agent shall have full power and authority
to receive such monies and to apply them to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such date, without, however, limiting any rights that
holders of Senior Indebtedness may have to recover any such payments from the
Holders in accordance with the provisions of this Article.
SECTION 1208. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of Company or Holders of Senior Indebtedness.
- --------------------------------------------
No right of any present or future holders of any Senior Indebtedness
to enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Indebtedness may extend, renew, modify, or increase Senior
Indebtedness or amend the terms of the Senior Indebtedness or any security or
guarantee therefor and release, sell or exchange such security or guarantee and
otherwise deal freely with the Company, all without affecting the liabilities
and obligations of the parties to this Indenture or the Holders.
<PAGE>
97
SECTION 1209. Securityholders Authorize Trustee to Effectuate
-----------------------------------------------
Subordination of Securities.
- ---------------------------
Each Holder by his acceptance of the Securities of any series and the
coupons, if any, appertaining thereto, authorizes and expressly directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for such purpose, including, in the event of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in a bankruptcy or reorganization case, insolvency or receivership proceedings,
voluntary liquidation or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its or his
Securities in the form required in such proceeding and cause such claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding on or prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of the Senior
Indebtedness or their representative(s) are hereby authorized to have the right
to file and are hereby authorized to file an appropriate claim for and on behalf
of the Holders.
SECTION 1210. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness.
- ------------
Neither the Trustee nor any Paying Agent (including the Company if the
Company acts as Paying Agent) shall be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. Neither the Trustee nor any Paying Agent shall
be liable to any such holder (subject to Section 1206 hereof, except for its own
gross negligence or willful misconduct) if any of them shall mistakenly pay over
or distribute to Holders of the Securities of any series and the coupons, if
any, appertaining thereto, the Company or any other person monies or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise. With respect to the holders of Senior Indebtedness, the
Trustee or the Paying Agent undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee or the Paying
Agent.
SECTION 1211. Right of Trustee to Hold Senior Indebtedness.
--------------------------------------------
The Trustee shall be entitled to all of the rights set forth in this
Article in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
<PAGE>
98
SECTION 1212. Article Twelve Not to Prevent Events of Default.
-----------------------------------------------
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article shall not be
construed as preventing the occurrence of an Event of Default under Section 501.
Nothing contained in this Article Twelve shall limit the right of the Trustee or
the Holders of Securities of any series and the coupons, if any, appertaining
thereto, to take any action to accelerate the maturity of the Securities
pursuant to Section 502 or to pursue any rights or remedies hereunder; provided
--------
that all Senior Indebtedness then or thereafter due or declared to be due shall
first be paid in full before such Holders or the Trustee are entitled to receive
any payment from the Company of principal of, or interest on, the Securities.
SECTION 1213. Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article shall apply to amounts due to the Trustee
pursuant to Section 606.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
------------------------
Retirements of Securities of any series pursuant to any sinking fund
shall be made in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1302. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
<PAGE>
99
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
Subject to Section 1303, in lieu of making all or any part of any
mandatory sinking fund payment with respect to any Securities of a series in
cash, the Company may at its option (1) deliver to the Trustee Outstanding
Securities of a series (other than any previously called for redemption)
theretofore purchased or otherwise acquired by the Company together in the case
of any Bearer Securities of such series with all unmatured coupons appertaining
thereto, and/or (2) receive credit for the principal amount of Securities of
such series which have been previously delivered to the Trustee by the Company
or for Securities of such series which have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
mandatory sinking fund payment with respect to the Securities of the same series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided, however, that such Securities have not been
-------- -------
previously so credited. Such Securities shall be received and credited for such
purpose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
SECTION 1303. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the Currency in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) and the portion thereof, if any,
which is to be satisfied by delivering or crediting Securities of that series
pursuant to Section 1302 (which Securities will, if not previously delivered,
accompany such certificate) and whether the Company intends to exercise its
right to make a permitted optional sinking fund payment with respect to such
series. Such certificate shall be irrevocable and upon its delivery the Company
shall be obligated to make the cash payment or payments therein referred to, if
any, on or before the next succeeding sinking fund payment date. In the case of
the failure of the Company to deliver such certificate, the sinking fund payment
due on the next succeeding sinking fund payment date for that series shall be
paid entirely in cash and shall be sufficient to redeem the principal amount of
such Securities subject to a mandatory sinking fund payment without the option
to deliver or credit Securities as provided in Section 1302 and without the
right to make any optional sinking fund payment, if any, with respect to such
series.
<PAGE>
100
Not more than 60 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
Prior to any sinking fund payment date, the Company shall pay to the
Trustee or a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) in cash a sum equal to
any interest that will accrue to the date fixed for redemption of Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 1303.
Notwithstanding the foregoing, with respect to a sinking fund for any
series of Securities, if at any time the amount of cash to be paid into such
sinking fund on the next succeeding sinking fund payment date, together with any
unused balance of any preceding sinking fund payment or payments for such
series, does not exceed in the aggregate $100,000, the Trustee, unless requested
by the Company, shall not give the next succeeding notice of the redemption of
Securities of such series through the operation of the sinking fund. Any such
unused balance of moneys deposited in such sinking fund shall be added to the
sinking fund payment for such series to be made in cash on the next succeeding
sinking fund payment date or, at the written request of the Company, shall be
applied at any time or from time to time to the purchase of Securities of such
series, by public or private purchase, in the open market or otherwise, at a
purchase price for such Securities (excluding accrued interest and brokerage
commissions, for which the Trustee or any Paying Agent will be promptly
reimbursed by the Company) not in excess of the principal amount thereof.
ARTICLE FOURTEEN
REPAYMENT AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
------------------------
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of such
Securities and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
<PAGE>
101
SECTION 1402. Repayment of Securities.
-----------------------
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereof,
together with interest, if any, thereon accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on
or before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the Currency in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay
the principal (or, if so provided by the terms of the Securities of any series,
a percentage of the principal) of and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest, if any, on, all the Securities or
portions thereof, as the case may be, to be repaid on such date.
SECTION 1403. Exercise of Option.
------------------
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. To be repaid at the option of the Holder, any Security so
providing for such repayment, with the "Option to Elect Repayment" form on the
reverse of such Security duly completed by the Holder (or by the Holder's
attorney duly authorized in writing), must be received by the Company at the
Place of Payment therefor specified in the terms of such Security (or at such
other place or places or which the Company shall from time to time notify the
Holders of such Securities) not earlier than 45 days nor later than 30 days
prior to the Repayment Date. If less than the entire principal amount of such
Security is to be repaid in accordance with the terms of such Security, the
principal amount of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
repayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of the series of
which such Security to be repaid is a part. Except as otherwise may be provided
by the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
<PAGE>
102
SECTION 1404. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable.
- -------
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
- -------- -------
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
-------- -------
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1402 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
-------- -------
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment
<PAGE>
103
Date at the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) set forth in such Security.
SECTION 1405. Securities Repaid in Part.
-------------------------
Upon surrender of any Registered Security which is to be repaid in
part only, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge and at the
expense of the Company, a new Registered Security or Securities of the same
series, of any authorized denomination specified by the Holder, in an aggregate
principal amount equal to and in exchange for the portion of the principal of
such Security so surrendered which is not to be repaid.
ARTICLE FIFTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1501. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, the provisions of this Article Fifteen shall apply to
each series of Securities, and the Company may, at its option, effect defeasance
of the Securities of or within a series under Section 1502, or covenant
defeasance of or within a series under Section 1503 in accordance with the terms
of such Securities and in accordance with this Article.
SECTION 1502. Defeasance and Discharge.
------------------------
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any related coupons on the date the conditions set
forth in Section 1504 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Outstanding Securities
and any related coupons, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 1505 and the other Sections of this Indenture
referred to in (A) and (B) below, and to have satisfied all its other
obligations under such Securities and any related coupons and this Indenture
insofar as such Securities and any related coupons are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of such
Outstanding Securities and any related coupons to receive, solely from the trust
fund described in Section 1504 and
<PAGE>
104
as more fully set forth in such Section, payments in respect of the principal of
(and premium, if any) and interest, if any, on such Securities and any related
coupons when such payments are due, (B) the Company's obligations with respect
to such Securities under Sections 304, 305, 306, 1002 and 1003, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Fifteen. Subject to compliance with this Article Fifteen, the Company
may exercise its option under this Section 1502 notwithstanding the prior
exercise of its option under Section 1503 with respect to such Securities and
any related coupons.
SECTION 1503. Covenant Defeasance.
-------------------
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under any covenant under Article Eight and in
Sections 1004 through 1012, and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and any related coupons on and after the date the conditions set
forth in Section 1504 are satisfied (hereinafter, "covenant defeasance"), and
such Securities and any related coupons shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any related coupons, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(4) or Section 501(9) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any related coupons shall be unaffected thereby. In addition,
upon the Company's exercise under Section 1501 of the option applicable to
Section 1503, Sections 501(4) through (6) shall not constitute Events of
Default.
SECTION 1504. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
1502 or Section 1503 to any Outstanding Securities of or within a series and any
related coupons:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Fifteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
related coupons, (A) an amount (in such
<PAGE>
105
Currency in which such Securities and any related coupons are then
specified as payable at Stated Maturity), or (B) Government Obligations
applicable to such Securities (determined on the basis of the Currency in
which such Securities are then specified as payable at Stated Maturity)
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment of principal of and premium, if any, and
interest, if any, under such Securities and any related coupons, money in
an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium, if any)
and interest, if any, on such Outstanding Securities and any related
coupons on the Stated Maturity (or Redemption Date, if applicable) of such
principal (and premium, if any) or installment of interest, if any, and
(ii) any mandatory sinking fund payments or analogous payments applicable
to such Outstanding Securities and any related coupons on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any related coupons; provided that the
--------
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such Government Obligations to said payments with respect to
such Securities and any related coupons. Before such a deposit, the
Company may give to the Trustee, in accordance with Section 1102 hereof, a
notice of its election to redeem all or any portion of such Outstanding
Securities at a future date in accordance with the terms of the Securities
of such series and Article Eleven hereof, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall be given
effect in applying the foregoing.
(2) No Default or Event of Default with respect to such Securities or
any related coupons shall have occurred and be continuing on the date of
such deposit or, insofar as paragraphs (7) and (8) of Section 501 are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) No event or condition shall exist that, pursuant to the provisions
of Section 1202 or 1203, would prevent the Company from making payments of
the principal of (and premium, if any) or interest on the Securities on the
date of such deposit or at any time during the period ending on the 91st
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
<PAGE>
106
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(5) In the case of an election under Section 1502, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of execution of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Outstanding Securities and any
related coupons will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
(6) In the case of an election under Section 1503, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any related coupons will not
recognize income, gain or loss for federal income tax purposes as a result
of such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(7) In the case of an election under either Section 1502 or 1503, the
Company shall represent to the Trustee that the deposit made by the Company
pursuant to its election under Section 1502 or 1503 was not made by the
Company with the intent of preferring the Holders of Securities of any
series over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others.
(8) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations in connection
therewith pursuant to Section 301.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1502
or the covenant defeasance under Section 1503 (as the case may be) have
been complied with.
<PAGE>
107
SECTION 1505. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
- ----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1505, the
"Trustee") pursuant to Section 1504 in respect of such Outstanding Securities
and any related coupons shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and any related coupons and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any related coupons of all sums
due and to become due thereon in respect of principal (and premium, if any) and
interest, if any, but such money need not be segregated from other funds except
to the extent required by law. Money and U.S. Government Obligations so held in
trust are not subject to Article Twelve.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1504(1) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 312(b) or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 1504(1) has been made in respect of such Security, or (b) a
Conversion Event occurs as contemplated in Section 312(d) or 312(e) or by the
terms of any Security in respect of which the deposit pursuant to Section
1504(1) has been made, the indebtedness represented by such Security and any
related coupons shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any) and
interest, if any, on such Security as they become due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the Currency in which such Security becomes payable as a result of
such election or Conversion Event based on the applicable Market Exchange Rate
for such Currency in effect on the third Business Day prior to each payment
date, except, with respect to a Conversion Event, for such Currency in effect
(as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1504 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any related
coupons.
Anything in this Article Fifteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or
<PAGE>
108
Government Obligations (or other property and any proceeds therefrom) held by it
as provided in Section 1504 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance, as applicable, in accordance with this Article.
SECTION 1506. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1505 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such
Securities and any related coupons shall be revived and reinstated as though no
deposit had occurred pursuant to Section 1502 or 1503, as the case may be, until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 1505; provided, however, that if the Company makes any
-------- -------
payment of principal of (or premium, if any) or interest, if any, on any such
Security or any related coupon following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
and any related coupons to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE SIXTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1601. Purposes for Which Meetings May Be Called.
-----------------------------------------
If Securities of a series are issuable as Bearer Securities, a meeting
of Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1602. Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1601, to be held
at such time and at such place in The City of New York or in London as the
Trustee shall determine. Notice of every meeting of Holders of Securities of
any series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be
<PAGE>
109
given, in the manner provided for in Section 106, not less than 21 nor more than
180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1601, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in The City
of New York or in London for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in paragraph (a) of this Section.
SECTION 1603. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder of Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Person
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1604. Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that, if any action is
-------- -------
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned
<PAGE>
110
meeting shall be given as provided in Section 1602(a), except that such notice
need be given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened. Notice of the reconvening of any
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for lack of a quorum the Persons entitled to vote 25% in principal amount of the
Outstanding Securities at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of
not less than a majority in principal amount of the Outstanding Securities of
such series; provided, however, that, except as limited by the proviso to
-------- -------
Section 902, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of not less than such specified percentage in
principal amount of the Outstanding Securities of such series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1604, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
<PAGE>
111
SECTION 1605. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings.
- -----------
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as its shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1602(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of Outstanding
Securities of such series held or represented by him (determined as specified in
the definition of "Outstanding" in Section 101); provided, however, that no vote
-------- -------
shall be cast or counted at any meeting in respect of any Security challenged as
not Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1602 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
<PAGE>
112
SECTION 1606. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the Secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1602 and, if
applicable, Section 1604. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
<PAGE>
113
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CABLEVISION SYSTEMS
CORPORATION
By: _____________________________
Name:
Title:
[Seal]
Attest:
THE BANK OF NEW YORK
By: _____________________________
Name:
Title:
[Seal]
Attest:
<PAGE>
EXHIBIT A
LIST OF RESTRICTED SUBSIDIARIES
CSC Acquisition - MA, Inc.
CSC Acquisition - NY, Inc.
CSC Acquisition Corporation
Cablevision Area 9 Corporation
Cablevision Fairfield Corporation
Cablevision Finance Corporation
Cablevision Finance Limited Partnership
Cablevision of Cleveland G.P., Inc.
Cablevision of Cleveland L.P., Inc.
Cablevision of Cleveland, L.P.
Cablevision Programming of Southern Connecticut, Limited
Partnership
Cablevision Systems Dutchess Corporation
Cablevision Systems East Hampton Corporation
Cablevision Systems Great Neck Corporation
Cablevision Systems Huntington Corporation
Cablevision Systems Islip Corporation
Cablevision Systems Long Island Corporation
Cablevision Systems New York City Corporation
Cablevision Systems Suffolk Corporation
Cablevision Systems Westchester Corporation
Cablevision Systems of Southern Connecticut Limited
Partnership
Cablevision of Connecticut Corporation
Cablevision of Connecticut Limited Partnership
Cablevision of Michigan, Inc.
Cablevision of New Jersey, Inc.
Cablevision of New York City - Master L.P.
Cablevision of New York City - Phase I L.P.
Communications Development Corporation
Cablevision Lightpath, Inc. (f/k/a NuComm Test, Inc.)
NYC GP Corp.
NYC LP Corp.
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR
TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description
--------------------------------------
of Securities to be delivered]
-----------------------------
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States persons(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 2.165-
12(c)(1)(v) are herein referred to as "financial institutions") purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise Cablevision Systems Corporation or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the above-
captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable
B-1-1
<PAGE>
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to [U.S.$]__________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
[To be dated no earlier than the
15th day prior to (i) the Exchange
Date or (ii) the relevant Interest
Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making Certification]
------------------------------------
(Authorized Signatory)
Name:
Title:
B-1-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description
--------------------------------------
of Securities to be delivered]
-----------------------------
This is to certify that based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$]__________ principal
amount of the above-captioned Securities (i) is owned by person(s) that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise Cablevision Systems
Corporation or its agent that such financial institution will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) is owned by United
States or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)) and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
B-2-1
<PAGE>
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
[To be dated no earlier than the
Exchange Date or the relevant Interest
Payment Date occurring prior to the
Exchange Date, as applicable]
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, as Operator of the
Euroclear System]
[CEDEL S.A.]
By _________________________________
B-2-2
<PAGE>
EXHIBIT 5.1
October 16, 1995
Cablevision Systems Corporation,
One Media Crossways,
Woodbury, New York 11797.
Dear Sirs:
In connection with the registration under the Securities Act of 1933 (the
"Act") of $1,000,000,000 aggregate public offering price of (i) subordinated
debt securities (the "Debt Securities"), (ii) shares of preferred stock, $.01
par value ("Preferred Stock"), which may be issued in the form of Depositary
Shares evidenced by Depositary Receipts, (iii) shares of Class A common stock,
par value $.01 per share ("Class A Common Stock"), and (iv) warrants to purchase
the Debt Securities, Preferred Stock or Class A Common Stock ("Warrants" and,
collectively with the Debt Securities, Preferred Stock or Class A Common Stock,
the "Securities") of Cablevision Systems Corporation, a Delaware corporation
(the "Company"), we, as your counsel, have examined such corporate records,
certificates and other
<PAGE>
Cablevision Systems Corporation -2-
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion:
(1) With respect to the Debt Securities, when the registration
statement relating to the Securities (the "Registration Statement") has
become effective under the Act, the Indenture relating to the Debt
Securities has been duly authorized, executed and delivered, the terms of
the Debt Securities and of their issuance and sale have been duly
established in conformity with the Indenture so as not to violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and the Debt Securities have been duly
executed and authenticated in accordance with the Indenture and issued and
sold as contemplated in the Registration Statement, the Debt Securities
will constitute valid and legally binding obligations of the Company,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws
<PAGE>
Cablevision Systems Corporation -3-
of general applicability relating to or affecting creditors' rights and to
general equity principles.
(2) With respect to the Preferred Stock, when the Registration
Statement has become effective under the Act, the terms of the Preferred
Stock and of their issuance and sale have been duly established in
conformity with the Company's certificate of incorporation so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company, an appropriate certificate of
designations with respect to the Preferred Stock has been duly filed with
the Secretary of State of the State of Delaware, and the Preferred Stock
has been duly issued and sold as contemplated by the Registration
Statement, the Preferred Stock will be validly issued, fully paid and
nonassessable.
(3) With respect to the Depositary Shares, when the Registration
Statement has become effective under the Act, the Deposit Agreement
relating to the Depositary Shares has been duly authorized, executed and
delivered, the terms of the Depositary Shares and
<PAGE>
Cablevision Systems Corporation -4-
of their issuance and sale have been duly established in conformity with
the Deposit Agreement so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company, the
Preferred Stock that is represented by Depositary Shares is duly
authorized, validly issued and delivered to the Depositary, and the
Depositary Receipts evidencing the Depositary Shares are duly issued
against deposit of the Preferred Stock in accordance with the Deposit
Agreement and issued and sold as contemplated by the Registration
Statement, the Depositary Receipts evidencing the Depositary Shares will be
validly issued and will entitle the holders thereof to the rights specified
in the Depositary Shares and the Deposit Agreement, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(4) With respect to the Class A Common Stock, when the Registration
Statement has become effective
<PAGE>
Cablevision Systems Corporation -5-
under the Act, the terms of the sale of the Class A Common Stock have been
duly established in conformity with the Company's certificate of
incorporation so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company, and
the Class A Common Stock has been duly issued and sold as contemplated by
the Registration Statement, the Class A Common Stock will be validly
issued, fully paid and nonassessable.
(5) With respect to the Warrants, when the Registration Statement has
become effective under the Act, the Warrant Agreement relating to the
Warrants has been duly authorized, executed and delivered, the terms of the
Warrants and of their issuance and sale have been duly established in
conformity with the Warrant Agreement so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction
over the Company, and the Warrants have been duly executed and
<PAGE>
Cablevision Systems Corporation -6-
countersigned in accordance with the Warrant Agreement and issued and sold
as contemplated by the Registration Statement, the Warrants will constitute
valid and legally binding obligations of the Company, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
In rendering our opinion set forth in paragraph (1) above, we are
expressing no opinion as to Federal or state laws relating to fraudulent
transfers.
We note that, as of the date of this opinion, a judgment for money in
an action based on a Security denominated in a foreign currency or currency unit
in a Federal or state court in the United States ordinarily would be enforced in
the United States only in United States dollars. The date used to determine the
rate of conversion of the foreign currency or currency unit in which a
particular Security is denominated into United States dollars will depend upon
various factors, including which court renders the judgment. In the case of a
Debt Security denominated in a foreign currency, a state court in the State of
New York rendering a judgment on such Debt Security would be required under
Section 27 of the New York Judiciary
<PAGE>
Cablevision Systems Corporation -7-
Law to render such judgment in the foreign currency in which the Debt Security
is denominated, and such judgment would be converted into United States dollars
at the exchange rate prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, and we are expressing no opinion as to the effect of the laws
of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Securities" in the Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 12
CABLEVISION SYSTEMS CORPORATION
COMPUTATION OF RATIO OF DEFICIENCY OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(FIXED CHARGES COVERAGE DEFICIENCIES)
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
--------------------- ---------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Loss from continuing
operations................. $(195,439) $(111,851) $(315,151) ($246,782) ($250,503) $(227,199) $(271,375)
Add:
Fixed charges per (B)
below...................... 159,051 121,436 269,627 238,109 199,661 264,039 268,491
Amortization of previously
capitalized interest....... 37 74 148 138 74 75 74
Deduct:
Interest capitalized
during period.............. -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Earnings for computation
purposes (A)............... $ (36,351) $ 9,659 $ (45,376) $ (8,535) $ (50,768) $ 36,915 $ (2,810)
========= ========= ========= ========= ========= ========= =========
Fixed Charges:
Interest on indebtedness,
expensed or capitalized,
including amortization
of debt expense............ 155,318 118,586 263,299 232,434 194,628 258,794 263,564
Portion of rents
representative of the
interest factor............ 3,733 2,850 6,328 5,675 5,033 5,245 4,927
--------- --------- --------- --------- --------- --------- ---------
Fixed charges for
computation purposes (B).... $ 159,051 $ 121,436 $ 269,627 $ 238,109 $ 199,661 $ 264,039 $ 268,491
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed
charges (A)/(B)............. -- -- -- -- -- -- --
Deficiency of earnings
available to cover fixed
charges..................... $(195,402) $(111,777) $(315,003) $(246,644) $(250,429) $(227,124) $(271,301)
========= ========= ========= ========= ========= ========= =========
Preferred stock
dividends (C)............... $ 4,918 $ 2,054 $ 6,385 $ 885 $ 885 $ 4,464 $ 4,065
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed
charges and preferred
stock dividends (A)/(B+C)... -- -- -- -- -- -- --
Deficiency of earnings
available to cover fixed
charges and preferred
stock dividends............. $(200,320) $(113,831) $(321,388) $(247,529) $(251,314) $(231,588) $(275,366)
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
CABLEVISION SYSTEMS CORPORATION
COMPUTATION OF PRO FORMA RATIO OF
DEFICIENCY OF EARNINGS TO FIXED CHARGES
(FIXED CHARGES COVERAGE DEFICIENCIES)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, December 31, 1994
---------- ------------------
(Dollars in thousands)
<S> <C> <C>
Earnings:
Loss from continuing operations.......................... $(184,646) $(344,775)
Add:
Fixed charges per (B) below.............................. 141,377 273,547
Amortization of previously capitalized interest.......... 37 148
Deduct:
Interest capitalized during period....................... -- --
--------- ---------
Earnings for computation purposes (A).................... $ (43,232) $ (71,080)
========= =========
Fixed Charges:
Interest on indebtedness, expensed or capitalized,
including amortization of debt expense.................. 137,556 266,443
Portion of rents representative of the
interest factor......................................... 3,821 7,104
--------- ---------
Fixed Charges for computation purposes (B)................ $ 141,377 $ 273,547
========= =========
Ratio of earnings to fixed charges (A)/(B)................ -- --
Deficiency of earnings available to cover fixed
charges.................................................. $(184,609) $(344,627)
========= =========
Preferred stock dividends (C)............................. $ 25,993 $ 49,788
========= =========
Ratio of earnings to fixed charges and preferred
Stock dividends (A)/(B+C)................................ -- --
Deficiency of earnings available to cover fixed
charges and preferred stock dividends................... $(210,602) $(394,415)
========= =========
</TABLE>
<PAGE>
EXHIBIT 23.2
ACCOUNTANTS CONSENT
-------------------
The Board of Directors
Cablevision Systems Corporation:
We consent to the incorporation by reference in the registration
statement on Form S-3 of Cablevision Systems Corporation of our report dated
March 10, 1995, relating to the consolidated balance sheets of Cablevision
Systems Corporation and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, stockholders' deficiency and cash
flows for each of the years in the three-year period ended December 31, 1994,
and the related schedule, which report appears in the December 31, 1994 annual
report on Form 10-K of Cablevision Systems Corporation, and to the reference to
our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Jericho, New York
September 1, 1995
<PAGE>
ACCOUNTANTS' CONSENT
--------------------
The Board of Directors
A-R Cable Services, Inc.:
We consent to the incorporation by reference in the registration
statement on Form S-3 of Cablevision Systems Corporation of our report dated
March 10, 1995, relating to the consolidated balance sheets of A-R Cable
Services, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, stockholders' deficiency and cash
flows for each of the years in the three-year period ended December 31, 1994,
which report appears as an exhibit in the December 31, 1994 annual report on
Form 10-K of Cablevision Systems Corporation, and to the reference to our firm
under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
--------------------------
KPMG Peat Marwick LLP
Jericho, New York
October 16, 1995
<PAGE>
ACCOUNTANTS' CONSENT
--------------------
The Board of Directors
Cablevision of Boston Limited Partnership:
We consent to the incorporation by reference in the registration
statement on Form S-3 of Cablevision Systems Corporation of our report dated
March 10, 1995, relating to the consolidated balance sheets of Cablevision of
Boston Limited Partnership and consolidated company as of December 31, 1994 and
1993, and the related consolidated statements of operations, partners'
deficiency and cash flows for each of the years in the three-year period ended
December 31, 1994, which report appears in the December 31, 1994 annual report
on Form 10-K of Cablevision of Boston Limited Partnership, and to the reference
to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Jericho, New York
October 16, 1995
<PAGE>
ACCOUNTANTS' CONSENT
--------------------
The Partners
American Movie Classics Company:
We consent to the incorporation by reference in the registration
statement on Form S-3 of Cablevision Systems Corporation of our report dated
March 4, 1994, relating to the balance sheets of American Movie Classics Company
as of December 31, 1993 and 1992, and the related consolidated statements of
operations, partners' capital (deficiency) and cash flows for each of the years
in the three-year period ended December 31, 1993 and to the reference to our
firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Jericho, New York
October 16, 1995
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 1 to the Registration Statement No.
33-62313, on Form S-3, of Cablevision Systems Corporation of our report dated
April 28, 1994 (June 3, 1994 as to Note 9) relating to the financial statements
of Monmouth Cablevision, L.P., of our report dated April 28, 1994 (June 3, 1994
as to Note 8) relating to the financial statements of Riverview Cablevision
Associates, L.P. and of our report dated April 28, 1994 (June 3, 1994 as to Note
8) relating to the financial statements of Framingham Cablevision Associates,
Limited Partnership, each incorporated in this Registration Statement by
reference to the Consent Solicitation Statement/Prospectus, Form S-4 No.
33-62717 of Cablevision Systems Corporation.
We also consent to the references to us under the heading "Experts" in such
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
-------------------------
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
October 10, 1995
<PAGE>
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [__]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
Cablevision Systems Corporation
(Exact name of obligor as specified in its charter)
Delaware 11-2776686
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Media Crossways
Woodbury, New York 11797
(Address of principal executive offices) (Zip code)
______________________
Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affilia-
tion.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
- 2 -
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 3rd day of October, 1995.
THE BANK OF NEW YORK
By: /S/ MARY LAGUMINA
-------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
- 4 -
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1995, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,025,419
Interest-bearing balances .......... 881,413
Securities:
Held-to-maturity securities ........ 1,242,368
Available-for-sale securities ...... 1,774,079
Federal funds sold in domestic
offices of the bank ................ 5,503,445
Securities purchased under agree-
ments to resell .................... 200,634
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................26,599,533
LESS: Allowance for loan and
lease losses ..............516,283
Loans and leases, net of unearned
income and allowance 26,083,250
Assets held in trading accounts ...... 1,455,639
Premises and fixed assets (including
capitalized leases) ................ 612,547
Other real estate owned .............. 79,667
Investments in unconsolidated
subsidiaries and associated
companies .......................... 198,737
Customers' liability to this bank on
acceptances outstanding ............ 1,111,464
Intangible assets .................... 105,263
Other assets ......................... 1,237,264
Total assets ......................... $43,511,189
LIABILITIES
Deposits:
In domestic offices ................ $19,233,885
Noninterest-bearing .......7,677,954
Interest-bearing .........11,555,931
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,641,676
Noninterest-bearing ..........72,479
Interest-bearing .........12,569,197
<PAGE>
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,747,659
Securities sold under agreements
to repurchase .................... 73,553
Demand notes issued to the U.S.
Treasury ........................... 300,000
Trading liabilities .................. 738,317
Other borrowed money:
With original maturity of one year
or less .......................... 1,586,443
With original maturity of more than
one year ......................... 220,877
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,113,102
Subordinated notes and debentures .... 1,053,860
Other liabilities .................... 1,489,252
Total liabilities .................... 40,198,624
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,849,221
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 662)
Cumulative foreign currency transla-
tion adjustments .................. ( 3,944)
Total equity capital ................ 3,312,565
Total liabilities and equity
capital ........................... $43,511,189
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Samuel F. Chevalier
