<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
___________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 1, 1995
CABLEVISION SYSTEMS CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware
(State of Incorporation)
11-2776686 1-9046
(Commission File Number) (IRS Employer
Identification Number)
One Media Crossways, Woodbury, New York 11797
(Address of principal executive offices)
Registrant's telephone number, including area code:
(516) 364-8450
<PAGE>
Item 5. Other Events
On November 1, 1995, Cablevision Systems Corporation (the "Registrant" or
the "Company") entered into an underwriting agreement with Bear, Stearns & Co.
Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Morgan Stanley & Co. Incorporated (the "Preferred Stock Underwriters")
pursuant to which the Company agreed to sell to the Preferred Stock Underwriters
12,000,000 Depositary Shares representing 1,200,000 shares of the Company's 8
1/2% Series I Cumulative Convertible Exchangeable Preferred Stock (the "Series I
Preferred Stock") with an aggregate liquidation preference of $300,000,000. The
Company also granted the Underwriters a 30-day option to purchase up to an
additional 1,800,000 Depositary Shares representing 180,000 shares of Series I
Preferred Stock solely to cover over-allotments. The Depositary Shares will be
convertible into shares of the Company's Class A Common Stock at any time on or
after January 8, 1996 at an initial conversion price of $67.44 per share of
Class A Common Stock. The Company will apply the net proceeds of the offering of
the Depositary Shares, estimated to be $290.6 million (assuming no exercise of
the over-allotment option), to the repayment of bank indebtedness and general
corporate purposes.
On November 2, 1995, the Company entered into a purchase agreement with
Bear, Stearns & Co. Inc., Merrill Lynch & Co., Merrill Lynch Pierce Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and Toronto Dominion
Securities (USA) Inc. (the "Notes Underwriters") pursuant to which the Company
agreed to sell to the Notes Underwriters $300,000,000 of the Company's 9 1/4%
Senior Subordinated Notes due 2005 (the "Notes"). The Company will apply the net
proceeds of the offering of the Notes, estimated to be $292.2 million, to the
repayment of bank indebtedness and general corporate purposes.
The Company expects to issue the Depositary Shares and the Notes on
November 7, 1995.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
(12) Computation of Deficiency of Earnings to Fixed Charges and Fixed
Charges and Preferred Stock Dividends.
(99.1) Underwriting Agreement dated November 1, 1995 relating to the
Company's 8 1/2% Series I Cumulative Convertible Exchangeable Depositary Shares;
(99.2) Purchase Agreement dated November 2, 1995 relating to the
Company's 9 1/4% Senior Subordinated Notes due 2005;
(99.3) Form of certificate of designations relating to the Company's 8 1/2%
Series I Cumulative Convertible Exchangeable Preferred Stock;
(99.4) Form of Deposit Agreement, dated as of November 7, 1995 among the
Company, Harris Trust and Savings Bank, as depositary, and the holders from time
to time of the Depositary Receipts (incorporated by reference to Exhibit 4.4 of
the Company's Registration statement on Form 8-A relating to the Company's 8
1/2% Series I Cumulative Convertible Exchangeable Depositary Shares);
(99.5) Form of Depositary Receipt (incorporated by reference to Exhibit
4.5 of the Company's Registration statement on Form 8-A relating to the
Company's 8 1/2% Series I Cumulative Convertible Exchangeable Depositary
Shares);
(99.6) Supplemental Indenture dated as of November 1, 1995 between the
Company and The Bank of New York, Trustee to the Indenture dated as of November
1, 1995;
(99.7) Opinion of Sullivan & Cromwell relating to the validity of the
Company's 8 1/2% Series I Cumulative Convertible Exchangeable Depositary Shares;
(99.8) Opinion of Sullivan & Cromwell relating to the validity of the
Company's 9 1/4% Senior Subordinated Notes due 2005;
(99.9) Opinion of Sullivan & Cromwell relating to certain tax
considerations relating to the Company's 8 1/2% Series I Cumulative Convertible
Exchangeable Depositary Shares.
(99.10) Form of Company's 9 1/4% Senior Subordinated Notes due 2005.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Barry J. O'Leary
-------------------------------
Barry J. O'Leary
Senior Vice President, Finance
and Treasurer
Dated: November 6, 1995
-3-
<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>
Nine Months Ended
September 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................. $(237,118) $(178,732) $(315,151) ($246,782) ($250,503) $(227,199) $(271,375)
Add:
Fixed charges per (B)
below...................... 242,631 193,196 269,627 238,109 199,661 264,039 268,491
Amortization of previously
capitalized interest....... 56 111 148 138 74 75 74
Deduct:
Interest capitalized
during period.............. -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Earnings for computation
purposes (A)............... $ 5,569 $ 14,575 $ (45,376) $ (8,535) $ (50,768) $ 36,915 $ (2,810)
========= ========= ========= ========= ========= ========= =========
Fixed Charges:
Interest on indebtedness,
expensed or capitalized,
including amortization
of debt expense............ 236,680 188,724 263,299 232,434 194,628 258,794 263,564
Portion of rents
representative of the
interest factor............ 5,951 4,472 6,328 5,675 5,033 5,245 4,927
--------- --------- --------- --------- --------- --------- ---------
Fixed charges for
computation purposes (B).... $ 242,631 $ 193,196 $ 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..................... $(237,062) $(178,621) $(315,003) $(246,644) $(250,429) $(227,124) $(271,301)
========= ========= ========= ========= ========= ========= =========
Preferred stock
dividends (C)............... $ 7,272 $ 4,098 $ 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............. $(244,334) $(182,719) $(321,388) $(247,529) $(251,314) $(231,588) $(275,366)
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
EXHIBIT 99.1
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
Depositary Shares Each Representing
a One-Tenth Interest in a Share of
8-1/2% Series I Cumulative Convertible Exchangeable Preferred Stock
UNDERWRITING AGREEMENT
----------------------
Dated: November 1, 1995
<PAGE>
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
Depositary Shares Each Representing
a One-Tenth Interest in a Share of
8-1/2% Series I Cumulative Convertible Exchangeable Preferred Stock
UNDERWRITING AGREEMENT
----------------------
November 1, 1995
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
MORGAN STANLEY & CO. INCORPORATED
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
CABLEVISION SYSTEMS CORPORATION, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto (the
("Underwriters") up to 13,800,000 depositary shares (the "Depositary Shares")
evidenced by depositary receipts (the "Depositary Receipts"), and each
Depositary Share shall represent a one-tenth interest in a share of the
Company's 8-1/2% Series I Cumulative Convertible Exchangeable Preferred Stock,
par value $.01 per share (the "Preferred Stock"). The Company hereby agrees to
sell to the Underwriters on the terms and conditions stated herein and in
Schedule II hereto 12,000,000 Depositary Shares (the "Firm Shares") in the
respective amounts set forth opposite their names in Schedule I hereto, and, for
the sole purpose of covering over-allotments in connection with the sale of the
Depositary Shares at the option of the Underwriters up to an additional
1,800,000 Depositary Shares (the "Additional Shares" and together with the Firm
Shares, the "Shares") on the terms and conditions stated herein and in Schedule
II hereto. As used herein, unless the context otherwise requires, the term
"you" shall mean the Underwriters.
Immediately following the issuance of the shares of the Preferred Stock by
the Company, the Company will deposit such shares with Harris Trust and Savings
Bank, as Depositary (the "Depositary"), pursuant to the Deposit Agreement among
the Company, the
<PAGE>
2
Depositary and the holders of Depositary Receipts in the form previously
delivered to you, dated as of November 7, 1995 (the "Deposit Agreement").
The Depositary Shares are exchangeable, as set forth in the certificate of
designations relating to the Preferred Stock represented by the Depositary
Shares (the "Certificate of Designations"), at the Company's option, for the
Company's 8-1/2% Convertible Subordinated Debentures due 2007 (the "Exchange
Debentures"). The Exchange Debentures, if any, will be issued pursuant to an
indenture to be dated as of November 1, l995, as supplemented by a supplemental
indenture to be dated as of November 1, l995 (as so supplemented, the "Exchange
Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee"). The Depositary Shares will and the Exchange Debentures, if any,
will be convertible, at the option of the holder, into Class A Common Stock of
the Company, par value $.01 per share (the "Class A Common Stock"). The
Preferred Stock, the Exchange Debentures, the Depositary Shares and the shares
of Class A Common Stock issuable upon conversion of any of the foregoing
(collectively, the "Securities") are more fully described in the Prospectus (as
hereafter defined). Capitalized terms used herein without definition have the
respective meanings specified in the Prospectus.
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 the
Depositary Shares, 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
Depositary Shares, 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 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.
<PAGE>
3
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 each
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 each 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 is 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.
<PAGE>
4
(iv) This Agreement has been duly authorized, executed and delivered by
the Company.
(v) Each of the Exchange Indenture and the Deposit Agreement at each
Closing Time (as defined below) will have been duly authorized by the
Company, will be substantially in the form heretofore delivered to you and,
when duly executed and delivered by the Company and the other parties
thereto will constitute a valid and legally 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 equity principles (regardless of
whether enforcement is considered in a proceeding in equity or at law); and
the form of Exchange Indenture conforms in all material respects to the
description thereof contained in the Prospectus.
(vi) When executed, authenticated and issued in the manner provided
for in the Exchange Indenture and delivered in exchange for the Depositary
Shares, the Exchange Debentures will be duly authorized and will constitute
valid and legally binding obligations of the Company entitled to the
benefits of the Exchange 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 equity
principles (regardless of whether enforcement is considered in a proceeding
in equity or at law); and the form of Exchange Debentures conforms in all
material respects to the description thereof contained in the Prospectus.
(vii) 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
<PAGE>
5
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.
(viii) 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.
(ix) 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.
(x) 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
<PAGE>
6
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.
(xi) 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 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.
(xii) The Company had at the date indicated a duly authorized and
outstanding capitalization as set forth in the Prospectus under the caption
"Capitalization - Historical"; the Preferred Stock, the Depositary Shares,
the Exchange Debentures and the Class A Common Stock will, upon their
respective issuances, conform in all material respects to the description
thereof contained in the Prospectus.
(xiii) The Preferred Stock, represented by the Depositary Shares, has
been duly authorized and, when such Depositary Shares are issued and
delivered against payment therefor as provided herein, such Preferred Stock
will be validly issued, fully paid and non-assessable; no holder of the
Preferred Stock or the Depositary Shares will be subject to personal
liability by reason of being such a holder; such Preferred Stock is not
subject to the preemptive rights of any stockholder of the Company; all
corporate action required to be taken by the Company for the authorization,
issuance and sale of such Preferred Stock and Depositary Shares will at the
time of the issuance thereof have been validly and sufficiently taken; such
Depositary Shares shall, at the time of deposit of the Preferred Stock with
the Depositary, represent the Preferred Stock free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind;
the Preferred Stock will be convertible into Class A Common Stock in
accordance with its terms and the terms of the Certificate of Designations;
and the Exchange Debentures, if and when issued, will be convertible
<PAGE>
7
into Class A Common Stock in accordance with their terms and the terms of
the Exchange Indenture.
(xiv) The Class A Common Stock issuable upon conversion of the
Preferred Stock pursuant to the terms of the Certificate of Designations,
at the time of issuance of the Preferred Stock, and the Class A Common
Stock issuable upon conversion of the Exchange Debentures pursuant to the
terms of the Exchange Indenture, at the time of issuance of such Exchange
Debentures, will have been duly authorized and validly reserved for
issuance upon such conversion by all necessary corporate action and such
Class A Common Stock, when issued upon such conversion, will be validly
issued, fully paid and non-assessable; and no holder thereof will be
subject to personal liability by reason of being such a holder.
(xv) 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.
(xvi) 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) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock.
(xvii) 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 the Exchange Indenture, the
Certificate of
<PAGE>
8
Designations, the Deposit Agreement and this Agreement (collectively, the
"Operative Documents"), the issuance, sale and delivery of the Preferred
Stock, the consummation by the Company of the transactions contemplated by
this Agreement and the compliance by the Company with the terms of this
Agreement and the Deposit Agreement at each Closing Time shall 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, and, the issuance and delivery of the Class A Common Stock
upon conversion of the Depositary Shares, the issuance and delivery of the
Exchange Debentures upon exchange of the Depositary Shares, the issuance
and delivery of the Class A Common Stock upon conversion of the Exchange
Debentures and the compliance by the Company with the terms of the Exchange
Indenture, at the time of such respective issuance and delivery, will have
been duly authorized by all necessary corporate action on the part of the
Company, and will not result in any violation of the charter or by-laws of
the Company or any Subsidiary, 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).
<PAGE>
9
(xviii) The statements in the Prospectus under "Risk Factors",
"Description of Series I Preferred Stock", "Description of Exchange
Debentures", "Description of Depositary Shares", "Description of Capital
Stock -- Class A Common Stock and Class B Common Stock" and "Recent
Developments -- Impact of Pending Telecommunications Legislation on 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.
(xix) 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
(1) for the valid authorization, issuance, sale and delivery in the United
States of (a) the Preferred Stock, (b) the Depositary Shares, (c) the Class
A Common Stock issuable upon conversion of the Depositary Shares, or (d)
the Exchange Debentures issuable upon exchange of the Depositary Shares or
(2) for the execution, delivery or performance of this Agreement, the
Deposit Agreement or the Exchange Indenture by the Company except for the
filing of the Certificate of Designations with the Secretary of State of
the State of Delaware and for any other 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.
(xx) 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.
<PAGE>
10
(xxi) 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.
(xxii) 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.
(xxiii) 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.
(xxiv) 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 Depositary Shares 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
<PAGE>
11
purchase price to the Underwriters set forth in Schedule II, the principal
amount of Firm Shares set forth opposite the name of such Underwriter in
Schedule I plus any additional number of Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of, the Firm
Shares 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. on such date 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 "Initial Closing Time"). Payment shall be
made to the Company in the manner specified in Schedule II hereto, against
delivery of the Firm Shares to you for the respective accounts of the several
Underwriters, which Firm Shares are to be deposited by you with the Depositary
pursuant to the Deposit Agreement. Depositary Receipts evidencing such
Depositary Shares that represent the Firm Shares shall be in such denominations
and registered in such names as you may request in writing at least two full
business days before the Initial Closing Time. Such Depositary Receipts 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 Initial Closing Time.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to 1,800,000 Additional Shares at the same purchase price
per share to be paid by the Underwriters to the Company for the Firm Shares as
set forth in this Section 2, for the sole purpose of covering over-allotments in
the sale of Depositary Shares representing the Firm Shares by the Underwriters.
This option may be exercised at any time, in whole or in part (but not more than
once), on or before the thirtieth day following the date of the Prospectus
Supplement, by written notice by you to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time of delivery being
herein sometimes referred to as the "Additional Closing Time"; the Initial
Closing Time and the Additional Closing Time are each hereafter referred to as a
"Closing Time"); provided, however, that the Additional Closing Time shall not
be earlier than the Initial Closing Time in respect of the Firm Shares or
earlier than the second full business day after the date on which the option
shall have been exercised nor later than the eighth full business day after the
date on which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof).
Depositary Receipts evidencing the Depositary Shares that represent the
Additional Shares shall be registered in such names and in such denominations as
you may request in writing at least two full business days prior to the
Additional Closing Time and such certificates will be made available for
examination and packaging by you not later than 10:00 A.M. on the business day
prior to the Additional Closing Time.
<PAGE>
12
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to 12,000,000, subject, however, to such adjustments
to eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made to the Company in the
manner specified in Schedule II hereto against delivery to you of the Additional
Shares, to be purchased by you and deposited by you with the Depositary pursuant
to the Deposit Agreement, for the respective accounts of the Underwriters.
Section 3. Certain Covenants of the Company. The Company covenants
--------------------------------
with each Underwriter as follows:
(a) 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
Preferred Stock represented by the Depositary Shares and their respective
terms, the name of each Underwriter participating in the offering and the
number of shares of the Depositary Shares 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
Depositary Shares are to be purchased by the Underwriters from the Company,
any initial public offering price of the Depositary Shares, any selling
concession and reallowance, and such other information as you and the
Company deem appropriate in connection with the offering of the Depositary
Shares. 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) The Company will file the Certificate of Designations with the
Secretary of State of the State of Delaware on or prior to the Initial
Closing Time.
(c) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Depositary Shares, the
Company will, subject to Section 3(d), 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.
(d) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Depositary Shares, the
Company will
<PAGE>
13
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 shall reasonably
object.
(e) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Depositary Shares, 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 Depositary Shares 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.
(f) 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
Depositary Shares) 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.
(g) The Company will use its reasonable best efforts, in cooperation
with the Underwriters, to qualify the Depositary Shares, the Class A Common
Stock and the Exchange Debentures 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
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Company shall not be obligated to file any general
<PAGE>
14
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 Depositary Shares, the Class A Common Stock and
the Exchange Debentures 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 Depositary Shares for investment under
the laws of such jurisdictions as you may reasonably request.
(h) 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.
(i) 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. If at any time when the
Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Depositary Shares any event shall occur or condition exist as
a result of which it is necessary 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 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(d), 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.
(j) The Company will use the net proceeds received by it from the sale
of the Depositary Shares in the manner specified in the Prospectus under
the caption "Use of Proceeds".
(k) For a period of three years after the Initial Closing Time, the
Company will furnish to you copies of all annual reports, quarterly reports
and current reports
<PAGE>
15
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.
(l) The Company will not be or become, at any time prior to the
expiration of three years after the Initial Closing Time, an open-end
investment trust, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(m) The Company will not, without the prior written consent of the
Underwriters, offer, sell, contract to sell or otherwise dispose of any
Class A Common Stock (except for shares issuable in connection with the
acquisition of Cablevision of Boston described under "Recent Developments"
in the Prospectus Supplement or issuable upon conversion of securities or
exercise of warrants and options outstanding as of the date of the
Prospectus Supplement or pursuant to employee benefit plans) or preferred
stock (except for any Series D Preferred Stock, Series H Preferred Stock or
the preferred stock to be issued in the Proposed V Cable Transactions) or
warrants, rights or options exercisable at any time therefor for a period
of 90 days after the date of this Prospectus Supplement.
(n) The Company will use its reasonable best efforts to effect the
listing of the Depositary Shares and the Class A Common Stock issuable in
respect thereof on the American Stock Exchange by the Initial Closing Time.
(o) Upon issuance and delivery, if any, of the Exchange Debentures,
the Exchange Debentures will be convertible at the option of the holder
into Class A Common Stock in accordance with the terms of the Exchange
Debentures and the Exchange Indenture, and the Class A Common Stock
issuable upon conversion of the Exchange Debentures will have been duly
authorized and validly reserved for issuance upon such conversion by all
necessary corporate action, and such Class A Common Stock, when issued upon
such conversion, will be validly issued, fully paid and non-assessable.
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 Exchange Indenture, the Deposit Agreement,
the Certificate of Designations, the Preferred Stock, the Depositary Shares, the
Depositary Receipts, the
<PAGE>
16
certificates representing the Class A Common Stock, the Exchange Debentures and
the Blue Sky Survey, (c) the delivery of the Preferred Stock to the Underwriters
and the delivery of the Depositary Receipts evidencing the Depositary Shares to
the Underwriters, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Preferred Stock, the Exchange
Debentures and the Class A Common Stock issuable upon the conversion thereof
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 connection with the Blue Sky
Survey, (f) the fees and expenses of the Trustee, the Depositary and any
transfer agent and registrar, including the fees and disbursements of counsel
for the Trustee, the Depositary and any transfer agent and registrar and (g) the
listing fees and expenses incurred in connection with listing the Depositary
Shares and the Class A Common Stock issuable upon conversion thereof or of the
Exchange Debentures on the American Stock Exchange.
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 Firm Shares and the Additional Shares, if any, at
each Closing Time, that they have respectively agreed to purchase hereunder are
subject to the accuracy, as of such Closing Time, 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 such 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 such Closing Time, you shall have received a signed opinion of
Sullivan & Cromwell, counsel for the Company, dated as of such 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 Exchange Indenture has been duly authorized, executed
and delivered by the Company and duly qualified under the 1939 Act;
and the Exchange Indenture does, and the Exchange Debentures, when
duly authorized by the Company and when duly authenticated, issued and
delivered in the
<PAGE>
17
manner provided for in the Exchange Indenture will, constitute valid
and legally binding obligations of the Company enforceable 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) Upon issuance and delivery of the Preferred Stock sold by
the Company at such Closing Time pursuant to the terms of this
Agreement, such Preferred Stock shall be convertible at the option of
the holder into Class A Common Stock in accordance with the terms of
the Company's Certificate of Incorporation; the shares of Class A
Common Stock initially issuable upon conversion of the Preferred Stock
have been duly authorized and reserved for issuance upon such
conversion, and such Class A Common Stock, when issued upon such
conversion, will be validly issued, fully paid and non-assessable; the
issuance of such shares upon such conversion will not be subject to
preemptive rights of any stockholder of the Company under the
Company's Certificate of Incorporation, By-laws or the Delaware
General Corporation Law, in each case as in effect as of the Initial
Closing Time, and no holder thereof will be subject to personal
liability under the Company's Certificate of Incorporation, By-laws or
the Delaware General Corporation Law, in each case as in effect as of
the Initial Closing Time, by reason of being such a holder.
(iv) The Preferred Stock sold by the Company pursuant to the
provisions of this Agreement on such Closing Time has been duly
authorized and validly issued and is fully paid and non-assessable; 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; such
Preferred Stock is 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.
(v) The execution and delivery of this Agreement, the Deposit
Agreement and the Exchange Indenture by the Company, the issuance,
sale and delivery by the Company of the Depositary Shares to the
Underwriters, the issuance and delivery of the Class A Common Stock
upon conversion of the Depositary Shares, and the compliance by the
Company with the terms of this Agreement and the Deposit Agreement do
not and will not result in any violation of the Certificate of
Incorporation or By-laws of the Company, in each case as in effect as
of the Initial Closing Time; 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
<PAGE>
18
for the issuance, sale and delivery of the Depositary Shares by the
Company to the Underwriters have been obtained or made.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) the Deposit Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Depositary, constitutes a legal,
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.
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
such 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, 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
<PAGE>
19
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 such
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
Series I Preferred Stock", "Description of Exchange Debentures",
"Description of Depositary Shares", "Description of Common Stock -- Class A
Common Stock and Class B Common Stock" and "Underwriting" 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 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.
(c) At such 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
<PAGE>
20
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) The number of authorized shares of Capital Stock of the
Company is as set forth in the Prospectus under the heading
"Capitalization".
(v) 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.
(vi) 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.
(vii) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to such 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
<PAGE>
21
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 as of the date of the
Prospectus Supplement or as of such Closing Time contained or contains
an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(viii) 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.
(ix) 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.
(x) The execution and delivery by the Company of the Operative
Documents, the issuance, sale and delivery of the Depositary Shares
sold by the Company pursuant to the provisions of this Agreement on
such Closing Time, the issuance and delivery of the Class A Common
Stock upon conversion of the Depositary Shares, the consummation by
the Company of the transactions contemplated by this Agreement and the
compliance by the Company with the terms of this Agreement and the
Deposit 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 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
<PAGE>
22
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 Depositary Shares, 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 Depositary Shares by the Underwriters.
(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; 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 such Closing Time you shall have received a signed opinion of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as special
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>
23
(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 the information
shown.
(iii) The information in the Registration Statement and
Prospectus under the captions "Risk Factors -- Risk Related to Cable
Regulation", "Risk Factors -- Risk of Competition", "Risk Factors --
Competition from Telephone Companies" and in the 1994 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
applicable to the Company and its subsidiaries as disclosed in the
Prospectus.
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.
(e) An opinion, dated the Closing Time, of counsel for the Depositary,
in form and substance satisfactory to the Underwriter and its counsel, to
the effect that:
(i) The Depositary has been duly organized and is validly
existing as an Illinois banking corporation in good standing under
applicable law, with full power, authority and legal right under such
law to execute, deliver and carry out the terms of the Deposit
Agreement; and
(ii) The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary, and assuming due authorization, execution
and delivery thereof, by the Company, the Deposit Agreement
constitutes a legal, valid and binding obligation of the Depositary,
enforceable against the Depositary in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws
<PAGE>
24
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Depositary Receipts have been duly
authorized, executed and delivered by the Depositary pursuant to the
Deposit Agreement.
(f) At such Closing Time, you shall have received the favorable
opinion of Shearman & Sterling, counsel for the Underwriters, dated as of
such 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 Preferred Stock sold by the Company
pursuant to this Agreement, this Agreement, the Deposit Agreement, the
Exchange 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.
(g) At such Closing Time, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the 1933 Act and
the 1933 Act Regulations and, 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 such 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 such Closing Time. At such Closing Time,
you shall have received a certificate of the Chief Executive Officer, the
<PAGE>
25
President, a Vice Chairman or a Vice President, and the Treasurer or
Controller, of the Company, dated as of such Closing Time, to such effect.
(h) 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 such Closing Time, as well as a
letter from Deloitte & Touche LLP dated as of the date hereof substantially
in the form annexed to Schedule III.
(i) 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.
(j) At such 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 Preferred Stock and the Depositary Shares as
herein contemplated and the matters referred to in Section 5(f) 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.
(k) At such Closing Time, the Depositary Shares and the Class A Common
Stock issuable upon conversion thereof have been duly authorized for
listing by the American Stock Exchange.
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 such Closing Time, and such termination shall be without liability of
any party to any other party. 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),
<PAGE>
26
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;
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 Depositary Shares 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
its obligations hereunder to furnish the Underwriters with copies of the
Prospectus.
<PAGE>
27
(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, 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 Depositary
Shares bears to the purchase price of the Depositary Shares, 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.
<PAGE>
28
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 Depositary Shares.
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 Depositary Shares or
enforce contracts for the sale of the Depositary Shares or (iii) if trading in
any securities of the Company has been suspended by the Commission, the National
Association of Securities Dealers, Inc. or the American Stock Exchange, or if
trading generally on 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) 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 Initial Closing Time or on the Additional Closing Time, as the case may
be, to purchase the Firm Shares or Additional Shares hereunder that it or they
are obligated to purchase (the "Defaulted Depositary Shares"), 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 Depositary Shares 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 Defaulted Depositary Shares does not
exceed 10% of the aggregate number of shares of the Firm Shares or
Additional Shares, as the case may be, to be purchased pursuant to this
Agreement, the non-defaulting Underwriters shall be obligated to purchase
the full amount thereof in the respective proportions that the number of
Firm Shares or Additional Shares set
<PAGE>
29
forth opposite the names of such non-defaulting Underwriters in Schedule I
bear to the total aggregate number of shares of Firm Shares or Additional
Shares set forth opposite the names of such non-defaulting Underwriters, or
(b) if the aggregate number of Defaulted Depositary Shares exceeds 10%
of the aggregate number of Firm Shares or Additional Shares 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 under this
-------
Agreement 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 you shall be directed to you, c/o Bear, Stearns & Co. Inc., 245 Park
Avenue, New York, New York, attention of Stephen M. Parish; and 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.,
Executive Vice President, General Counsel and Secretary, with a copy to Sullivan
& Cromwell, at 125 Broad Street, New York, New York 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 Depositary Shares.
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.
<PAGE>
30
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>
31
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:
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
MORGAN STANLEY & CO. INCORPORATED
c/o Bear, Stearns & Co. Inc.
By: Bear, Stearns & Co. Inc.
By
---------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
to Underwriting Agreement
Dated: November 1, 1995
CABLEVISION SYSTEMS CORPORATION
Depositary Shares Each Representing
a One-Tenth Interest in a Share of
Series I Cumulative Convertible Exchangeable Preferred Stock
<TABLE>
<CAPTION>
Number of
Shares
Underwriter to be Purchased
----------- ---------------
<S> <C>
Bear, Stearns & Co. Inc............................. 6,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.. 3,000,000
Morgan Stanley & Co. Incorporated................... 3,000,000
----------
Total..................................... 12,000,000
==========
</TABLE>
<PAGE>
SCHEDULE II
to Underwriting Agreement
Dated: November 1, 1995
CABLEVISION SYSTEMS CORPORATION
Depositary Shares Each Representing
a One-Tenth Interest in a Share of
Series I Cumulative Convertible Exchangeable Preferred Stock
Number of Depositary Shares: 12,000,000
Initial public offering price: $25.00 per Depositary Share
Purchase price: $ 24.25 per Depositary Share plus accrued dividends, if any,
from November 7, 1995 to the date of payment and delivery
Method of payment: Payment shall be made by wire transfer of immediately
available funds to an account designated by the Company (provided that the
Company shall reimburse the Underwriters, no later than the day following the
Closing Time, for their overnight funding costs associated with providing the
Company with immediately available funds (at a rate equal to the federal funds
rate in effect on the date of closing) by wire transfer of immediately available
funds to an account specified by Bear, Stearns & Co. Inc.)
Closing date, time and location: November 7, 1995 at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022
Listing requirement: in respect of the Depositary Shares and the Class A Common
Stock issuable upon conversion thereof, the American Stock Exchange
Underwriters' option to purchase additional shares from the Issuer: 1,800,000
Depositary Shares
<PAGE>
SCHEDULE III
to Underwriting Agreement
Dated: November 1, 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/1/
-----------------------
(* - material subsidiary)
-------------------------
CSC Acquisition Corporation
CSC Acquisition - MA, Inc.
CSC Acquisition - NY, Inc.
Cablevision Area 9 Corporation/2/
Cablevision Fairfield Corporation/2/
Cablevision Finance Corporation
Cablevision Finance Limited Partnership
Cablevision Lightpath, Inc.
Cablevision of Cleveland G.P., Inc.
Cablevision of Cleveland L.P., Inc.
Cablevision of Cleveland, L.P.
Cablevision of Connecticut Corporation/2/
Cablevision of Connecticut Limited Partnership/2/
Cablevision of Michigan, Inc.
Cablevision of New Jersey, Inc./3/
* Cablevision of New York City - Master L.P./4/
* Cablevision of New York City - Phase I L.P./4/
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/4/
Cablevision Systems Suffolk Corporation
Cablevision Systems Westchester Corporation
Cablevision Systems of Southern Connecticut Limited Partnership/2/
Communications Development Corporation/2/
* NYC GP Corp.
* NYC LP Corp.
______________
1 Unless otherwise noted, all shares are pledged under the terms of the Third
Amended and Restated Security Agreement, dated as of July 15, 1988, as
amended, among Cablevision Systems Corporation, certain Securing Parties
and Toronto-Dominion (Texas), Inc. as Security Agent.
2. All shares or partnership interests are pledged under the terms of the
Connecticut Consent dated as of July 15, 1988 among Cablevision of
Connecticut Limited Partnership, Cablevision Systems of Southern
Connecticut Limited Partnership, CSC and Chase Manhattan Bank as
Predecessor Security Agent and Toronto-Dominion Bank Trust Company as
Security Agent (the "Connecticut Security Documents") under the Third
<PAGE>
IV-2
Amendment and Restated Security Agreement, as amended, as referenced in No.
1 above.
3. All shares pledged under the Security Agreement dated as of May 18, 1990
between Cablevision of New Jersey, Inc. and Toronto-Dominion Bank Trust
Company as Security Agent.
4. All partnership interests pledged under the Fourth Amended and Restated
Security Agreement, dated as of June 18, 1993, among Cablevision of New
York City - Phase I L.P., Cablevision of New York City - Master L.P.,
Cablevision Systems New York City Corporation, the Banks and Chase
Manhattan Bank, as Agent.
<PAGE>
SCHEDULE V
to Underwriting Agreement
UNRESTRICTED SUBSIDIARIES
-------------------------
(* - material subsidiary)
-------------------------
111 New South Road Corporation
1144 Route 109 Corp.
A-R Cable Investments, Inc./1/
A-R Cable Partners
AMC Productions, Inc./2/
* American Movie Classics Holding Corporation
* American Movie Classics Company
* Arsenal MSub 2, Inc./3/
Arsenal MSub 7, Inc.
Bravo Company
Bravo Programming, Inc.
CSC Gateway Corporation/4/
CSC Investments, Inc.
CSC Realty, Inc.
CSC Transport, Inc.
Cable Networks, Inc.
Cablevision Lightpath - CT, Inc.
Cablevision Lightpath - NJ Inc.
Cablevision Lightpath - NY, Inc.
Cablevision Lightpath - OH, Inc.
* Cablevision MFR, Inc./5/
Cablevision of Brookline, Inc.
Cablevision of Hudson County, Inc. (f/k/a Cablevision of
Riverview, Inc.)/6/
* Cablevision of Monmouth, Inc./6/
Cablevision of Nashoba, Inc.
Cablevision Programming Incorporated
Cablevision Programming New England Corporation
Cablevision Systems Ohio Investment Corporation/3/
Cablevision of Geauga County/3/
Cablevision of Ohio, Ltd./3/
Cablevision of the Midwest Holding Co., Inc./3/
Cablevision of the Midwest, Inc./3/
Cleveland Radio Holdings, Inc.
COB, Inc.
Complexicable of Cuyahoga Valley, Ltd./3/
CV Radio Associates, L.P.
Garden L.P. Holding Corp./7/
In Court Holding Corporation
Missouri Cable Partners, L.P.
<PAGE>
V-2
MuchMusic U.S.A. Venture
NCC LP Corp.
Neighborhood News Holdings, Inc./7/
News 12 Holding Corporation/7/
News 12 New Jersey L.L.C.
Northern Ohio Interconnect
Ohio Cablevision Investors, Ltd./3/
PS Holding Acquisition Corporation
* Petra Cablevision Corp./3/
Rainbow Advertising Sales Corporation/7/
Rainbow CT Holdings, Inc./7/
Rainbow NJ Holdings, Inc./7/
Rainbow Garden Corp.
Rainbow MM Holdings Corporation
Rainbow Network Communications
Rainbow News 12 Company/7/
Rainbow PPV Holdings, Inc.
Rainbow Program Enterprises
Rainbow Programming Holdings, Inc./8/
Rainbow Programming Services Company
Rainbow Travel, Inc./7/
Rainbow Westchester Holdings, Inc./7/
Samson Cablevision Corp./3/
Shamrock Cable Corporation/3/
Shamrock Cleveland Cablevision, L.P./3/
Shamrock Cuyahoga County Cablevision Associates, L.P./3/
Shamrock Ohio Cablevision Associates, L.P./3/
Space Cable of Ohio, Ltd./3/
Space Cable of Strongsville, Ltd./3/
SportsChannel America Soccer, Inc.
SportsChannel Associates/7/
SportsChannel Associates Holding Corporation/7/
SportsChannel Bay Area Holding Corporation
SportsChannel Cincinnati Associates
SportsChannel Cincinnati Holding Corporation
SportsChannel Florida Associates
SportsChannel Florida Holding Partnership
SportsChannel Los Angeles Holding Corporation
SportsChannel New England Holding Limited Partnership
SportsChannel New York Holding Partnership/7/
SportsChannel Ohio Associates
SportsChannel Ohio Holding Corporation
SportsChannel Prism/Chicago Holding Partnership
SportsChannel Ventures, Inc./7/
Suffolk Cable Corporation/3/
Suffolk Cable of Shelter Island, Inc./3/
<PAGE>
V-3
Suffolk Cable of Smithtown, Inc./3/
Telerama, Inc./3/
The Racing Network, Inc./7/
The Singles Network, Inc/7/
* VC Holding, Inc./9/
V-C Mo. G.P., Inc./9/
V Cable GP, Inc./9/
* V Cable, Inc./10/
WKNR, Inc.
___________
1 All of the shares of A-R Cable Investments, Inc. are pledged to Warburg,
Pincus Investors, L.P. ("Warburg") under the terms of a Pledge Agreement
between the CSC and Warburg, dated as of May 11, 1992.
2 All of the shares of AMC Productions, Inc. are pledge to Toronto-Dominion
under the terms of a Stock Pledge Agreement, dated as of June 26, 1992,
among American Movie Classic Holding Company and Toronto-Dominion (Texas),
Inc. as agent for the Banks.
3 All of the shares of capital stock or partnership interest (as the case may
be) of Arsenal MSub 2, Inc., Arsenal MSub 7, Inc., Cablevision Systems Ohio
Investment Corporation, Cablevision of Geauga County, Cablevision of Ohio,
Ltd. Cablevision of the Midwest Holding Co., Inc., Cablevision of the
Midwest, Inc., Complexicable of Cuyahoga Valley, Ltd. Ohio Cablevision
Investors, Ltd., Petra Cablevision Corp., Samson Cablevision Corp.,
Shamrock Cable Corporation, Shamrock Cable of Brooklyn, Inc., Shamrock
Cable of Hinckley, Inc., Shamrock Cleveland Cablevision, L.P., Shamrock
Cuyahoga County Cablevision Associates, L.P., Shamrock Ohio Cablevision
Associates, L.P., Space Cable of Ohio, Ltd., Space Center of Strongsville,
Ltd., Suffolk Cable Corporation, Suffolk Cable of Shelter Island, Inc.,
Suffolk Cable of Smithtown, Inc. and Telerama, Inc. are pledged to GECC
under the terms of a Newco Group Pledge Agreement, dated as of December 31,
1992, among VC Holding, Inc., the direct and indirect subsidiaries of VC
Holding, Inc. and GECC.
4 All of the shares of CSC Gateway Corporation are pledged pursuant to a
Security Agreement between Cablevision of Newark and Toronto-Dominion Bank
Trust Company, dated as of April 15, 1992.
5 All of the shares of Cablevision MFR, Inc. are held by NationsBank of
Texas, N.A. under the terms of a Safekeeping Agreement between Cablevision
Systems Corporation and NationsBank of Texas, N.A. dated as of August 8,
1994.
6 All of the shares Cablevision of Monmouth, Inc. and Cablevision of Hudson
County, Inc. (f/k/a Cablevision of Riverview, Inc.) are pledged under the
terms of the Pledge Agreement between Cablevision MFR, Inc. and NationsBank
of Texas, N.A., dated as of August 8, 1994.
<PAGE>
V-4
7 All of the capital stock of partnership interest (as the case may be) of
Garden L.P. Holding Corp., Rainbow Advertising Sales Corporation, The
Singles Network, Inc., The Racing Network, Inc., Neighborhood News
Holdings, Inc., News 12 Holding Corporation, Rainbow CT Holdings, Inc.,
Rainbow NJ Holdings, Inc., Rainbow Travel, Inc., Rainbow Westchester
Holdings, Inc., Sportschannel Associates Holding Corporation, SportsChannel
Ventures, Inc., SportsChannel Associates, SportsChannel New York Holding
Partnership, Rainbow News 12 Company and Rainbow Program Enterprises are
pledged to Toronto-Dominion under the terms of a Borrower Pledge Agreement,
dated as of January 27, 1995, among Rainbow Programming Holdings, Inc.,
Toronto-Dominion (Texas), Inc. as administrative agent for the Co-Agents
and the Banks.
8 All of the shares of Rainbow Programming Holdings, Inc. are pledged to
Toronto-Dominion under the terms of the Stock Pledge Agreement among
Cablevision Systems Corporation, Toronto-Dominion (Texas), Inc. as
administrative agent and the Banks.
9 All of the shares of capital stock of VC Holding, Inc., V-C Mo. G.P., Inc.
and V Cable GP, Inc. are pledged to GECC under the terms of a V Cable Group
Pledge Agreement, dated as of December 31, 1992 among V Cable, Inc., V-C
Mo. G.P., Inc., and GECC. 81% of the capital stock of VC Holding, Inc. is
owned by V Cable, Inc.
10 All of the shares of Common Stock of V Cable, Inc. are pledged to GECC
under the terms of a CSC Non-Recourse Guaranty and Pledge Agreement between
the Company and GECC, dated as of December 31, 1992.
<PAGE>
EXHIBIT 99.2
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
9-1/4% Senior Subordinated Notes
due 2005
PURCHASE AGREEMENT
------------------
Dated: November 2, 1995
<PAGE>
CABLEVISION SYSTEMS CORPORATION
(a Delaware corporation)
9-1/4% Senior Subordinated Notes
due 2005
PURCHASE AGREEMENT
------------------
November 2, 1995
To the Underwriters named in Schedule I
Ladies and Gentlemen:
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 November 1, 1995 (the
"Subordinated Indenture") between the Company and The Bank of New York, as
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 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
<PAGE>
2
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 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.
<PAGE>
3
(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 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
<PAGE>
4
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.
(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.
<PAGE>
5
(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 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
<PAGE>
6
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.
(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) 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 the
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
<PAGE>
7
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).
(xvi) The statements in the Prospectus under "Risk Factors",
"Description of Debt Securities", "Description of the Notes" and "Recent
Developments- Impact of Pending Telecommunications Legislation on 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,
<PAGE>
8
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
Designated Indenture and 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.
(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
<PAGE>
9
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.
(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
<PAGE>
10
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 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, 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) 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 material terms, the name of each Underwriter
participating in the offering and the principal amount of the Offered
Securities that each severally has
<PAGE>
11
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 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
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.
<PAGE>
12
(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
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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. If at any time when the
Prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered
<PAGE>
13
Securities any event shall occur or condition exist as a result of which it
is necessary 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 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) The Company will not be or become, at any time prior to the
expiration of three years after the Closing Time, an open-end investment
trust, unit investment trust or face-amount certificate company that is or
is required to be registered under Section 8 of the Investment Company Act
of 1940, as amended (the "Investment Company Act").
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 and 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(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, (f) any fees charged by rating agencies for
rating the Offered Securities and (g) the
<PAGE>
14
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 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
<PAGE>
15
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 referred to above, considered in the light of such counsel's
understanding of the applicable law (including the requirements
<PAGE>
16
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", "Description of the Notes" and
"Underwriting" 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
<PAGE>
18
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 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, 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
<PAGE>
19
Federal or New York State governing body having 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.
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 1994 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 Underwriter, 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 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 Designated Indenture, the Registration Statement, the Prospectus, the
<PAGE>
21
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, shall contain all
statements that are required to be stated therein under the 1933 Act and
the 1933 Act Regulations and 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, as well as a
letter from Deloitte & Touche LLP dated as of the date hereof substantially
in the form annexed to Schedule III.
(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 1933 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.
<PAGE>
22
(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 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
<PAGE>
23
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;
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
its obligations hereunder to furnish the Underwriters with copies of the
Prospectus.
(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
<PAGE>
24
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, 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 initial public offering 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
<PAGE>
25
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 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 Offered 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
<PAGE>
26
any standard form of telecommunication. Notices to the Underwriters shall be
directed to you, c/o Merrill Lynch & Co., World Financial Center, North Tower -
30th Floor, 250 Vesey Street, New York, New York, 10281-1201, attention of
Timothy J. Grell. 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., Executive Vice President, General Counsel and Secretary,
with a copy to Sullivan & Cromwell, at 125 Broad Street, New York, New York
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:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
TORONTO DOMINION SECURITIES (USA) INC.
c/o Merrill Lynch & Co.
By: Merrill Lynch & Co.
By
--------------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
to Purchase Agreement
Dated November 2, 1995
CABLEVISION SYSTEMS CORPORATION
9-1/4% Senior Subordinated Notes
due 2005
<TABLE>
<CAPTION>
Principal
Underwriter Amount
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.. $150,000,000
Bear, Stearns & Co. Inc............................. 60,000,000
Morgan Stanley & Co. Incorporated................... 60,000,000
Toronto Dominion Securities (USA) Inc............... 30,000,000
------------
Total..................................... $300,000,000
============
</TABLE>
<PAGE>
SCHEDULE II
to Purchase Agreement
Dated November 2, 1995
CABLEVISION SYSTEMS CORPORATION
9-1/4% Senior Subordinated Notes
due 2005
Principal amount to be issued: $300,000,000.
Interest rate: 9-1/4%, payable semi-annually each May 1 and November 1,
commencing May 1, 1996.
Interest accrues from: November 7, 1995.
Date of maturity: November 1, 2005.
Redemption provisions: At the option of the Company, in whole or in part, on or
after November 1, 2000, at the following redemption prices (expressed as a
percentage of the principal amount), if redeemed during the 12-month period
beginning November 1 of the years indicated:
Years Redemption Price
----- ----------------
2000 104.625%
2001 103.100
2002 101.500
and thereafter at 100% of the principal amount, in each case together with
accrued interest to the redemption date (subject to the right of Holders of
record on relevant record dates to receive interest due on an interest payment
date).
Sinking fund requirements: None.
Initial public offering price: 100.000% of the principal amount plus accrued
interest from November 7, 1995.
Purchase price: 97.5% of the principal amount plus accrued interest from
November 7, 1995.
<PAGE>
II-2
Method of Payment: Payment shall be made to the Company by certified check or
official bank check or checks in New York Clearing House funds payable to the
order of the Company.
Closing date, time and location: 10:00 A.M., November 7, 1996 at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York, 10022.
Listing requirement: None.
Other terms and conditions: The indebtedness represented by the Notes will be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Prospectus).
<PAGE>
SCHEDULE III
to Purchase Agreement
Dated November 2, 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 (each 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
<PAGE>
III-2
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;
(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
or incorporated by reference 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 or
incorporated by reference 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 or incorporated by reference 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.
<PAGE>
III-3
(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;
(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 November 2, 1995
CABLEVISION SYSTEMS CORPORATION
Senior Subordinated Notes
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 _____, 1995 (the "Delivery Date"),
__________________
______________________________________________________________________________
principal amount of the Company's Subordinated Debt Securities (the "Offered
Securities"), offered by the Company's Prospectus dated ___________, 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 certified or official bank check in New York Clearing House funds, 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
<PAGE>
IV-2
prohibited under the laws of any jurisdiction to which the undersigned is
subject and that govern such investment, and (2) the Company, on or before
_________, 1995, 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/1/
-----------------------
(* - material subsidiary)
-------------------------
CSC Acquisition Corporation
CSC Acquisition - MA, Inc.
CSC Acquisition - NY, Inc.
Cablevision Area 9 Corporation/2/
Cablevision Fairfield Corporation/2/
Cablevision Finance Corporation
Cablevision Finance Limited Partnership
Cablevision Lightpath, Inc.
Cablevision of Cleveland G.P., Inc.
Cablevision of Cleveland L.P., Inc.
Cablevision of Cleveland, L.P.
Cablevision of Connecticut Corporation/2/
Cablevision of Connecticut Limited Partnership/2/
Cablevision of Michigan, Inc.
Cablevision of New Jersey, Inc./3/
* Cablevision of New York City - Master L.P./4/
* Cablevision of New York City - Phase I L.P./4/
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/4/
Cablevision Systems Suffolk Corporation
Cablevision Systems Westchester Corporation
Cablevision Systems of Southern Connecticut Limited Partnership/2/
Communications Development Corporation/2/
* NYC GP Corp.
* NYC LP Corp.
______________
1 Unless otherwise noted, all shares are pledged under the terms of the Third
Amended and Restated Security Agreement, dated as of July 15, 1988, as
amended, among Cablevision Systems Corporation, certain Securing Parties
and Toronto-Dominion (Texas), Inc. as Security Agent.
2. All shares or partnership interests are pledged under the terms of the
Connecticut Consent dated as of July 15, 1988 among Cablevision of
Connecticut Limited
<PAGE>
V-2
Partnership, Cablevision Systems of Southern Connecticut Limited
Partnership, CSC and Chase Manhattan Bank as Predecessor Security Agent and
Toronto-Dominion Bank Trust Company as Security Agent (the "Connecticut
Security Documents") under the Third Amendment and Restated Security
Agreement, as amended, as referenced in No. 1 above.
3. All shares pledged under the Security Agreement dated as of May 18, 1990
between Cablevision of New Jersey, Inc. and Toronto-Dominion Bank Trust
Company as Security Agent.
4. All partnership interests pledged under the Fourth Amended and Restated
Security Agreement, dated as of June 18, 1993, among Cablevision of New
York City -Phase I L.P., Cablevision of New York City - Master L.P.,
Cablevision Systems New York City Corporation, the Banks and Chase
Manhattan Bank, as Agent.
<PAGE>
SCHEDULE VI
UNRESTRICTED SUBSIDIARIES
-------------------------
(* - material subsidiary)
-------------------------
111 New South Road Corporation
1144 Route 109 Corp.
A-R Cable Investments, Inc./1/
A-R Cable Partners
AMC Productions, Inc./2/
* American Movie Classics Holding Corporation
* American Movie Classics Company
* Arsenal MSub 2, Inc./3/
Arsenal MSub 7, Inc.
Bravo Company
Bravo Programming, Inc.
CSC Gateway Corporation/4/
CSC Investments, Inc.
CSC Realty, Inc.
CSC Transport, Inc.
Cable Networks, Inc.
Cablevision Lightpath - CT, Inc.
Cablevision Lightpath - NJ Inc.
Cablevision Lightpath - NY, Inc.
Cablevision Lightpath - OH, Inc.
* Cablevision MFR, Inc./5/
Cablevision of Brookline, Inc.
Cablevision of Hudson County, Inc. (f/k/a Cablevision of Riverview,
Inc.)/6/
* Cablevision of Monmouth, Inc./6/
Cablevision of Nashoba, Inc.
Cablevision Programming Incorporated
Cablevision Programming New England Corporation
Cablevision Systems Ohio Investment Corporation/3/
Cablevision of Geauga County/3/
Cablevision of Ohio, Ltd./3/
Cablevision of the Midwest Holding Co., Inc./3/
Cablevision of the Midwest, Inc./3/
Cleveland Radio Holdings, Inc.
COB, Inc.
Complexicable of Cuyahoga Valley, Ltd./3/
CV Radio Associates, L.P.
Garden L.P. Holding Corp./7/
<PAGE>
VI-2
In Court Holding Corporation
Missouri Cable Partners, L.P.
MuchMusic U.S.A. Venture
NCC LP Corp.
Neighborhood News Holdings, Inc./7/
News 12 Holding Corporation/7/
News 12 New Jersey L.L.C.
Northern Ohio Interconnect
Ohio Cablevision Investors, Ltd./3/
PS Holding Acquisition Corporation
* Petra Cablevision Corp./3/
Rainbow Advertising Sales Corporation/7/
Rainbow CT Holdings, Inc./7/
Rainbow NJ Holdings, Inc./7/
Rainbow Garden Corp.
Rainbow MM Holdings Corporation
Rainbow Network Communications
Rainbow News 12 Company/7/
Rainbow PPV Holdings, Inc.
Rainbow Program Enterprises
Rainbow Programming Holdings, Inc./8/
Rainbow Programming Services Company
Rainbow Travel, Inc./7/
Rainbow Westchester Holdings, Inc./7/
Samson Cablevision Corp./3/
Shamrock Cable Corporation/3/
Shamrock Cleveland Cablevision, L.P./3/
Shamrock Cuyahoga County Cablevision Associates, L.P./3/
Shamrock Ohio Cablevision Associates, L.P./3/
Space Cable of Ohio, Ltd./3/
Space Cable of Strongsville, Ltd./3/
SportsChannel America Soccer, Inc.
SportsChannel Associates/7/
SportsChannel Associates Holding Corporation/7/
SportsChannel Bay Area Holding Corporation
SportsChannel Cincinnati Associates
SportsChannel Cincinnati Holding Corporation
SportsChannel Florida Associates
SportsChannel Florida Holding Partnership
SportsChannel Los Angeles Holding Corporation
SportsChannel New England Holding Limited Partnership
SportsChannel New York Holding Partnership/7/
<PAGE>
VI-3
SportsChannel Ohio Associates
SportsChannel Ohio Holding Corporation
SportsChannel Prism/Chicago Holding Partnership
SportsChannel Ventures, Inc./7/
Suffolk Cable Corporation/3/
Suffolk Cable of Shelter Island, Inc./3/
Suffolk Cable of Smithtown, Inc./3/
Telerama, Inc./3/
The Racing Network, Inc./7/
The Singles Network, Inc/7/
* VC Holding, Inc./9/
V-C Mo. G.P., Inc./9/
V Cable GP, Inc./9/
* V Cable, Inc./10/
WKNR, Inc.
___________
1. All of the shares of A-R Cable Investments, Inc. are pledged to Warburg,
Pincus Investors, L.P. ("Warburg") under the terms of a Pledge Agreement
between the CSC and Warburg, dated as of May 11, 1992.
2. All of the shares of AMC Productions, Inc. are pledge to Toronto-Dominion
under the terms of a Stock Pledge Agreement, dated as of June 26, 1992,
among American Movie Classic Holding Company and Toronto-Dominion (Texas),
Inc. as agent for the Banks.
3. All of the shares of capital stock or partnership interest (as the case may
be) of Arsenal MSub 2, Inc., Arsenal MSub 7, Inc., Cablevision Systems Ohio
Investment Corporation, Cablevision of Geauga County, Cablevision of Ohio,
Ltd. Cablevision of the Midwest Holding Co., Inc., Cablevision of the
Midwest, Inc., Complexicable of Cuyahoga Valley, Ltd. Ohio Cablevision
Investors, Ltd., Petra Cablevision Corp., Samson Cablevision Corp.,
Shamrock Cable Corporation, Shamrock Cable of Brooklyn, Inc., Shamrock
Cable of Hinckley, Inc., Shamrock Cleveland Cablevision, L.P., Shamrock
Cuyahoga County Cablevision Associates, L.P., Shamrock Ohio Cablevision
Associates, L.P., Space Cable of Ohio, Ltd., Space Center of Strongsville,
Ltd., Suffolk Cable Corporation, Suffolk Cable of Shelter Island, Inc.,
Suffolk Cable of Smithtown, Inc. and Telerama, Inc. are pledged to GECC
under the terms of a Newco Group Pledge Agreement, dated as of December 31,
1992, among VC Holding, Inc., the direct and indirect subsidiaries of VC
Holding, Inc. and GECC.
<PAGE>
VI-41
4. All of the shares of CSC Gateway Corporation are pledged pursuant to a
Security Agreement between Cablevision of Newark and Toronto-Dominion Bank
Trust Company, dated as of April 15, 1992.
5. All of the shares of Cablevision MFR, Inc. are held by NationsBank of
Texas, N.A. under the terms of a Safekeeping Agreement between Cablevision
Systems Corporation and NationsBank of Texas, N.A. dated as of August 8,
1994.
6. All of the shares Cablevision of Monmouth, Inc. and Cablevision of Hudson
County, Inc. (f/k/a Cablevision of Riverview, Inc.) are pledged under the
terms of the Pledge Agreement between Cablevision MFR, Inc. and NationsBank
of Texas, N.A., dated as of August 8, 1994.
7. All of the capital stock of partnership interest (as the case may be) of
Garden L.P. Holding Corp., Rainbow Advertising Sales Corporation, The
Singles Network, Inc., The Racing Network, Inc., Neighborhood News
Holdings, Inc., News 12 Holding Corporation, Rainbow CT Holdings, Inc.,
Rainbow NJ Holdings, Inc., Rainbow Travel, Inc., Rainbow Westchester
Holdings, Inc., Sportschannel Associates Holding Corporation, SportsChannel
Ventures, Inc., SportsChannel Associates, SportsChannel New York Holding
Partnership, Rainbow News 12 Company and Rainbow Program Enterprises are
pledged to Toronto-Dominion under the terms of a Borrower Pledge Agreement,
dated as of January 27, 1995, among Rainbow Programming Holdings, Inc.,
Toronto-Dominion (Texas), Inc. as administrative agent for the Co-Agents
and the Banks.
8. All of the shares of Rainbow Programming Holdings, Inc. are pledged to
Toronto-Dominion under the terms of the Stock Pledge Agreement among
Cablevision Systems Corporation, Toronto-Dominion (Texas), Inc. as
administrative agent and the Banks.
9. All of the shares of capital stock of VC Holding, Inc., V-C Mo. G.P., Inc.
and V Cable GP, Inc. are pledged to GECC under the terms of a V Cable Group
Pledge Agreement, dated as of December 31, 1992 among V Cable, Inc., V-C
Mo. G.P., Inc., and GECC. 81% of the capital stock of VC Holding, Inc. is
owned by V Cable, Inc.
10. All of the shares of Common Stock of V Cable, Inc. are pledged to GECC
under the terms of a CSC Non-Recourse Guaranty and Pledge Agreement between
the Company and GECC, dated as of December 31, 1992.
<PAGE>
EXHIBIT 99.3
CERTIFICATE OF VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS THEREOF OF THE 8 1/2% SERIES I
CUMULATIVE CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK
OF
CABLEVISION SYSTEMS CORPORATION
__________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
__________________________
I, William J. Bell, Vice Chairman of Cablevision Systems Corporation (the
"corporation"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, DO HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation as amended of said corporation, said Board of
Directors, at a meeting duly called and held on November 6, 1995, adopted a
resolution providing for the issuance of One Million Three Hundred and Eighty
Thousand (1,380,000) authorized shares of 8 1/2% Series I Cumulative Convertible
Exchangeable Preferred Stock ("Series I Preferred Stock"), which resolution is
as follows:
WHEREAS, the Board of Directors of the corporation (the "Board of
Directors") is authorized, within the limitations and restrictions stated in the
Certificate of Incorporation, as amended, to fix by resolution or resolutions
the designation of each series of preferred stock and the powers, designations,
preferences and relative participating, optional or other rights, if any, or the
qualifications, limitations or restrictions thereof, including, without limiting
the generality of the foregoing, such provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors under the General
Corporation Law of Delaware; and
<PAGE>
2
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of a series of preferred
stock and the number of shares constituting such series;
NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized such series
of preferred stock on the terms and with the provisions herein set forth:
I. Certain Definitions.
-------------------
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
"Additional Preferred Stock" has the meaning specified in Article
Fourth of the corporation's Certificate of Incorporation.
"ASE" means the American Stock Exchange.
"Board of Directors" means the Board of Directors of the corporation.
"Business Day" means a day other than a Saturday, Sunday, national or
New York State holiday or other day on which commercial banks in New York
City are authorized or required by law to close.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Change of Control" with respect to the corporation shall be deemed to
have occurred in the event that (A) any Person, or group (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), other than Dolan,
becomes entitled to elect a majority of the Board of Directors; (B) any
Person, or group (within the meaning of Rule 13d-5(b)(1) under the Exchange
Act), other than Dolan, is or becomes the beneficial owner (as defined in
Section 13(d) of the Exchange Act and the rules promulgated thereunder),
directly or indirectly, of shares representing 50% or more of the
outstanding voting power of the corporation; (C) a transaction or an event
occurs in connection with which 66-2/3% or more of the aggregate
outstanding amount of Common Stock shall be exchanged for, converted into,
acquired for or constitutes solely the right to receive, cash, securities
of an entity other than the corporation or any of its subsidiaries,
property or other assets (whether by means of an exchange offer, tender
offer, consolidation, merger (other than a holding company reorganization
or a change of domicile merger), combination or similar transaction);
<PAGE>
3
or (D) there occurs the conveyance, sale, lease, assignment, transfer or
other disposal of (but excluding any mortgage or pledge of, or other grant
of a security interest in) all or substantially all of the corporation's
property, business or assets; provided, however, that a Change of Control
will not be deemed to have occurred with respect to either of the following
transactions or events (unless the Company shall have elected in the
context of a specific transaction or event that such transaction or event
shall constitute a Change of Control): (a) any transaction or event in
which more than 50% (by value as determined in good faith by the Board of
Directors) of the consideration received by holders of Class A Common Stock
consists of Marketable Stock, or (b) any consolidation or merger of the
corporation in which the holders of Common Stock immediately prior to such
transaction own, directly or indirectly, (i) 50% or more of the common
equity securities of the sole surviving entity (or of the ultimate parent
of such sole surviving entity) outstanding at the time immediately after
such consolidation or merger and (ii) securities representing 50% or more
of the combined voting power of the surviving entity's voting power (or the
voting power of the ultimate parent of such surviving entity) outstanding
at such time. If a conveyance, sale, lease, assignment, transfer or other
disposal of all or substantially all of the corporation's property,
business or assets occurs and the consideration, including Marketable
Stock, received by the corporation is not subsequently distributed to the
holders of Class A Common Stock, a Change of Control shall be deemed to
have occurred.
"Class A Common Stock" means the Class A Common Stock, par value $.01
per share, of the corporation.
"Class B Common Stock" means the Class B Common Stock, par value $.01
per share, of the corporation.
"Closing Price" means, for each Trading Day, the last reported sale
price regular way on the ASE (or, if the ASE is not the principal national
securities exchange on which the Class A Common Stock is listed or admitted
for trading, on such other national securities exchange or, if the Class A
Common Stock is not so listed or admitted for trading on the ASE or any
other national securities exchange, on the NASDAQ National Market System
or, if the Class A Common Stock is not quoted on the NASDAQ National Market
System, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the corporation for that purpose).
"Common Stock" means the Class A Common Stock and the Class B Common
Stock and any other class of common stock hereafter authorized by the
corporation from time to time.
<PAGE>
4
"Conversion Agent" has the meaning specified in Section IX(A) hereof.
"Conversion Date" has the meaning specified in Section IX(A) hereof.
"Conversion Price" has the meaning specified in Section IX(A) hereof.
"corporation" means Cablevision Systems Corporation.
"Dividend Payment Date" means each January 1, April 1, July 1 and
October 1 of each year on which dividends shall be paid or are payable, any
Redemption Date and any other date on which dividends in arrears may be
paid.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each Quarterly Dividend Period.
"Dividend Record Date" means, with respect to the dividend payable on
each Dividend Payment Date, the close of business on the fifteenth day
immediately preceding such Dividend Payment Date, or such other record date
as may be designated by the Board of Directors with respect to the dividend
payable on such Dividend Payment Date; provided, however, that such record
date may not be more than 60 days or less than ten days prior to such
Dividend Payment Date.
"Dolan" shall mean Mr. Charles F. Dolan, his spouse, his descendants
or any spouse of any such descendants, and trusts for the benefit of, inter
alia, him, his spouse, his descendants or any spouse of any such
descendants, and any estate, testamentary trust, or executor,
administrator, conservator or legal or personal representative of any of
the foregoing, or any partnership, limited liability company, corporation
or similar entity all the owners of which are comprised of one or more of
the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" has the meaning specified in Section VIII(A) hereof.
"Exchange Debentures" shall mean the 8 1/2% Convertible Subordinated
Debentures due 2007 of the corporation into which shares of the Series I
Preferred Stock are exchangeable at the option of the corporation.
"Exchange Indenture" has the meaning specified in Section VII(D)
hereof.
"Exchange Notice" has the meaning specified in Section VIII(A) hereof.
<PAGE>
5
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy. In determining Fair Market Value
for purposes of subsection (d) of Section IX(A) in the event of the Rainbow
Spin-off, if the securities being distributed to the holders of Class A
Common Stock in the Rainbow Spin-off are expected to be publicly traded,
the determination of Fair Market Value by the Board of Directors shall be
based on the expected fully distributed public market value of such
securities.
"Holder" means a registered holder of shares of Series I Preferred
Stock.
"Initial Dividend Period" means the dividend period commencing on and
including the Original Issue Date and ending on and including December 31,
1995.
"Junior Securities" has the meaning specified in Section III(A)(i)
hereof.
"Liquidation Preference" means the Original Liquidation Preference,
plus an amount equal to all accrued and unpaid dividends from and after the
Dividend Payment Date on which such dividends were to be paid. The
Liquidation Preference of a share of Series I Preferred Stock will increase
by the amount of dividends that accrue on such share on a Dividend Payment
Date and will decrease only to the extent such dividends are actually paid,
all as provided in Section IV hereof. Notwithstanding the foregoing, in
determining the amount to be paid on a Redemption Date or Exchange Date,
Liquidation Preference shall not be deemed to include any dividends to the
extent such dividends are to be paid on such date in accordance with the
requirements of this Certificate of Designations.
"Market Value" of the Class A Common Stock in the event of a Change of
Control, means the average of the Closing Prices of the Class A Common
Stock for the five Trading Days ending on the last Business Day preceding
the date of the Change of Control. For purposes of the definition of
Market Value, the date of the Change of Control shall be deemed to be the
later of the date of occurrence of the Change of Control or the tenth
Trading Day after the first public announcement thereof.
"Marketable Stock" means common equity securities of (i) any entity
that is the successor to all or substantially all of the business or assets
of the corporation as a result of a Change of Control (or the ultimate
parent of such successor) or (ii) a wholly-owned subsidiary of the
corporation, which in the case of either clause (i) or (ii) is (or will,
upon distribution thereof, be) listed or quoted on the ASE or another
national securities exchange or the NASDAQ National Market System or any
similar
<PAGE>
6
system of automated dissemination of quotation of securities prices in the
United States.
"Optional Redemption Price" has the meaning set forth in Section
VI(A)(i) hereof.
"Original Issue Date" means the date on which shares of Series I
Preferred Stock were first issued by the corporation.
"Original Liquidation Preference" means $250 per share of Series I
Preferred Stock.
"Parity Securities" has the meaning specified in Section III(A)(ii)
hereof.
"Person" means any individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
"Quarterly Dividend Period" means the quarterly period commencing on
and including a Dividend Payment Date and ending on and including the day
immediately preceding the next subsequent Dividend Payment Date.
"Rainbow Spin-off" means the payment of any dividend by the
corporation or the making by the corporation 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 any successor to the assets or equity
interests thereof, or of another entity, holding only assets that were held
by Rainbow Programming Holdings, Inc. immediately prior to the acquisition
thereof by such entity, being held by all or any portion of the
shareholders of the corporation.
"Redemption Date" has the meaning specified in Section VI(B)(i)(d)
hereof.
"Redemption Notice" has the meaning specified in Section VI(B)(i)
hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Securities" has the meaning specified in Section III(A)(iii)
hereof.
<PAGE>
7
"Series C Preferred Stock" means the Series C Cumulative Preferred
Stock of the corporation.
"Series D Preferred Stock" means the Series D Cumulative Preferred
Stock of the corporation.
"Series G Preferred Stock" means the 11 3/4% Series G Redeemable
Exchangeable Preferred Stock of the corporation.
"Series H Preferred Stock" means the 11 3/4% Series H Redeemable
Exchangeable Preferred Stock of the corporation to be established and
issued in exchange for shares of the Series G Preferred Stock.
"Special Conversion Exercise Period" means the period commencing on
the date of the mailing of a notice by the corporation that a Change of
Control has occurred and ending on the 45th day after such mailing or, if
such 45th day is not a Business Day, ending on the next succeeding Business
Day.
"Special Conversion Notice" has the meaning specified in Section
IX(B)(2) hereof.
"Special Conversion Termination Date" means the last day of the
Special Conversion Exercise Period.
"Special Conversion Price" means the greater of the Market Value of
the Class A Common Stock and $34.58 per share (which amount, each time the
then prevailing Conversion Price shall be adjusted as provided elsewhere
herein, shall likewise be adjusted so that the ratio of such dollar amount
to the then prevailing Conversion Price, after giving effect to any such
adjustment, shall always be the same as the ratio of $34.58 to the initial
Conversion Price (without giving effect to any adjustment)).
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than fifty percent (50%)
of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or a combination thereof.
"Trading Day" means any day on which the ASE or other applicable stock
exchange or market is open for business.
<PAGE>
8
"Transfer Agent" means Harris Trust and Savings Bank or any successor
transfer agent.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means The Bank of New York, as Trustee under the Exchange
Indenture, or any successor Trustee appointed in accordance with the terms
of the Exchange Indenture.
"Voting Rights Triggering Event" has the meaning specified in Section
VII(G)(i) hereof.
II. Designation.
-----------
The series of preferred stock authorized hereunder shall be designated
as the "8 1/2% Series I Cumulative Convertible Exchangeable Preferred Stock".
The number of shares constituting such series shall be 1,380,000, the par value
of the Series I Preferred Stock shall be $.01 per share of Series I Preferred
Stock, and the initial liquidation preference of the Series I Preferred Stock
shall be $250 per share.
III. Ranking.
-------
The Series I Preferred Stock shall rank, with respect to dividends and
distributions upon the liquidation, dissolution and winding-up of the
corporation:
(i) senior to all classes or series of Common Stock of the corporation
and any Capital Stock, including any series of Additional Preferred Stock
hereafter created by the Board of Directors, the terms of which Capital
Stock or Additional Preferred Stock do not expressly provide that it ranks
senior to or on a parity with the Series I Preferred Stock as to dividends
and distributions upon liquidation, dissolution and winding-up of the
corporation (collectively referred to as "Junior Securities");
(ii) on a parity with the Series C Preferred Stock, the Series D
Preferred Stock, the Series G Preferred Stock, the Series H Preferred Stock
and any Capital Stock, including any series of Additional Preferred Stock
hereafter created by the Board of Directors, the terms of which expressly
provide that it ranks on a parity with the Series I Preferred Stock as to
dividends and distributions upon the liquidation, dissolution and winding-
up of the corporation (collectively referred to as "Parity Securities");
and
<PAGE>
9
(iii) junior to any Capital Stock, including any series of Additional
Preferred Stock hereafter created by the Board of Directors, the terms of
which expressly provide that it ranks senior to the Series I Preferred
Stock as to dividends and distributions upon the liquidation, dissolution
and winding-up of the corporation ("Senior Securities").
IV. Dividends.
---------
(A) Beginning on the Original Issue Date, Holders shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on each
outstanding share of Series I Preferred Stock, at a rate per annum equal to 8
1/2% of the Liquidation Preference per share of the Series I Preferred Stock,
payable with respect to each Dividend Period. All dividends shall be cumulative
and shall be payable in arrears for each Dividend Period on each Dividend
Payment Date, commencing on January 1, 1996.
(B) Each dividend paid on the Series I Preferred Stock shall be
payable to Holders of record as their names shall appear in the stock ledger of
the corporation on the Dividend Record Date for such dividend, except that
dividends in arrears for any past Dividend Payment Date may be declared and paid
at any time without reference to such regular Dividend Payment Date to Holders
of record on a later dividend record date determined by the Board of Directors.
(C) Dividends shall cease to accumulate in respect of shares of Series
I Preferred Stock on the day prior to the Exchange Date or on the day prior to
the Redemption Date with respect thereto, unless the corporation shall have
failed to issue the appropriate aggregate principal amount of Exchange
Debentures in respect of the Series I Preferred Stock on the Exchange Date or
shall have failed to pay the Optional Redemption Price on the Redemption Date
with respect to such shares of Series I Preferred Stock.
(D) All dividends paid with respect to shares of the Series I
Preferred Stock shall be paid pro rata to the Holders entitled thereto based
upon the number of shares of Series I Preferred Stock held by each such Holder
on the relevant Dividend Record Date.
(E) No full dividends shall be declared by the Board of Directors or
paid or funds set apart for payment by the corporation on the Series I Preferred
Stock or any Parity Securities for any period unless full cumulative dividends
have been or contemporaneously are declared and paid, or declared and a sum set
apart sufficient for such payment, on the Series I Preferred Stock and any
Parity Securities for all dividend periods terminating on or prior to the date
of payment of such full dividends on the Series I Preferred Stock or such Parity
Securities. If any dividends are not paid in full, as aforesaid, upon the
shares of the
<PAGE>
10
Series I Preferred Stock and any other Parity Securities, all dividends declared
upon shares of the Series I Preferred Stock and any other Parity Securities
shall be declared pro rata so that the amount of dividends declared per share on
the Series I Preferred Stock and such Parity Securities shall in all cases bear
to each other the same ratio that accrued and unpaid dividends per share on the
Series I Preferred Stock and such Parity Securities bear to each other. Except
as contemplated herein, no interest or additional dividends, or sum of money in
lieu of interest or additional dividends, shall be payable in respect of any
dividend payment or payments on the Series I Preferred Stock or any other Parity
Securities which may be in arrears.
(F) So long as any shares of the Series I Preferred Stock are
outstanding, except with respect to (i) any conversion of Class B Common Stock
into Class A Common Stock, (ii) prior to November 1, 2000, the occurrence of the
Rainbow Spin-off, (iii) repurchases of Common Stock, or warrants, rights, calls
or options exercisable for or convertible into Common Stock, issued under the
corporation's stock incentive programs, and (iv) dividends or distributions
payable in kind in additional shares of, or warrants, rights, calls or options
exercisable for or convertible into additional shares of, Junior Securities, the
corporation shall not declare, pay or set apart for payment any dividend on any
Junior Securities (except dividends on Junior Securities payable in additional
shares of Junior Securities), or make any payment on account of, or set apart
for payment money for a sinking or other similar fund for, the purchase,
redemption or other retirement of, any of the Junior Securities or any warrants,
rights, calls or options exercisable for or convertible into any of the Junior
Securities, and shall not permit any corporation or other entity directly or
indirectly controlled by the corporation to purchase or redeem any of the Junior
Securities or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities, unless prior to or concurrently
with such declaration, payment, setting apart for payment, purchase, redemption
or distribution, as the case may be, all accrued and unpaid dividends on shares
of the Series I Preferred Stock not paid on the dates provided for in Section
IV(A) hereof (and, to the extent previously due but not yet paid, any and all
redemption payments on the Series I Preferred Stock) shall have been or are
concurrently being paid.
(G) Dividends payable on shares of the Series I Preferred Stock for
any period less than a year shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in the period for
which payable. If any Dividend Payment Date occurs on a day that is not a
Business Day, any accrued dividends otherwise payable on such Dividend Payment
Date shall be paid on the next succeeding Business Day.
<PAGE>
11
V. Payment on Liquidation.
----------------------
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the corporation, Holders will be entitled to
receive out of the assets of the corporation available for distribution to the
holders of its Capital Stock, whether such assets are capital, surplus or
earnings, an amount in cash equal to the Liquidation Preference, before any
payment shall be made or any assets distributed to the holders of any of the
Junior Securities. Except as set forth in the preceding sentence, Holders shall
not be entitled to any distribution in the event of voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the corporation. If
upon any voluntary or involuntary liquidation, dissolution or winding-up of the
affairs of the corporation, the assets of the corporation are not sufficient to
pay in full the liquidation payments payable to the holders of outstanding
shares of the Series I Preferred Stock and all Parity Securities, then the
holders of all such shares shall share equally and ratably in any distribution
of assets in proportion to the full liquidation preferences, determined as of
the date of such voluntary or involuntary liquidation, dissolution or winding-
up, to which they are entitled.
(B) For the purposes of this Section V only, neither the sale, lease,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
corporation nor the consolidation or merger of the corporation with or into one
or more corporations shall be deemed to be a liquidation, dissolution or
winding-up of the affairs of the corporation.
VI. Redemption.
----------
(A) Optional Redemption. (i) The corporation may, at its option,
-------------------
redeem (subject to contractual and other restrictions with respect thereto and
the legal availability of funds therefor), at any time after November 1, 1999,
from any source of funds legally available therefor, in whole or in part, in the
manner provided in Section VI(B) hereof, any or all of the shares of the Series
I Preferred Stock, at the redemption prices (expressed as a percentage of the
Liquidation Preference thereof) set forth below plus an amount in cash equal to
all accumulated and unpaid dividends per share for the period from the Dividend
Payment Date immediately prior to the Redemption Date to the day prior to the
Redemption Date) (the "Optional Redemption Price"), if redeemed during the 12-
month period beginning November 1 of the years indicated:
Year Percentage
---- ----------
1999................. 102.8%
2000................. 101.4
2001 and thereafter.. 100.0
<PAGE>
12
(ii) In the event of a redemption pursuant to this Section VI(A) of
only a portion of the then outstanding shares of Series I Preferred Stock, the
corporation shall effect such redemption pro rata according to the number of
shares held by each Holder of such Series I Preferred Stock or by lot, as
determined by the corporation, except that the corporation may redeem such
shares held by any Holders of fewer than 100 shares (or shares held by Holders
who would hold less than 100 shares as a result of such redemption), as
determined by the corporation in its sole discretion.
(B) Procedure for Redemption. (i) Not more than sixty (60) and not
------------------------
less than thirty (30) days prior to the date fixed for any redemption of the
Series I Preferred Stock, written notice (the "Redemption Notice") shall be
given by first-class mail, postage prepaid, to each Holder of record of shares
to be redeemed on the record date fixed for such redemption of the Series I
Preferred Stock at such Holder's address as the same appears on the stock ledger
of the corporation, provided, however, that no failure to give such notice nor
any deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Series I Preferred Stock to be redeemed except as to
the Holder or Holders to whom the corporation has failed to give such notice or
except as to the Holder or Holders whose notice was defective. The Redemption
Notice shall state:
(a) the Optional Redemption Price;
(b) whether all or less than all the outstanding shares of the
Series I Preferred Stock are to be redeemed and the total number of shares
of such Series I Preferred Stock being redeemed;
(c) the number of shares of Series I Preferred Stock held by the
Holder that the corporation intends to redeem;
(d) the date fixed for redemption (the "Redemption Date");
(e) that the Holder is to surrender to the corporation, at the
place or places, which shall be designated in such Redemption Notice, its
certificates representing the shares of Series I Preferred Stock to be
redeemed;
(f) that dividends on the shares of the Series I Preferred Stock
to be redeemed shall cease to accrue on the day prior to such Redemption
Date unless the corporation defaults in the payment of the Optional
Redemption Price; and
(g) the name of any bank or trust company performing the duties
referred to in Section VI(B)(v) below.
<PAGE>
13
(ii) On or before the Redemption Date, each Holder of Series I
Preferred Stock to be redeemed shall surrender the certificate or certificates
representing such shares of Series I Preferred Stock to the corporation, in the
manner and at the place designated in the Redemption Notice, and on the
Redemption Date the full Optional Redemption Price for such shares shall be
payable in cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
returned to authorized but unissued shares. In the event that less than all of
the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.
(iii) Unless the corporation defaults in the payment in full
of the Optional Redemption Price, dividends on the Series I Preferred Stock
called for redemption shall cease to accumulate on the day prior to the
Redemption Date, and the Holders of such shares shall cease to have any further
rights with respect thereto on the Redemption Date, other than the right to
receive the Optional Redemption Price, without interest.
(iv) If a Redemption Notice shall have been duly given, and if, on or
before the Redemption Date specified therein, all funds necessary for such
redemption shall have been set aside by the corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the Holders of the Series
I Preferred Stock called for redemption so as to be and continue to be available
therefor, then, notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, all shares so
called for redemption shall no longer be deemed outstanding, and all rights with
respect to such shares shall forthwith on such Redemption Date cease and
terminate, except only the right of the Holders thereof to receive the amount
payable on redemption thereof, without interest.
(v) If a Redemption Notice shall have been duly given or if the
corporation shall have given to the bank or trust company hereinafter referred
to irrevocable authorization promptly to give such notice, and if on or before
the Redemption Date specified therein the funds necessary for such redemption
shall have been deposited by the corporation with such bank or trust company in
trust for the pro rata benefit of the Holders of the Series I Preferred Stock
called for redemption, then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for cancellation, from and
after the time of such deposit, all shares so called, or to be so called
pursuant to such irrevocable authorization, for redemption shall no longer be
deemed to be outstanding and all rights with respect of such shares shall
forthwith cease and terminate, except only the right of the Holders thereof to
receive from such bank or trust company at any time after the time of such
deposit the funds so deposited, without interest, and the right of the Holders
thereof to convert such shares as provided in Section IX hereof to and including
the fifth Business Day preceding the date fixed for redemption. The aforesaid
bank or trust company shall be organized and in good standing under the laws of
the United States of America or of the State of New York, shall be doing
business in the Borough of
<PAGE>
14
Manhattan, The City of New York, shall have capital, surplus and undivided
profits aggregating at least $100,000,000 according to its last published
statement of condition, and shall be identified in the Redemption Notice. Any
interest accrued on such funds shall be paid to the corporation from time to
time. Any funds so set aside or deposited, as the case may be, in respect of
shares of the Series I Preferred Stock that are subsequently converted shall be
promptly returned to the corporation. Any funds so set aside or deposited, as
the case may be, and unclaimed at the end of three years from such Redemption
Date shall, to the extent permitted by law, be released or repaid to the
corporation, after which repayment the Holders of the shares so called for
redemption shall look only to the corporation for payment thereof.
(vi) In connection with any redemption of shares of Series I Preferred
Stock, the corporation may arrange for the purchase and conversion of any such
shares by an agreement with one or more investment bankers or other purchasers
to purchase such shares by paying to the Holders or to the Conversion Agent in
trust for such Holders, on or before the close of business on the day prior to
the Redemption Date, an amount, in cash, not less than the Optional Redemption
Price payable by the Company on redemption of such shares. Notwithstanding
anything to the contrary contained herein, the obligation of the Company to pay
the Optional Redemption Price of such shares of Series I Preferred Stock shall
be satisfied and discharged to the extent such amount is so paid by such
purchasers. Pursuant to such an agreement, any such shares of Series I
Preferred Stock tendered by the Holders for redemption or not duly surrendered
for conversion by such Holders shall be deemed acquired by such purchasers from
such Holders and (notwithstanding anything to the contrary contained in Section
IX(A) hereof) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the day prior to the Redemption
Date, subject to payment of the above as aforesaid.
VII. Voting Rights.
-------------
(A) Holders, except as otherwise required under Delaware law and as
set forth in paragraphs (B) and (C) below, shall not be entitled or permitted to
vote on any matter required or permitted to be voted upon by the stockholders of
the corporation.
(B) Without the approval of Holders of at least 66 2/3% of the shares
of Series I Preferred Stock then outstanding, voting or consenting, as the case
may be, as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting called for the purpose, the
corporation will not (i) create, authorize or issue any Senior Securities or any
warrants, rights, calls or options exercisable or exchangeable for or
convertible into, or any obligations evidencing the right to purchase or
acquire, any Senior Securities, including in connection with a merger,
consolidation or other reorganization or (ii) reclassify any Junior Securities,
Parity Securities or other outstanding Capital Stock of
<PAGE>
15
the corporation into any Senior Securities or any warrants, rights, calls or
options exercisable or exchangeable for or convertible into, or any obligations
evidencing the right to purchase or acquire, any Senior Securities.
(C) Without the approval of Holders of at least 66 2/3% of the shares
of Series I Preferred Stock then outstanding, voting or consenting, as the case
may be, as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting called for the purpose, the
corporation will not amend, modify or repeal this Certificate of Designations so
as to affect adversely the specified designations, rights, preferences,
privileges or voting rights of the Series I Preferred Stock. The authorization
or consummation of a transaction which results in the Series I Preferred Stock
being converted into or exchanged for or becoming shares of a resulting entity
(as such term is defined in Section X) will not constitute an amendment,
modification or repeal of this Certificate of Designations for purposes of this
Section VII.
(D) Prior to the exchange of Series I Preferred Stock for Exchangeable
Debentures, the corporation shall not amend or modify the indenture dated
November 1, 1995, between the corporation and the Trustee for the Exchange
Debentures, as supplemented by a supplemental indenture dated as of November 1,
1995 (as so supplemented, the "Exchange Indenture"), a copy of which is on file
at the principal executive offices of the corporation, without the affirmative
vote or consent of Holders of at least a majority of the shares of Series I
Preferred Stock then outstanding, voting or consenting, as the case may be, as
one class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting called for the purpose; provided that
the corporation and the Trustee shall be permitted, without any vote or consent
of the Holders, to effect any amendments to the Exchange Indenture that could
have been effected under the Exchange Indenture without the consent of holders
of Exchange Debentures if any Exchange Debentures were then outstanding.
(E) The Holders of at least 66 2/3% of the shares of Series I
Preferred Stock then outstanding, voting or consenting, as the case may be, as
one class, whether voting in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting called for the purpose, may
waive compliance with any provision of this Certificate of Designations.
(F) Notwithstanding anything herein to the contrary, (i) the creation,
authorization or issuance of any shares of any Parity Securities or Junior
Securities or (ii) the increase or decrease in the amount of authorized Capital
Stock of any class, including any preferred stock, shall not require the consent
of the Holders and shall not be deemed to affect adversely the rights,
preferences, privileges or voting rights of Holders.
<PAGE>
16
(G) (i) In the event that dividends on the Series I Preferred Stock
are in arrears and unpaid for six Quarterly Dividend Periods (whether or not
consecutive), then the number of directors constituting the Board of Directors
shall be adjusted to permit the Holders of a majority of the shares of Series I
Preferred Stock then outstanding, voting as one class, to elect one member of
the Board of Directors of the corporation and a second member of the Board of
Directors if the right to elect a second director is required by the ASE or any
other national securities exchange on which the corporation elects to list the
Class A Common Stock or by the requirements of the NASDAQ National Market System
if the corporation elects to have the Class A Common Stock traded thereon. The
foregoing event described herein is a "Voting Rights Triggering Event". Holders
of a majority of the issued and outstanding shares of Series I Preferred Stock,
voting as one class, shall thereupon have the exclusive right to elect one or
two members of the Board of Directors, as the case may be, at any annual or
special meeting of stockholders or at a special meeting of the Holders called as
hereinafter provided.
(ii) The right of the Holders to vote pursuant to Section VII(G)(i) to
elect one or two members of the Board of Directors, as the case may be, as
aforesaid, shall continue until such time as all accumulated dividends that are
in arrears on the Series I Preferred Stock are paid in full, at which time the
special right of the Holders to vote for the election of one or two directors,
as the case may be, and the term of office of such director or directors elected
by the Holders shall terminate, and the number of directors constituting the
Board of Directors shall be reduced accordingly. At any time after voting power
to elect one or two directors shall have become vested and be continuing in the
Holders pursuant to Section VII(G)(i) hereof, or if a vacancy shall exist in the
office of a director elected by the Holders, a proper officer of the corporation
may, and upon the written request of the Holders of record of at least twenty
percent (20%) of the shares of Series I Preferred Stock then outstanding
addressed to the Secretary of the corporation shall, call a special meeting of
the Holders for the purpose of electing the one or two directors, as the case
may be, which such Holders are entitled to elect as herein provided. If such
meeting shall not be called by a proper officer of the corporation within 20
days after personal service of such written request upon the Secretary of the
corporation, or within 20 days after mailing the same within the United States
by certified mail, addressed to the Secretary of the corporation at its
principal executive offices, then the Holders of record of at least twenty
percent (20%) of the outstanding shares of Series I Preferred Stock may
designate in writing one of their number to call such meeting at the expense of
the corporation, and such meeting may be called by the Person so designated upon
the notice required for annual meetings of stockholders of the corporation and
shall be held at the place for holding annual meetings of stockholders.
Notwithstanding the provisions of this Section VII(G)(ii), no such special
meeting shall be called if any such request is received less than 60 days before
the date fixed for the next ensuing annual or special meeting of stockholders of
the corporation. Any Holder so designated shall have access to the list of
Holders entitled to attend the meeting pursuant to the provisions hereof.
<PAGE>
17
(iii) At any meeting held for the purpose of electing directors at
which the Holders shall have the right, voting as one class, to elect one or two
directors, as the case may be, as aforesaid, the presence in person or by proxy
of the Holders of at least a majority of the outstanding Series I Preferred
Stock shall be required to constitute a quorum.
(H) (i) Any vacancy occurring in the office of a director elected by
the Holders may be filled by the remaining director, if any, or otherwise by the
departing director unless and until such vacancy shall be filled by the Holders.
(ii) In any case in which the Holders shall be entitled to vote
pursuant to this Section VII or pursuant to Delaware law, each Holder of shares
of Series I Preferred Stock shall be entitled to one vote for each share of
Series I Preferred Stock held.
VIII. Exchange.
--------
(A) The corporation may, at its option, on any Dividend Payment Date
on or after January 1, 1998, exchange the shares of Series I Preferred Stock, in
whole but not in part, for the Exchange Debentures issued pursuant to the
Exchange Indenture (such date, the "Exchange Date"). Notwithstanding the
foregoing, the corporation may not exercise such exchange option unless (i) all
accrued and unpaid dividends in respect of shares of Series I Preferred Stock
surrendered to the corporation upon exchange shall have been paid or (ii) the
corporation has set aside funds to provide for the payment in full of such
dividends. At least thirty (30) and not more than sixty (60) days prior to the
date fixed for exchange, the corporation shall send a written notice (the
"Exchange Notice") of exchange by mail to each Holder, which notice shall state:
(a) that the corporation has elected to exchange the Series I
Preferred Stock into Exchange Debentures pursuant to this Certificate of
Designations;
(b) the Exchange Date;
(c) that the Holder is to surrender to the corporation, at the
place or places and in the manner designated in the Exchange Notice, its
certificate or certificates representing the shares of Series I Preferred
Stock;
(d) that dividends on the shares of Series I Preferred Stock to
be exchanged shall cease to accrue at the close of business on the day
prior to the Exchange Date, whether or not certificates for shares of
Series I Preferred Stock are surrendered for exchange on the Exchange Date,
unless the corporation shall default in the delivery of Exchange
Debentures; and
<PAGE>
18
(e) that interest on the Exchange Debentures shall accrue from
the Exchange Date whether or not certificates for shares of Series I
Preferred Stock are surrendered for exchange on the Exchange Date.
On the Exchange Date, if the conditions set forth in clauses (i) through (iv)
below are satisfied and if the exchange is then permitted under the Exchange
Indenture, the corporation shall issue Exchange Debentures in exchange for the
Series I Preferred Stock as provided in the next paragraph, provided that on the
Exchange Date: (i) there shall be legally available funds sufficient for the
exchange to occur (including, without limitation, legally available funds
sufficient therefor under Sections 160 and 170 (or any successor provisions), to
the extent applicable, of the General Corporation Law of the State of Delaware;
(ii) the corporation shall have obtained a written opinion of counsel acceptable
to the corporation that an exemption from the registration requirements of the
Securities Act is available for such exchange, and such exemption is relied upon
by the corporation for such exchange or, alternatively, that the Exchange
Debentures have been registered thereunder; (iii) the Exchange Indenture and the
Trustee shall have been qualified under the Trust Indenture Act or the
corporation shall have obtained a written opinion of counsel that such
qualification is not required; and (iv) immediately after giving effect to such
exchange, no Default or Event of Default (each as defined in the Exchange
Indenture) would exist under the Exchange Indenture. In the event that any of
the conditions set forth in clauses (i) through (iv) of the preceding sentence
are not satisfied on the Exchange Date, then no shares of Series I Preferred
Stock shall be exchanged, and in order to effect an exchange as provided for in
this Section VIII, the corporation shall be required to fix another date for the
exchange and issue a new Exchange Notice.
(B) Upon any exchange pursuant to Section VIII(A), Holders shall be
entitled to receive a principal amount of Exchange Debentures equal to the
Liquidation Preference of Series I Preferred Stock, plus an amount in cash equal
to all accrued and unpaid dividends thereon for the period from the immediately
preceding Dividend Payment Date to the day prior to the Exchange Date; provided
that the corporation shall pay cash in lieu of issuing an Exchange Debenture in
a principal amount of less than $1,000 and provided further that the Exchange
Debentures will be issuable only in denominations of $1,000 and integral
multiples thereof.
(C) On or before the Exchange Date, each Holder shall surrender the
certificate or certificates representing such shares of Series I Preferred
Stock, in the manner and at the place designated in the Exchange Notice. The
corporation shall cause the Exchange Debentures to be executed on the Exchange
Date and, upon surrender in accordance with the Exchange Notice of the
certificates for any shares of Series I Preferred Stock so exchanged (properly
endorsed or assigned for transfer, if the Exchange Notice shall so state), such
shares shall be exchanged by the corporation into Exchange Debentures as
<PAGE>
19
aforesaid. The corporation shall pay interest on the Exchange Debentures at the
rate and on the dates specified therein from the Exchange Date.
(D) If the Exchange Notice has been mailed as aforesaid, and if
before the Exchange Date all Exchange Debentures necessary for such exchange
shall have been duly executed by the corporation and delivered to the Trustee
with irrevocable instructions to authenticate the Exchange Debentures necessary
for such exchange, then the rights of the Holders as stockholders of the
corporation shall cease (except the right to receive Exchange Debentures and
accrued and unpaid dividends to the Exchange Date and the right of the Holders
thereof to convert such shares as provided in Section IX hereof to and including
the fifth Business Day preceding the Exchange Date), and the Person or Persons
entitled to receive the Exchange Debentures issuable upon exchange shall be
treated for all purposes as the registered Holder or Holders of such Exchange
Debentures as of the date of exchange. Upon the exchange of the Series I
Preferred Stock for Exchange Debentures, the rights of Holders as stockholders
of the corporation shall cease (except the right to receive the Exchange
Debentures and accrued and unpaid dividends), and the Person or Persons entitled
to receive the Exchange Debentures issuable upon exchange shall be treated for
all purposes as registered holder or holders of such Exchange Debentures as of
the date of exchange.
IX. Conversion.
----------
(A) General Rights. Each share of Series I Preferred Stock shall be
--------------
convertible, at any time after January 8, 1996, at the option of the Holder
thereof, (but if such share is called for redemption pursuant to Section VI or
exchange pursuant to Section VIII, then only to and including but not after the
close of business on the fifth Business Day preceding the date fixed for such
redemption (except with respect to deemed conversions as provided for in Section
VI(B)(vi)) or exchange, provided that no default by the corporation in the
payment of the applicable Optional Redemption Price or in the exchange of such
share, as the case may be, shall have occurred and be continuing on the date
fixed for such redemption or exchange, as the case may be, in which case such
right of conversion shall be reinstated), into that number of fully paid and
non-assessable shares of Class A Common Stock of the corporation (calculated as
to each conversion to the nearest 1/100th of a share) obtained by dividing the
Original Liquidation Preference of the shares of Series I Preferred Stock
surrendered for conversion by the Conversion Price (as defined below) then in
effect (such date of conversion, a "Conversion Date").
The conversion price shall initially be $67.44 (the "Conversion
Price").
In order to exercise the conversion privilege, a Holder shall
surrender the certificate(s) representing such shares, accompanied by transfer
instrument(s) satisfactory to the corporation and sufficient to transfer the
Series I Preferred Stock being converted to the
<PAGE>
20
corporation free of any adverse interest, at any of the offices or agencies
maintained for such purpose by the conversion agent designated by the
corporation (the "Conversion Agent") and shall give written notice to the
corporation that the Holder elects to convert such shares. The initial
Conversion Agent shall be Harris Trust and Savings Bank, the transfer agent for
the Series I Preferred Stock. Such notice shall also state the name(s),
together with address(es), in which the certificate(s) for shares of Class A
Common Stock shall be issued. As promptly as practicable after the surrender of
such shares of Series I Preferred Stock as aforesaid, the corporation shall
issue and deliver at the office of such Conversion Agent to such Holder, or on
his written order, certificate(s) representing the number of full shares of
Class A Common Stock issuable upon the conversion of such shares in accordance
with the provisions hereof, and any fractional interest in respect of a share of
Class A Common Stock arising upon such conversion shall be settled as provided
for below. Certificates will be issued representing the balance of any
remaining shares of Series I Preferred Stock in any case in which fewer than all
of the shares of Series I Preferred Stock represented by a certificate are
converted. Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which shares of Series I Preferred
Stock shall have been surrendered and notice received by the corporation as
aforesaid, and the Person(s) in whose name(s) any certificate(s) for shares of
Class A Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder(s) of record of the Class A Common Stock represented
thereby at such time, unless the stock transfer books of the corporation shall
be closed on the date on which shares of Series I Preferred Stock are so
surrendered for conversion, in which event such conversion shall be deemed to
have been effected immediately prior to the close of business on the next
succeeding day on which such stock transfer books are open, and such person(s)
shall be deemed to have become such holder(s) of record of the Class A Common
Stock at the close of business on such later day. In either circumstance, such
conversion shall be at the Conversion Price in effect on the date upon which
such share shall have been surrendered and such notice received by the
corporation.
The dividend payable on a share of Series I Preferred Stock on a
Dividend Payment Date shall be payable to the Holder of record of such share at
the close of business on the Dividend Record Date applicable thereto,
notwithstanding the conversion of such share after such Dividend Record Date and
prior to the opening of business on such Dividend Payment Date or the default by
the corporation in the payment of the dividend due on such Dividend Payment
Date. Except as provided in the next sentence, shares of Series I Preferred
Stock surrendered for conversion during the period from the close of business on
any Dividend Record Date to the opening of business on the Dividend Payment Date
with respect to such dividend shall be accompanied by payment in immediately
available funds or other funds acceptable to the corporation of an amount equal
to the dividend payable on such Dividend Payment Date on the shares of Series I
Preferred Stock being surrendered for conversion. The dividend with respect to
a share of Series I Preferred Stock called for redemption on a Redemption Date
during the period from the fifth business day after a Dividend Record Date to
the fifth business day after the Dividend Payment Date shall be
<PAGE>
21
payable on such Dividend Payment Date to the Holder of record of such share on
such Dividend Record Date notwithstanding the conversion of such share of Series
I Preferred Stock after the close of business on such Dividend Record Date and
prior to the opening of business on such Dividend Payment Date, and the Holder
converting such share of Series I Preferred Stock need not include a payment of
such dividend amount upon surrender of such share of Series I Preferred Stock
for conversion. Except as provided in this paragraph, no payment or adjustment
shall be made upon any conversion on account of any dividends accrued on shares
of Series I Preferred Stock surrendered for conversion or on account of any
dividends on the Class A Common Stock issued upon conversion.
No fractional interest in a share of Class A Common Stock shall be
issued by the corporation upon the conversion of any share(s) of Series I
Preferred Stock. Any fractional interest in a share of Class A Common Stock
resulting from conversion of any share(s) of Series I Preferred Stock shall be
paid in cash (computed to the nearest cent) based on the Closing Price of the
Class A Common Stock on the last Trading Day prior to the date on which such
share or shares of Series I Preferred Stock are surrendered for conversion in
the manner set forth above. If more than one certificate representing shares of
Series I Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series I Preferred
Stock represented by such certificates which are to be converted.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the corporation shall pay or make a dividend or other
distribution on any class of capital stock of the corporation in Class A
Common Stock, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction the numerator of which
shall be the number of shares of Class A Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator of which shall be the sum of such number of shares and the
total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
the purposes of this subsection (a), the number of shares of Class A Common
Stock at any time outstanding shall not include shares held in the treasury
of the corporation. The corporation will not pay any dividend or make any
distribution on shares of Class A Common Stock held in the treasury of the
corporation.
(b) In case the corporation shall issue rights or warrants to all
holders of its Class A Common Stock entitling them to subscribe for,
purchase or acquire shares of
<PAGE>
22
Class A Common Stock at a price per share less than the current market
price per share (determined as provided in subsection (f) below) of the
Class A Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion
Price in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Class A Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Class A
Common Stock which the aggregate of the offering price of the total number
of shares of Class A Common Stock so offered for subscription, purchase or
acquisition would purchase at such current market price and the denominator
of which shall be the number of shares of Class A Common Stock outstanding
at the close of business on the date fixed for such determination plus the
number of shares of Class A Common Stock so offered for subscription,
purchase or acquisition, such reduction to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this subsection (b), the number of
shares of Class A Common Stock at any time outstanding shall not include
shares held in the treasury of the corporation. The corporation will not
issue any rights or warrants in respect of shares of Class A Common Stock
held in the treasury of the corporation.
(c) In case the outstanding shares of Class A Common Stock shall
be subdivided into a greater number of shares of Class A Common Stock, the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares of
Class A Common Stock shall each be combined into a smaller number of shares
of Class A Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the corporation shall, by dividend or otherwise,
distribute to all holders of its Class A Common Stock (i) evidences of its
indebtedness and/or (ii) cash or other assets (excluding (x) any rights or
warrants referred to in subsection (b) above, (y) any dividend or
distribution referred to in subsection (a) above, and (z) cash dividends or
distributions from earnings unless the sum of (1) all such cash dividends
and distributions made within the preceding 12 months in respect of which
no adjustment has been made and (2) any cash and the fair market value of
other consideration paid in respect of any repurchases of Common Stock by
the corporation or any of its subsidiaries within the preceding 12 months
in respect of which no adjustment has been made, exceeds 20% of the
corporation's market capitalization
<PAGE>
23
(being the product of the then current market price per share (determined
as provided in subsection (f) below) of the Class A Common Stock times the
aggregate number of shares of Class A Common Stock and Class B Common Stock
then outstanding) on the record date for such distribution), then in each
case, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of holders of Common Stock
entitled to receive such distribution shall be adjusted by multiplying such
Conversion Price by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (f) below) of
the Class A Common Stock on such date of determination (or, if earlier, on
the date on which the Class A Common Stock goes "ex-dividend" in respect of
such distribution) less the then Fair Market Value as determined by the
Board of Directors (whose determination shall be conclusive and shall be
described in a statement filed with any Conversion Agent) of the portion of
the other assets or evidences of indebtedness so distributed (and for which
an adjustment to the Conversion Price has not previously been made pursuant
to the terms of this Section IX) applicable to one share of Class A Common
Stock, and the denominator shall be such current market price per share of
the Class A Common Stock, such adjustment to become effective immediately
after the opening of business on the day following such date of
determination. The following transactions shall be excluded from the
foregoing clauses (1) and (2): (i) any conversion of Class B Common Stock
into Class A Common Stock, (ii) repurchases of Common Stock issued under
the corporation's stock incentive programs, and (iii) dividends or
distributions payable-in-kind in additional shares of, or warrants, rights,
calls or options exercisable for or convertible into additional shares of,
Junior Securities.
(e) The reclassification or change of Class A Common Stock into
securities including securities other than Class A Common Stock (other than
any reclassification upon a consolidation or merger to which subsection (i)
below applies) shall be deemed to involve (i) a distribution of such
securities other than Class A Common Stock to all holders of Common Stock
(and the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of holders of Common Stock entitled to
receive such distribution" within the meaning of subsection (d) above), and
(ii) a subdivision or combination, as the case may be, of the number of
shares of Class A Common Stock outstanding immediately prior to such
reclassification into the number of shares of Class A Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of subsection (c) above).
(f) For the purpose of any computation under subsection (b) or
(d) above, the current market price per share of Class A Common Stock on
any day shall be
<PAGE>
24
deemed to be the average of the Closing Prices of the Class A Common Stock
for the 20 consecutive Trading Days selected by the Board of Directors
commencing no more than 30 Trading Days before and ending no later than the
day before the day in question; provided that, in the case of clause (d),
if the period between the date of the public announcement of the dividend
or distribution and the date for the determination of holders of Class A
Common Stock entitled to receive such dividend or distribution (or, if
earlier, the date on which the Class A Common Stock goes "ex-dividend" in
respect of such dividend or distribution) shall be less than 20 Trading
Days, the period shall be such lesser number of Trading Days but, in any
event, not less than five Trading Days.
(g) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
of such price; provided, however, that any adjustments which by reason of
this clause (g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment and provided further that
adjustments shall be required and made in accordance with the provisions of
this Section IX (other than this clause (g)) not later than such time as
may be required in order to preserve the tax free nature of a distribution
to the holders of shares of Class A Common Stock. Anything in this clause
(g) to the contrary notwithstanding, the corporation shall be entitled, at
its option, to make such reductions in the Conversion Price, in addition to
those required by this Section IX, as it in its discretion shall determine
to be advisable in order that any stock dividend, subdivision or
combination of shares, distribution of capital stock or rights or warrants
to purchase stock or securities, or distribution of evidences of
indebtedness or assets (other than cash dividends or distributions paid
from earnings) or other event shall be a tax free distribution for federal
income tax purposes. All calculations under this clause (g) shall be made
to the nearest cent.
(h) Whenever the Conversion Price is adjusted as herein provided,
the corporation shall promptly mail a certificate of a firm of independent
public accountants setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment
and the manner of computing same, which certificate shall constitute
conclusive evidence, absent manifest error, of the correctness of such
adjustment. The certificate shall be mailed to each Holder at his last
address as the same appears on the stock transfer books of the corporation
and to the Conversion Agent.
(i) In case of (i) any consolidation of the corporation with, or
merger of the corporation into, any other entity, (ii) any merger of
another entity into the corporation (other than a merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Class A Common Stock) or (iii) any sale or transfer
of all or substantially all of the assets of the
<PAGE>
25
corporation, each Holder shall have the right thereafter to convert such
share only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of
the number of shares of Class A Common Stock into which such share of
Series I Preferred Stock might have been converted immediately prior to
such consolidation, merger, sale or transfer, assuming such holder of Class
A Common Stock is not an entity with which the corporation consolidated or
into which the corporation merged or which merged into the corporation or
to which such sale or transfer was made, as the case may be (a "constituent
entity"), or an affiliate of a constituent entity and failed to exercise
its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such consolidation, merger, sale or
transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer is
not the same for each share of Class A Common Stock held immediately prior
to such consolidation, merger, sale or transfer by other than a constituent
entity or an affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purpose of this subsection (i) the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). If
necessary, appropriate adjustment shall be made in the application of the
provisions set forth herein with respect to the rights and interests
thereafter of the Holders, to the end that the provisions set forth herein
shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of the shares. Any such
adjustment shall be evidenced by a certificate of independent public
accountants and a notice of such adjustment filed and mailed in the manner
set forth in subsection (h) above and containing the information set forth
in such subsection (h), and any adjustment so certified, shall for all
purposes hereof conclusively be deemed to be an appropriate adjustment,
absent manifest error. The above provisions shall similarly apply to
successive consolidations, mergers, sales or transfers.
For purposes of this Section IX, "Class A Common Stock" includes any
stock of any class of the corporation (other than Class B Common Stock) which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
corporation and which is not subject to redemption by the corporation. However,
subject to the provisions of subsection (i) above, shares issuable on conversion
of shares of Series I Preferred Stock shall include only shares of the class
designated as Common Stock of the corporation on the date of the initial
issuance of Series I Preferred Stock by the corporation, or shares of any class
or classes resulting from any reclassification thereof and which have no
preferences in respect of dividends or amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or
<PAGE>
26
winding-up of the corporation and which are not subject to redemption by the
corporation; provided that, if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
In case:
(i) the corporation shall take any action that would result in an
adjustment to the Conversion Price; or
(ii) of any consolidation, merger or share exchange to which the
corporation is a party and for which approval of any stockholders of the
corporation is required, or of the sale or transfer of all or substantially
all of the assets of the corporation; or
(iii) of the voluntary or involuntary dissolution, liquidation
or winding-up of the corporation;
then the corporation shall cause to be filed with any Conversion Agent and shall
cause to be mailed to each Holder at its last address as the same appears on the
books of the corporation, at least 15 days prior to the applicable record or
effective date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such actions, or, if the record is not
to be taken, the date as of which the holders of Class A Common Stock of record
are to be determined, or (B) the date on which such consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of Class
A Common Stock of record shall be entitled to exchange their shares of Class A
Common Stock for securities, cash or other property deliverable upon such
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up. Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(i) through (iii) above.
The corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Class A Common Stock on conversion of shares of Series I Preferred Stock
pursuant hereto; provided, however, that the corporation shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Class A Common Stock in a name other than that of
the Holder of the shares of Series I Preferred Stock to be converted, and no
such issue or delivery shall be made unless and until the Person requesting such
issue or delivery has paid to the corporation the amount of any such tax or has
established, to the satisfaction of the corporation, that such tax has been
paid.
<PAGE>
27
The corporation covenants that all shares of Class A Common Stock
which may be issued upon conversions of shares of Series I Preferred Stock will,
upon issue, be duly and validly issued, fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights.
The corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Class A Common Stock, for the purpose of effecting
conversions of shares of Series I Preferred Stock, the full number of shares of
Class A Common Stock deliverable upon the conversion of all outstanding shares
of Series I Preferred Stock not theretofore converted.
(B) Special Conversion Rights upon Change of Control. (1) Upon the
------------------------------------------------
occurrence of a Change of Control, each Holder shall have the right, at the
Holder's option, during the Special Conversion Exercise Period to convert all,
but not less than all, of such Holder's Series I Preferred Stock into Class A
Common Stock at an adjusted Conversion Price per share equal to the Special
Conversion Price. The corporation may, at its option, in lieu of providing
Class A Common Stock upon any such conversion, provide the Holder, out of funds
legally available therefor, with cash equal to the Market Value of the Class A
Common Stock multiplied by the number of shares of Class A Common Stock into
which such shares of Series I Preferred Stock would have been convertible
immediately prior to such Change of Control at an adjusted Conversion Price
equal to the Special Conversion Price. Series I Preferred Stock which becomes
convertible pursuant to a special conversion right shall, unless so converted,
remain convertible into Class A Common Stock as provided pursuant to Section
IX(A). If a Change of Control involves a consolidation, merger or sale of
assets of the corporation, the Holders exercising their conversion rights will
be entitled to receive the same consideration as would be received by a holder
of the number of shares of Class A Common Stock into which their shares of
Series I Preferred Stock would have been converted pursuant to their special
conversion rights.
(2) Upon the occurrence of a Change of Control, within 30 days after
such occurrence, the corporation shall mail to each Holder a notice of such
occurrence (the "Special Conversion Notice") setting forth the following:
(i) the event constituting the Change of Control, together with
such other information as may be required pursuant to the securities laws;
(ii) the Special Conversion Exercise Period and the Special
Conversion Termination Date;
(iii) the Special Conversion Price;
<PAGE>
28
(iv) the Conversion Price then in effect and the continuing
conversion rights, if any, under Section IX(A);
(v) the name and address of the paying agent and Conversion
Agent;
(vi) that the Holders who want to convert shares of Series I
Preferred Stock at the Special Conversion Price must exercise such
conversion right during the Special Conversion Exercise Period;
(vii) that exercise of such special conversion right shall be
irrevocable except that Holders shall have the right to withdraw their
election to exercise the special conversion right at any time prior to the
close of business on the Special Conversion Termination Date by providing
written, telegraphic or facsimile transmission notice of withdrawal to the
Conversion Agent, which notice, to be effective, must be received by the
Conversion Agent prior to the close of business on the Special Conversion
Termination Date;
(viii) that no dividends on shares of Series I Preferred Stock
(or portions thereof) tendered for conversion (and not withdrawn) shall
accrue from and after the Special Conversion Termination Date; and
(ix) that the corporation (or a successor entity, if applicable)
may, at its option, elect to pay cash (specifying the amount thereof per
share) for all shares of Series I Preferred Stock tendered for conversion.
(3) A Holder must exercise the special conversion right during the
Special Conversion Exercise Period or such special conversion right shall
expire. Such right must be exercised in accordance with Section IX(A) to the
extent the procedures in Section IX(A) are consistent with the special
provisions of Section IX(B)(2) and this Section IX(B)(3). Exercise of such
conversion right shall, except as provided above, be irrevocable, and dividends
on Series I Preferred Stock tendered for conversion shall cease to accrue from
and after the Special Conversion Termination Date. The conversion date with
respect to the exercise of a special conversion right arising upon a Change of
Control shall be the Special Conversion Termination Date.
X. Merger, Consolidation and Sale of Assets.
----------------------------------------
Without the affirmative vote or consent of the Holders of a majority
of the issued and outstanding shares of Series I Preferred Stock, the
corporation 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
<PAGE>
29
such consolidation or merger (if other than the corporation) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (the "resulting entity") 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 I Preferred Stock shall remain unchanged or be
converted into or exchanged for and shall become shares of such resulting
entity, having in respect of such resulting entity the same (or more favorable)
powers, preferences and relative participating, optional or other special
rights, and the same (or more favorable) qualifications, limitations or
restrictions thereon, than the Series I Preferred Stock had immediately prior to
such transaction (provided that (i) if, in accordance with the provisions
hereof, the Series I Preferred Stock shall become convertible into a different
amount or type of securities, cash or other property, such change shall not be
deemed to be a change in the powers, preferences and relative participating,
optional or other special rights of the Series I Preferred Stock and (ii) the
fact that the resulting entity has authorized or outstanding any securities
other than Senior Stock, shall not be deemed to be a change in the powers,
preferences and relative participating, optional or other special rights of the
Series I Preferred Stock for purposes of this Section X); and (c) immediately
after giving effect to such transaction, no Voting Rights Triggering Event shall
have occurred and be continuing; provided, however, that the foregoing
provisions of this Section X shall not be applicable to a transaction or event
that constitutes a Change of Control.
XI. Covenant to Report.
------------------
Notwithstanding that the corporation may not be subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act, the
corporation will file with the SEC and provide the Transfer Agent and the
holders of the Series I Preferred Stock with all information, documents and
reports specified in Section 13 and Section 15(d) of the Exchange Act.
XII. Mutilated or Missing Series I Preferred Stock Certificates.
----------------------------------------------------------
If any of the Series I Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the corporation shall issue, in exchange
and in substitution for and upon cancellation of the mutilated Series I
Preferred Stock certificate, or in lieu of and substitution for the Series I
Preferred Stock certificate lost, stolen or destroyed, a new Series I Preferred
Stock certificate of like tenor and representing an equivalent amount of shares
of Series I Preferred Stock, but only upon receipt of evidence of such loss,
theft or destruction of such Series I Preferred Stock certificate and indemnity,
if requested, satisfactory to the corporation and the Transfer Agent (if other
than the corporation).
<PAGE>
30
XIII. Reissuance; Preemptive Rights.
-----------------------------
(i) Shares of Series I Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed or exchanged,
shall (upon compliance with any applicable provisions of the laws of the State
of Delaware) have the status of authorized and unissued shares of preferred
stock undesignated as to series and may be redesignated and reissued as part of
any series of Additional Preferred Stock other than the Series I Preferred
Stock.
(ii) No shares of Series I Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such
securities or such warrants, rights or options may be designated, issued or
granted.
XIV. Business Day.
------------
If any payment or redemption shall be required by the terms hereof to
be made on a day that is not a Business Day, such payment, redemption or
exchange shall be made on the immediately succeeding Business Day and no further
dividends shall accumulate after the day payment was required.
XV. Headings of Subdivisions.
------------------------
The headings of various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
XVI. Severability of Provisions.
--------------------------
If any right, preference or limitation of the Series I Preferred Stock
set forth in these resolutions and the Certificate of Designations filed
pursuant hereto (as such Certificate of Designations may be amended from time to
time) is invalid, unlawful or incapable of being enforced by reason of any rule
or law or public policy, all other rights, preferences and limitations set forth
in such Certificate of Designations, as amended, which can be given effect
without the invalid, unlawful or unenforceable right, preference or limitation
shall, nevertheless remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.
<PAGE>
31
XVII. Notice to the Corporation.
-------------------------
All notices and other communications required or permitted to be given
to the corporation hereunder shall be made by first-class mail, postage prepaid,
to the corporation at its principal executive offices (currently located on the
date of the adoption of these resolutions at the following address: Cablevision
Systems Corporation, One Media Crossways, Woodbury, New York 11797, Attention:
General Counsel). Minor imperfections in any such notice shall not affect the
validity thereof.
<PAGE>
32
XVIII. Limitations.
-----------
Except as may otherwise be required by law, the shares of Series I
Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in this resolution (as such resolution may be amended from time to
time) or otherwise in the Certificate of Incorporation of the corporation.
IN WITNESS WHEREOF, this Certificate has been signed on this
____ day of November, 1995.
CABLEVISION SYSTEMS CORPORATION
By:_____________________________________
Name:
Title:
Attested by:
- ------------------
<PAGE>
EXHIBIT 99.6
================================================================================
CABLEVISION SYSTEMS CORPORATION
Issuer,
TO
THE BANK OF NEW YORK
Trustee,
__________________________
SUPPLEMENTAL INDENTURE NO. 1
Dated as of November 1, 1995
____________________________
8-1/2% Convertible Subordinated Debentures due 2007
================================================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of November 1, 1995 (the
"Supplemental Indenture") 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 heretofore delivered to the Trustee an Indenture dated as
of November 1, 1995, a form of which has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, as an exhibit
to Amendment No. 1 to the Company's Registration Statement on Form S-3
(Registration No. 33-62313) (the "Indenture"), providing for the issuance from
time to time of Subordinated Debt Securities of the Company.
Section 301 of the Indenture provides for various matters with respect to
any series of Securities issued under the Indenture to be established in an
indenture supplemental to the Indenture.
Section 901(7) of the Indenture provides for the Company and the Trustee to
enter into an indenture supplemental to the Indenture to establish the form or
terms of Securities of any series as provided by Sections 201 and 301 of the
Indenture.
The Board of Directors of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All of the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding agreement in
accordance with its terms and for the purposes herein expressed, have been
performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Securities provided for herein by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities or of any series thereof, as follows:
<PAGE>
2
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
----------------------------------
SECTION 1.1. Relation to Indenture.
---------------------
This Supplemental Indenture constitutes an integral part of the
Indenture.
SECTION 1.2. Definitions.
-----------
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided for or unless the context otherwise requires:
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Indenture; and
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture.
"Additional Preferred Stock" has the meaning specified in Article Four
of the Company's Certificate of Incorporation.
"ASE" means the American Stock Exchange.
"Change of Control" with respect to the Company shall be deemed to
have occurred in the event that (A) any Person, or group (within the meaning of
Rule 13d-5(b)(1) under the Securities Exchange Act of 1934), other than Dolan,
becomes entitled to elect a majority of the Board of Directors of the Company;
(B) any Person, or group (within the meaning of Rule 13d-5(b)(1) under the
Securities Exchange Act of 1934), other than Dolan, is or becomes the beneficial
owner (as defined in Section 13(d) of the Securities Exchange Act of 1934 and
the rules promulgated thereunder), directly or indirectly, of shares
representing 50% or more of the outstanding voting power of the Company; (C) a
transaction or an event occurs in connection with which 66 2/3% or more of the
aggregate outstanding amount of Common Stock of the Company shall be exchanged
for, converted into, acquired for or constitutes solely the right to receive,
cash, securities of an entity other than the Company or any of its subsidiaries,
property or other assets (whether by means of an exchange offer, tender offer,
consolidation, merger (other than a holding company reorganization or a change
of domicile merger), combination or similar transaction); or (D) there occurs
the conveyance, sale, lease, assignment, transfer or other disposal of (but
excluding any mortgage or pledge of, or other grant of a security interest in)
all or substantially all of the Company's property, business or assets;
provided, however, that a Change of Control will not be deemed to have occurred
with respect to either of the following transactions or events (unless the
Company shall have elected in the context of a
<PAGE>
3
specific transaction or event that such transaction or event shall constitute a
Change of Control): (a) any transaction or event in which more than 50% (by
value as determined in good faith by the Board of Directors of the Company) of
the consideration received by holders of Class A Common Stock consists of
Marketable Stock, or (b) any consolidation or merger of the Company in which the
holders of Common Stock immediately prior to such transaction own, directly or
indirectly, (1) 50% or more of the common equity securities of the sole
surviving entity (or of the ultimate parent of such sole surviving entity)
outstanding at the time immediately after such consolidation or merger and (2)
securities representing 50% or more of the combined voting power of the
surviving entity's voting power (or the voting power of the ultimate parent of
such surviving entity) outstanding at such time. If a conveyance, sale, lease,
assignment, transfer or other disposal of all or substantially all of the
Company's property, business or assets occurs and the consideration, including
Marketable Stock, received by the Company is not subsequently distributed to the
holders of Class A Common Stock, a Change of Control shall be deemed to have
occurred.
"Class B Common Stock" means the Class B Common Stock, par value $.01
per share, of the Company.
"Closing Price" means, for each Trading Day, the last reported sale
price regular way on the ASE (or, if the ASE is not the principal national
securities exchange on which the Class A Common Stock is listed or admitted for
trading, on such other national securities exchange or, if the Class A Common
Stock is not so listed or admitted for trading on the ASE or any other national
securities exchange, on the NASDAQ National Market System or, if the Class A
Common Stock is not quoted on the NASDAQ National Market System, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
Company for that purpose).
"Dolan" means Charles F. Dolan, his spouse, his descendants or any
spouse of any such descendants, and trusts for the benefit of, inter alia, him,
his spouse, his descendants or any spouse of any such descendants, and any
estate, testamentary trust, or executor, administrator, conservator or legal or
personal representative of any of the foregoing, or any partnership, limited
liability company, corporation or similar entity all of the owners of which are
comprised of one or more of the foregoing.
"Exchange Date" means the date on or after January 1, 1998 on which
shares of 8-1/2% Series I Cumulative Convertible Exchangeable Preferred Stock of
the Company are exchanged, in whole but not in part, for the Exchange
Debentures.
"Exchange Debentures" has the meaning set forth in Section 2.1 hereof.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing
<PAGE>
4
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy. In determining Fair Market Value for purposes of Section
2.4(d)(iv) hereof in the event of the Rainbow Spin-off, if the securities being
distributed to the holders of Class A Common Stock in the Rainbow Spin-off are
expected to be publicly traded, the determination of Fair Market Value by the
Board of Directors shall be based on the expected fully distributed public
market value of such securities.
"Junior Stock" means all classes or series of Common Stock of the
Company and any Capital Stock, including any series of Additional Preferred
Stock hereafter created by the Board of Directors, the terms of which Capital
Stock or Additional Preferred Stock do not expressly provide that it ranks
senior to or on a parity with the 8 1/2% Series I Cumulative Convertible
Exchangeable Preferred Stock as to dividends and distributions upon liquidation,
dissolution and winding-up of the Company.
"Marketable Stock" means common equity securities of (i) any entity
that is the successor to all or substantially all of the business or assets of
the Company as a result of a Change of Control (or the ultimate parent of such
successor) or (ii) a wholly-owned subsidiary of the Company, which in the case
of either clause (i) or (ii) is (or will, upon distribution thereof, be) listed
or quoted on the ASE or another national securities exchange or the NASDAQ
National Market System.
"Rainbow Spin-off" means the payment 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 any
successor to the assets or equity interests thereof, or of another entity,
holding only assets that were held by Rainbow Programming Holdings, Inc.
immediately prior to the acquisition thereof by such entity, being held by all
or any portion of the shareholders of the Company.
"Senior Indebtedness" for purposes of the Exchange Debentures (but not
any other series of Securities unless expressly made applicable thereto as may
be determined under Section 301 of the Indenture), means 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 Exchange Debentures, whether outstanding on the date hereof 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 Exchange Debentures. It is expressly intended that the Company's
9 7/8% Senior
<PAGE>
5
Subordinated Debentures due 2013, 10 3/4% Senior Subordinated Debentures due
2004, 9 7/8% Senior Subordinated Debentures due 2023 and 9 1/4% Senior
Subordinated Notes due 2005 shall constitute Senior Debt. 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 reasons of some wrongful
conduct on the part of the holders of such Debt).
"Trading Day" means any day on which the ASE or other applicable stock
exchange or market is open for business.
ARTICLE TWO
THE SERIES OF DEBENTURES
------------------------
SECTION 2.1. Title of the Securities; Maturity.
---------------------------------
There shall be a series of Securities designated the "8-1/2%
Convertible Subordinated Debentures due 2007" (the "Exchange Debentures"). The
Exchange Debentures will mature on November 1, 2007.
SECTION 2.2. Limitation on Aggregate Principal Amount; Dates of
--------------------------------------------------
Exchange Debentures.
-------------------
The aggregate principal amount of the Exchange Debentures shall be
limited to $345,000,000.
SECTION 2.3. Interest and Interest Rates.
-----------------------------------------
The Exchange Debentures will bear interest at a rate of 8-1/2% from
the Exchange Date or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually in cash in arrears
on January 1 and July 1 of each year, commencing with the first such date after
the Exchange Date (each, an "Interest Payment Date"), to the Person in whose
name such Exchange Debenture is registered at the close of business on December
15 or June 15 next preceding such Interest Payment Date (each, a "Regular Record
Date"). Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months and actual number of days elapsed. The interest so
payable on any Exchange Debenture which is not punctually paid or duly provided
for on any Interest Payment Date shall forthwith cease to be payable to the
Person in whose name such Exchange Debenture is registered on the relevant
Regular Record Date, and such defaulted interest shall instead be payable to the
Person in whose name such Exchange
<PAGE>
6
Debenture is registered on the Special Record Date or other specified date
determined in accordance with the Indenture.
SECTION 2.4. Conversion of Exchange Debentures.
---------------------------------
(a) Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this Article at
any time prior to redemption or maturity thereof, at the option of the Holder
thereof, any Exchange Debenture or any portion of the principal amount thereof
which is $1,000 or an integral multiple of $1,000 may be converted, at any time
prior to redemption or maturity thereof, at the principal amount thereof, or
such portion thereof, into that number of fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100 of a share) of Class A
Common Stock obtained by dividing the principal of the Exchange Debenture or
portion thereof surrendered for conversion by the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion. If an Exchange
Debenture or portion thereof is called for redemption, such conversion right in
respect of the Exchange Debenture or portion thereof so called shall expire at
the close of business on the fifth Business Day preceding the Redemption Date
(except with respect to deemed conversions provided for in Section 2.6(i)),
unless the Company defaults in making the payment due upon redemption, in which
case such right of conversion shall be reinstated.
The price at which shares of Class A Common Stock shall be delivered
upon conversion (herein called the "Conversion Price") shall be initially $67.44
per share of Class A Common Stock. The Conversion Price shall be adjusted in
certain instances as provided in clause (d) below.
(b) Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Exchange Debenture to be converted shall surrender such Exchange Debenture duly
endorsed or assigned to the Company or in blank, at the Corporate Trust Office
or at any other office or agency of the Company maintained for that purpose
pursuant to Section 1002, accompanied by written notice to the Company at the
Corporate Trust Office or at any other office or agency of the Company
maintained in that purpose pursuant to Section 1002 that the Holder elects to
convert such Exchange Debenture or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted. Such notice
shall also state the name(s), together with address(es), in which the
certificate(s) for shares of Class A Common Stock shall be issued.
Except as provided in the next sentence, Exchange Debentures
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment
<PAGE>
7
Date shall be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Exchange Debentures being
surrendered for conversion. Subject to the provisions of Section 307 relating
to the payment of Defaulted Interest by the Company, the interest payment with
respect to an Exchange Debenture called for redemption on a Redemption Date
during the period from the fifth Business Day following any Regular Record Date
next preceding any Interest Payment Date to the fifth Business Day following
such Interest Payment Date shall be payable on such Interest Payment Date to the
Holder of such Exchange Debenture at the close of business on such Regular
Record Date notwithstanding the conversion of such Exchange Debenture after the
close of business on such Regular Record Date and prior to the opening of
business on such Interest Payment Date, and the Holder converting such Exchange
Debenture need not include a payment of such interest payment amount upon
surrender of such Exchange Debenture for conversion. In the case of any
Exchange Debenture which is converted after any Regular Record Date and on or
prior to the next succeeding Interest Payment Date, interest whose Stated
Maturity is due on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) shall be paid to the Person in whose name
that Exchange Debenture (or one or more Predecessor Securities) is registered at
the close of business on such Regular Record Date. In the case of any Exchange
Debenture which is converted on or after any Interest Payment Date, interest
whose Stated Maturity is due on such Interest Payment Date shall be payable on
such Interest Payment Date to the Holder of such Exchange Debenture on the
Regular Record Date relating to such Interest Payment Date. Except as otherwise
expressly provided in the immediately preceding sentence in the case of any
Exchange Debenture which is converted, interest whose Stated Maturity is after
the date of conversion of such Exchange Debenture shall not be payable.
Except as provided herein and subject to the foregoing, no payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Exchange Debentures surrendered for conversion or on account of any
dividends on the Class A Common Stock issued upon conversion.
Exchange Debentures shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Exchange
Debentures for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Exchange Debentures as Holders shall
cease, and the Person or Persons entitled to receive the Class A Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such Class A Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver to the Corporate Trust Office or at any other office or agency of the
Company mentioned pursuant to Section 1002 a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share, as provided in clause (c)
below.
<PAGE>
8
In the case of any Exchange Debenture which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Exchange Debenture or Exchange Debentures of authorized denominations in
aggregate principal amount equal to the unconverted portion of the principal
amount of such Exchange Debenture.
(c) Fractions of Shares.
-------------------
No fractional interest in a share of Class A Common Stock shall be
issued upon the conversion of Exchange Debentures. If more than one Exchange
Debenture shall be surrendered for conversion at one time by the same Holder,
the number of full shares which shall be issuable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of the Exchange
Debentures (or specified portions thereof) so surrendered. Any fractional
interest in a share of Class A Common Stock resulting from conversion of any
Exchange Debenture (or specified portions thereof) shall be paid in cash
(computed to the nearest cent) based on the Closing Price of the Class A Common
Stock on the last Trading Day prior to the date on which such Exchange Debenture
is surrendered for conversion in the manner set forth above.
(d) Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be adjusted from time to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Class A Common
Stock, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of Class A Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum of
such number of shares and the total number of shares constituting such dividend
or other distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this clause (i), the number of shares of Class A Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company. The Company will not pay any dividend or make any distribution on
shares of Class A Common Stock held in the treasury of the Company.
(ii) In case the Company shall issue rights or warrants to all
holders of its Class A Common Stock entitling them to subscribe for, purchase or
acquire shares of Class A Common Stock at a price per share less than the
current market price per share (determined as provided in clause (vi) of this
Section) of the Class A Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
in effect at the opening of business on the day following the date fixed
<PAGE>
9
for such determination shall be reduced by multiplying such Conversion Price by
a fraction the numerator of which shall be the number of shares of Class A
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Class A Common Stock which the
aggregate of the offering price of the total number of shares of Class A Common
Stock so offered for subscription, purchase or acquisition would purchase at
such current market price and the denominator of which shall be the number of
shares of Class A Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Class A Common Stock
so offered for subscription, purchase or acquisition, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this clause (ii), the
number of shares of Class A Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company will not issue
any rights or warrants in respect of shares of Class A Common Stock held in the
treasury of the Company.
(iii) In case the outstanding shares of Class A Common Stock shall be
subdivided into a greater number of shares of Class A Common Stock, the
Conversion Price in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
reduced, and, conversely, in case the outstanding shares of Class A Common Stock
shall each be combined into a smaller number of shares of Class A Common Stock,
the Conversion Price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(iv) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Class A Common Stock (a) evidences of its indebtedness
and/or (b) cash or other assets (excluding (x) any rights or warrants referred
to in clause (ii) above, (y) any dividend or distribution referred to in clause
(i) above, and (z) cash dividends or distributions from earnings unless the sum
of (1) all such cash dividends and distributions made within the preceding 12
months in respect of which no adjustment has been made and (2) any cash and the
fair market value of other consideration paid in respect of any repurchases of
Common Stock by the Company or any of its subsidiaries within the preceding 12
months in respect of which no adjustment has been made, exceeds 20% of the
Company's market capitalization (being the product of the then current market
price per share (determined as provided in subsection (vi) below) of the Class A
Common Stock times the aggregate number of shares of Class A Common Stock and
Class B Common Stock then outstanding) on the record date for such
distribution), then in each case, the Conversion Price in effect at the opening
of business on the day following the date fixed for the determination of holders
of Common Stock entitled to receive such distribution shall be adjusted by
multiplying such Conversion Price by a fraction of which the numerator shall be
the current market price per share (determined as provided in subsection (vi)
below) of the Class A Common Stock on such
<PAGE>
10
date of determination (or, if earlier, on the date on which the Class A Common
Stock goes "ex-dividend" in respect of such distribution) less the then Fair
Market Value as determined by the Board of Directors (whose determination shall
be conclusive and shall be described in a statement filed with the Trustee) of
the portion of the other assets or evidences of indebtedness so distributed (and
for which an adjustment to the Conversion Price has not previously been made
pursuant to the terms of this Section 2.4) applicable to one share of Class A
Common Stock, and the denominator shall be such current market price per share
of the Class A Common Stock, such adjustment to become effective immediately
after the opening of business on the day following such date of determination.
The following transactions shall be excluded from the foregoing clauses (1) and
(2): (i) any conversion of Class B Common Stock into Class A Common Stock, (ii)
repurchases of Common Stock issued under the Company's stock incentive programs,
and (iii) dividends or distributions payable-in-kind in additional shares of, or
warrants, rights, calls or options exercisable for or convertible into
additional shares of, Junior Stock.
(v) The reclassification of Class A Common Stock into securities
including securities other than Class A Common Stock (other than any
reclassification upon a consolidation or merger to which clause (k) applies)
shall be deemed to involve (a) a distribution of such securities other than
Class A Common Stock to all holders of Class A Common Stock (and the effective
date of such reclassification shall be deemed to be "the date fixed for the
determination of holders of Common Stock entitled to receive such distribution"
within the meaning of clause (iv) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Class A Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Class A Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of clause (iii) of this
Section).
(vi) For the purpose of any computation under clauses (ii) or (iv)
above, the current market price per share of Class A Common Stock on any day
shall be deemed to be the average of the Closing Prices for the 20 consecutive
Trading Days selected by the Board of Directors commencing no more than 30
Trading Days before and ending no later than the day before the day in question;
provided that, in the case of clause (iv), if the period between the date of the
public announcement of the dividend or distribution and the date for the
determination of holders of Class A Common Stock entitled to receive such
dividend or distribution (or, if earlier, the date on which the Class A Common
Stock goes "ex-dividend" in respect of such dividend or distribution) shall be
less than 20 Trading Days, the period shall be such lesser number of Trading
Days but, in any event, not less than five Trading Days.
<PAGE>
11
(vii) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
clause (vii)) would require an increase or decrease of a least 1% in such price;
provided, however, that any adjustments which by reason of this clause (vii) are
- -------- -------
not required to be made shall be carried forward and taken into account in any
subsequent adjustment and provided, further, that adjustments shall be required
and made in accordance with the provisions of this Section 2.4 (other than this
clause (vii)) not later than such time as may be required in order to preserve
the tax free nature of a distribution to the holders of shares of Class A Common
Stock. Anything in this clause (vii) to the contrary notwithstanding, the
Company shall be entitled, at its option, to make such reductions in the
Conversion Price, in addition to those required by this clause (d), as it in its
discretion shall determine to be advisable in order that any stock dividend,
subdivision or combination of shares, distribution of capital stock, or rights
or warrants to purchase stock or securities, or distribution of evidences of
indebtedness or assets (other than cash dividends or distributions paid from
earnings) or other event shall be a tax free distribution for federal income tax
purposes. All calculations under this clause (vii) shall be made to the nearest
cent.
(e) Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided, the
Company shall obtain a certificate of a firm of independent public accountants
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment and the manner of
computing same, which certificate shall constitute conclusive evidence, absent
manifest error, of the correctness of such adjustment. Such certificate shall
forthwith be filed at each office or agency maintained for the purpose of
conversion of Exchange Debentures pursuant to Section 1002 and shall be mailed
by the Company to all Holders at their last addresses as they shall appear in
the Security Register.
(f) Notice of Certain Corporate Action.
----------------------------------
In case:
(i) the Company shall take any action that would cause an adjustment
to the Conversion Price; or
(ii) of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any stockholders of the
Company is required, or of the sale or transfer of all or substantially all
of the assets of the Company; or
(iii) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
<PAGE>
12
then the Company shall cause to be filed at the Corporate Trust Office and each
other office or agency maintained for the purpose of conversion of Exchange
Debentures pursuant to Section 1002 and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
15 days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Class A Common Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, or (y) the date on which such consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding-up is expected to become
effective, and the date as of which it is expected that holders of Class A
Common Stock of record shall be entitled to exchange their shares of Class A
Common Stock for securities, cash or other property deliverable upon such
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up. Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings described in subclauses
(i) through (iii) of this clause (f). If at the time the Trustee shall not be
the conversion agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.
(g) Company to Reserve Class A Common Stock.
---------------------------------------
Upon and following the issuance of the Exchange Debentures, the
Company shall at all times reserve and keep available out of its authorized but
unissued Class A Common Stock, for the purpose of effecting the conversion of
Exchange Debentures, the full number of shares of Class A Common Stock then
issuable upon the conversion of all outstanding Exchange Debentures not
theretofore converted.
(h) Taxes on Conversions.
--------------------
The Company will pay any and all documentary stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of shares
of Class A Common Stock on conversion of Exchange Debentures pursuant hereto.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of Class
A Common Stock in a name other than that of the Holder of the Exchange Debenture
or Exchange Debentures to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.
(i) Covenant as to Class A Common Stock.
-----------------------------------
The Company covenants that all shares of Class A Common Stock which
may be issued upon conversion of Exchange Debentures will, upon issue, be duly
and validly
<PAGE>
13
issued, fully paid and non-assessable, free of all liens and charges and not
subject to any preemptive right.
(j) Cancellation of Converted Exchange Debentures.
---------------------------------------------
All Exchange Debentures delivered for conversion shall be delivered to
the Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
(k) Provisions in Case of Consolidation, Merger or Sale of Assets.
-------------------------------------------------------------
In case of (i) any consolidation of the Company with, or merger of the
Company into, any other Person, (ii) any merger of another Person into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Class A Common
Stock) or (iii) any sale or transfer of all or substantially all of the assets
of the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each security then outstanding shall have the right thereafter, during the
period such Exchange Debenture shall be convertible as specified in clause (a)
above, to convert such Exchange Debenture only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of shares of Class A Common Stock
into which such Exchange Debenture might have been converted immediately prior
to such consolidation, merger, sale or transfer, assuming such holder of Class A
Common Stock is not a person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (a "Constituent Person"), or an Affiliate
of a Constituent Person and failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Class
A Common Stock held immediately prior to such consolidation, merger, sale or
transfer by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this clause (k) the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this clause (k) shall similarly apply to
successive consolidations, mergers, sales or transfers.
<PAGE>
14
(l) Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of securities. The Trustee shall not be responsible for
the Company's failure to comply with this Article. Each conversion agent other
than the Company shall have the same protection under this Section as the
Trustee.
SECTION 2.5. Redemption.
----------
The Exchange Debentures may be redeemed at the option of the Company,
in whole or in part, at any time on or after November 1, 1999, on not less than
30 nor more than 60 days' prior notice at the redemption prices (expressed as
percentages of principal amount) set forth below, together with accrued and
unpaid interest, if any, to the date of redemption, if redeemed during the 12-
month period beginning on November 1 of the years indicated (subject to the
right of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date):
<TABLE>
<CAPTION>
Year Redemption Price
------ ----------------
<S> <C>
1999................. 102.8%
2000................. 101.4
2001 and thereafter.. 100.0
</TABLE>
SECTION 2.6. Purchase of the Exchange Debentures at the Option of
----------------------------------------------------
the Holder.
----------
(a) Upon the occurrence of any Change of Control of the Company
occurring prior to the Maturity of the Exchange Debentures, each Holder shall
have the right, at such Holder's option, to require the Company to purchase, on
the Change of Control Purchase Date referred to below, all or any part of such
Holder's Exchange Debentures for cash at a price equal to 100% of the principal
amount thereof, together with accrued and unpaid interest thereon to such date
(the "Change of Control Purchase Price"). Notwithstanding the foregoing, a
holder of Exchange Debentures will not have the option to require the Company to
purchase all or any part of the Exchange Debentures if either (i) the Closing
Price of the Class A Common Stock for five of the ten Trading Days immediately
preceding the date of the Change of Control equals or exceeds 105% of the then
prevailing Conversion Price or (ii) the consideration paid for the Class A
Common Stock in a transaction constituting the Change of Control consists of
cash, Marketable Stock or a combination of cash and Marketable Stock and as a
result of such Change of Control, the Class A Common Stock becomes convertible
into cash and/or Marketable Stock, and the
<PAGE>
15
aggregate fair market value per share of such consideration is at least 105% of
the then prevailing Conversion Price in effect immediately before the closing of
such transaction.
(b) Within 30 Business Days after any such Change of Control, the
Company shall give to the Trustee and to each Holder of the Exchange Debentures
(and to beneficial owners as required by applicable law, including, without
limitation, Rule 13e-4 under the Exchange Act) in the manner provided in Section
106 of the Indenture notice regarding such Change of Control setting forth the
following:
(i) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Exchange Debentures
at the Change of Control Purchase Price;
(ii) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro forma
---------
historical income, cash flow and capitalization after giving effect to such
Change of Control);
(iii) the last date on which the Holder's right to have its Exchange
Debentures purchased may be exercised (the "Expiration Date"), which shall
be, subject to any contrary requirements of applicable law, not less than
30 days or more than 60 days after the date of such notice;
(iv) the Change of Control Purchase Price;
(v) a settlement date (the "Change of Control Purchase Date") for the
purchase of Exchange Debentures, which shall be within five Business Days
after the Expiration Date;
(vi) the name and address of the Trustee and of any other office or
agency maintained for the purpose of the surrender of Exchange Debentures
for purchase;
(vii) the procedures that a Holder must follow in order to have its
Exchange Debentures purchased, including a copy of the form of Change of
Control Purchase Notice referred to in Section 2.6(c) hereof;
(viii) that any Exchange Debenture not tendered will continue to
accrue interest; and
(ix) that, unless the Company defaults in payment of the Change of
Control Purchase Price, any Exchange Debentures accepted for payment of the
Change of Control Purchase Price pursuant to a Change of Control Notice (as
defined in Section 2.6(d) below) shall cease to accrue interest after the
Change of Control Purchase Date.
<PAGE>
16
(c) Holders electing to have Exchange Debentures purchased must
deliver written notice (a "Change of Control Purchase Notice") to the Trustee or
to any other office or agency maintained for such purpose, of the exercise of
such right prior to the close of business on the Change of Control Purchase
Date. The Change of Control Purchase Notice must state:
(i) the certificate numbers of the Exchange Debentures to be delivered
by the Holder thereof for purchase by the Company;
(ii) the portion of the principal amount of Exchange Debentures to be
purchased, which portion must be $1,000 or an integral multiple thereof;
and
(iii) that such Exchange Debentures are to be purchased by the
Company on the Change of Control Purchase Date pursuant to the applicable
provisions of the Exchange Debentures.
(d) Upon receipt by the Trustee of any Change of Control Purchase
Notice specified in Section 2.6(c) hereof, the Trustee shall furnish to the
Company, in writing or by facsimile, a copy of such notice before the close of
business on the next Business Day following the date of receipt of such notice
from the Holder. Upon receipt by the Company of such notice, the Holder of the
Exchange Debenture in respect of which such Change of Control Purchase Notice
was given shall (unless such Change of Control Purchase Notice is withdrawn as
specified in the following paragraph) thereafter be entitled to receive solely
the Change of Control Purchase Price with respect to such Exchange Debenture.
Such Change of Control Purchase Price shall be due and payable as of the Change
of Control Purchase Date and shall be paid to such Holder promptly following the
later of (x) the Change of Control Purchase Date (provided the conditions in
Section 2.6(c) hereof, as applicable, have been satisfied) and (y) the date of
delivery of such Exchange Debenture to the Trustee or to the office or agency
referred to in Section 1002 of the Indenture by the Holder thereof in the manner
required by Section 2.6(c) hereof. Exchange Debentures in respect of which a
Change of Control Purchase Notice has been given by the Holder thereof may not
be converted into shares of Class A Common Stock on or after the date of the
delivery of such Change of Control Purchase Notice, unless such Change of
Control Purchase Notice has first been validly withdrawn as specified in the
following paragraph.
Any Change of Control Purchase Notice may be withdrawn by the Holder
by a written notice of withdrawal delivered to the Trustee or to any other
office or agency maintained for such purpose on or prior to the close of
business on the Expiration Date. Such notice of withdrawal shall state:
(i) the principal amount of Exchange Debentures and the certificate
numbers of the Exchange Debentures as to which the withdrawal notice
relates; and
<PAGE>
17
(ii) the principal amount of Exchange Debentures, if any, which
remains subject to the original Change of Control Purchase Notice.
There shall be no purchase of any Exchange Debentures pursuant to this
Section 2.6 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Exchange Debentures, of the required Change
of Control Purchase Notice) and is continuing an Event of Default (other than a
default in the payment of the Change of Control Purchase Price with respect to
such Exchange Debentures).
(e) Prior to the Change of Control Purchase Date but in no event more
than ten days prior to such date, the Company shall deposit with the Trustee
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as paying agent, shall segregate and hold in trust as provided in Section 1003
of the Indenture) an amount of cash in immediately available funds or
securities, if expressly permitted hereunder, sufficient to pay the aggregate
Change of Control Purchase Price of all the Exchange Debentures or portions
thereof which are to be purchased. Upon any such deposit, interest shall cease
to accrue on such Exchange Debentures (or portions thereof) on and after the
Change of Control Purchase Date, and the Holders thereof shall have no other
rights as such (other than the right to receive the Change of Control Purchase
Price, upon surrender of such Exchange Debentures).
(f) Payment of the Change of Control Purchase Price for an Exchange
Debenture for which a Change of Control Purchase Notice has been delivered and
not withdrawn is conditioned upon delivery of such Exchange Debenture (together
with necessary endorsements) to the Trustee or to any other office or agency
maintained for such purpose, at any time (whether prior to, on or after the
Change of Control Purchase Date) after delivery of such Change of Control
Purchase Notice. Payment of the Change of Control Purchase Price for such
Exchange Debenture will be made promptly following the later of the Change of
Control Purchase Date or the time of delivery of such Exchange Debenture.
(g) The Company shall comply with the tender offer rules under the
Exchange Act which may then be applicable and, if required, will file Schedule
13E-4 or any other schedule required thereunder in connection with any offer by
the Company to purchase Exchange Debentures at the option of Holders upon a
Change of Control.
(h) The Trustee shall return to the Company any cash, together with
interest or dividends, if any, thereon (subject to the provisions of Section 605
of the Indenture) held by it for the payment of the Change of Control Purchase
Price of the Exchange Debentures that remain unclaimed as provided in Section
1003 of the Indenture; provided, however, that to the extent that the aggregate
-------- -------
amount of cash deposited by the Company pursuant to Section 2.6(e) hereof
exceeds the aggregate Change of Control Purchase Price of the Exchange
Debentures or portions thereof to be purchased, then promptly after the Change
of Control Purchase Date, the Trustee shall return any such excess
<PAGE>
18
to the Company together with interest or dividends, if any, thereon (subject to
the provision of Section 605 of the Indenture).
(i) In connection with any redemption of Exchange Debentures, the
Company may arrange for the purchase and conversion of any such Exchange
Debentures by an agreement with one or more investment bankers or other
purchasers to purchase such Exchange Debentures by paying to the Holders of
Exchange Debentures, or to the Trustee in trust for such Holders, on or before
the close of business on the day prior to the Redemption Date, an amount, in
cash, not less than the redemption price payable by the Company on redemption of
such Exchange Debentures, together with the amount of accrued and unpaid
interest thereon to the date fixed for redemption. Notwithstanding anything to
the contrary contained herein, the obligation of the Company to pay the
redemption price of such Exchange Debentures, together with the amount of
accrued and unpaid interest thereon to the Redemption Date, shall be satisfied
and discharged to the extent such amount is so paid by such purchasers.
Pursuant to such an agreement, any such Exchange Debentures tendered by the
Holder for redemption or not duly surrendered for conversion by such Holder
shall be deemed acquired by such purchasers from such Holder and
(notwithstanding anything to the contrary contained in Section 2.4 hereof)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the day prior to the Redemption Date, subject to
payment of the above as aforesaid.
The Trustee shall be under no obligation to ascertain the occurrence
of a Change of Control or to give notice with respect thereto. The Trustee may
conclusively assume, in the absence of written notice to the contrary from the
Company, that no Change of Control has occurred.
SECTION 2.7. Place of Payment.
----------------
The Place of Payment where the Exchange Debentures may be presented or
surrendered for payment, where the Exchange Debentures may be surrendered for
registration of transfer or exchange and where notices and demands to and upon
the Company in respect of the Exchange Debentures and the Indenture may be
served shall be in the Borough of Manhattan, The City of New York, New York, and
the office or agency maintained by the Company for such purpose shall initially
be c/o The Bank of New York, 101 Barclay Street, 21st Floor, New York, New York
10286.
SECTION 2.8. Method of Payment.
-----------------
Payment of the principal of and interest on this Exchange Debenture
will be made at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York (which shall initially be an
office or agency of the Trustee), in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option
-------- -------
<PAGE>
19
of the Company, payments of principal and interest on the Exchange Debentures
(other than payments of principal and interest due at maturity) may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the register of Holders of the Exchange Debentures.
SECTION 2.9. Denomination.
------------
The Exchange Debentures will be issued in denominations of $1,000 and
integral multiples thereof.
SECTION 2.10. Currency.
--------
Principal and interest on the Exchange Debentures shall be payable in
Dollars.
SECTION 2.11. Registered Securities.
---------------------
The Exchange Debentures shall be issuable and transferable in fully
registered form as Registered Securities, without coupons.
SECTION 2.12. Sinking Fund.
------------
The Exchange Debentures shall not be entitled to the benefits of a
sinking fund.
SECTION 2.13. Inapplicability of Certain Covenants.
------------------------------------
Sections 1007, 1008, 1009, 1010 and 1011 shall not be applicable to
the Exchange Debentures.
SECTION 2.14. Registrar and Paying Agent.
--------------------------
The Trustee shall initially serve as Registrar and Paying Agent for
the Exchange Debentures.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of Indenture.
-------------------------
Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.
<PAGE>
20
SECTION 3.2 Supplemental Indenture.
----------------------
Notwithstanding any provision to the contrary in Section 902 of the
Indenture, no supplemental indenture entered into by the Company and the Trustee
in accordance with Article Nine of the Indenture shall, without the consent of
the Holder of each Outstanding Exchange Debenture affected thereby, adversely
affect any of such Holder's rights under Section 2.6 hereof after the mailing of
the notice contemplated by Section 2.6(b).
It shall not be necessary for any Act of Holders under this Section
3.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 3.3. Governing Law.
-------------
This Supplemental Indenture and each Exchange Debenture shall be
governed by and construed in accordance with the laws of the State of New York.
This Supplemental Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended and, to the extent applicable, shall be governed by such
provisions.
SECTION 3.4. Counterparts.
------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 3.5. Applicability of Indenture.
--------------------------
The provisions of the Indenture shall not be binding upon the Company
at any time unless at such time there are Securities outstanding.
<PAGE>
21
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first written above.
CABLEVISION SYSTEMS CORPORATION
By:
----------------------------------
Name:
Title:
[Corporate Seal]
Attest:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
Trustee
By:
-------------------------------------
Name:
Title:
[Corporate Seal]
Attest:
------------------------
Name:
Title:
<PAGE>
22
STATE OF )
) ss.:
COUNTY OF )
On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did depose and say that s/he resides
at ; that s/he is of
CABLEVISION SYSTEMS CORPORATION, one of the corporations described in and which
executed the above instrument; that s/he knows the corporate seal of such
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to authority of the Board of Directors of such
corporation; and that s/he signed her/his name thereto pursuant to like
authority.
(NOTARIAL SEAL)
<PAGE>
23
STATE OF )
) ss.:
COUNTY OF )
On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did depose and say that s/he resides
at ; that s/he is of THE
BANK OF NEW YORK, one of the corporations described in and which executed the
above instrument; that s/he knows the corporate seal of such corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors of such corporation; and
that s/he signed her/his name thereto pursuant to like authority.
(NOTARIAL SEAL)
<PAGE>
EXHIBIT 99.7
November 7, 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 (i) 1,200,000 shares of 8 1/2% Series I Cumulative Convertible
Exchangeable Preferred Stock (the "Preferred Stock") of Cablevision Systems
Corporation, a Delaware corporation (the "Company"), (ii) 12,000,000 of the
Company's depositary shares (the "Depositary Shares") evidenced by depositary
receipts (the "Depositary Receipts") to be issued against deposit of the
Preferred Stock pursuant to the Deposit Agreement, dated as of November 7, 1995
(the "Deposit Agreement"), among the Company, Harris Trust and Savings Bank, as
Depositary (the "Depositary"), and the holders from time to time of Depositary
Receipts issued thereunder, each such Depositary Share representing a one-tenth
interest in a share of the Preferred Stock, and (iii) the shares of Class A
Common
<PAGE>
Cablevision Systems Corporation -2-
Stock, par value $.01 per share, of the Company initially issuable upon
conversion of the Depositary Shares (the "Class A Common Stock"), as the case
may be, we, as your counsel, have examined such corporate records, certificates
and other 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) The Preferred Stock has been duly authorized, and, upon payment
therefor and delivery to the Underwriters thereof pursuant to the
Underwriting Agreement, dated November 1, 1995, between the Company and
Bear Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Morgan Stanley & Co. Incorporated (the "Underwriters") will be validly
issued, fully paid and nonassessable.
(2) The Preferred Stock will be convertible into Class A Common Stock
of the Company in accordance with the Company's Certificate of
Incorporation, and the shares of Class A Common Stock initially issuable
upon conversion of the Preferred Stock have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable.
<PAGE>
Cablevision Systems Corporation -3-
(3) Assuming that the Deposit Agreement has been duly authorized,
executed and delivered by the Depositary, upon due execution and delivery
of the Depositary Receipts by the Depositary against the deposit by the
Company of the Preferred Stock pursuant to the Deposit Agreement and as
contemplated in the Registration Statement, the Depositary Shares will be
validly issued.
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 nor with respect to any Federal or state laws relating
to communications or individuals, companies or businesses engaged in the
communications business, including the provision of cable television services.
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
Company's Current Report on Form 8-K, and to the reference to us under the
headings "Validity of Depositary Shares and Class A Common Stock" in the
<PAGE>
Cablevision Systems Corporation -4-
Prospectus Supplement, dated November 1, 1995, relating to the Securities and
"Validity of the Securities" in the Prospectus, dated October 18, 1995, included
in Registration Statement No. 33-62313. 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,
/s/ SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 99.8
November 7, 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 $300,000,000 principal amount of 9 1/4% Senior Subordinated Notes due
2005 (the "Securities") of Cablevision Systems Corporation, a Delaware
corporation (the "Company"), we, as your counsel, have examined such corporate
records, certificates and other 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,
upon (a) the due execution and authentication of the Securities in accordance
with the Indenture between the Company and The Bank of New York, as Trustee,
dated as of November 1, 1995, and (b) payment therefor and delivery to the
Underwriters thereof pursuant to the Purchase Agreement, dated November 2, 1995,
between
<PAGE>
Cablevision Systems Corporation -2-
the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear Stearns
& Co. Inc., Morgan Stanley & Co. Incorporated and Toronto Dominion (USA) Inc.
(the "Underwriters"), the Securities 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.
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 nor with respect to any Federal or state laws relating to
communications or individuals, companies or businesses engaged in the
communications business, including the provision of cable television services.
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, and we have assumed that the Indenture has been duly authorized,
executed and delivered by the Trustee
<PAGE>
Cablevision Systems Corporation -3-
thereunder, an assumption which we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Current Report on Form 8-K, and to the reference to us under the
headings "Validity of Notes" in the Prospectus Supplement, dated November 2,
1995, relating to the Securities and "Validity of the Securities" in the
Prospectus, dated October 18, 1995, included in the Registration Statement No.
33-62313. 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,
/s/ SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 99.9
November 7, 1995
Cablevision Systems Corporation,
One Media Crossways,
Woodbury, New York 11797.
Ladies and Gentlemen:
We have acted as counsel in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of (i) 1,200,000
shares of 8 1/2% Series I Cumulative Convertible Exchangeable Preferred Stock
(the "Preferred Stock") of Cablevision Systems Corporation, a Delaware
corporation (the "Company"); (ii) 12,000,000 of the Company's depositary
shares (the "Depositary Shares") evidenced by depositary receipts (the
"Depositary Receipts") to be issued against deposit of the Preferred Stock
pursuant to the Deposit Agreement, dated as of November 7, 1995, among the
Company, Harris Trust and Savings Bank, as Depositary (the "Depositary") and the
holders from time to time of Depositary Receipts issued thereunder, each such
Depositary Share representing a one-tenth interest in a
<PAGE>
Cablevision Systems Corporation -2-
share of the Preferred Stock, and (iii) the shares of Class A Common Stock, par
value $.01 per share, of the Company initially issuable upon conversion of the
Depositary Shares (the "Class A Common Stock"), as the case may be. We hereby
confirm to you our opinion as set forth under the heading "Certain Federal
Income Tax Considerations" in the Prospectus Supplement dated November 1, 1995
(the "Prospectus Supplement") to the Prospectus dated October 18, 1995, relating
to the Depositary Shares.
We hereby consent to the filing with the Securities and Exchange Commission
of this letter as an exhibit to the Company's Current Report on Form 8-K and to
the reference to us under the heading "Certain Federal Income Tax
Considerations" in the Prospectus Supplement. In giving such consents, we do
not admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
/S/ SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 99.10
CABLEVISION SYSTEMS CORPORATION
9 1/4% Senior Subordinated Notes CUSIP NO.
due 2005 12686CAH2
No. $
-------- --------
Cablevision Systems Corporation, a Delaware corporation (herein called
the "Company", which term includes any successor entity under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co. or registered assigns the principal sum of DOLLARS on
November 1, 2005, at the office or agency of the Company referred to below, and
to pay interest thereon on May 1, 1996 and semiannually thereafter, on November
1 and May 1 in each year, from November 7, 1995 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 9 1/4% per annum, until the principal hereof is paid or duly provided for,
and (to the extent lawful) to pay on demand interest on any overdue interest at
the rate borne by the Securities from the date of the Interest Payment Date on
which such overdue interest becomes payable to the date payment of such interest
has been made or duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the April 15 or October 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and interest on such defaulted interest at the interest rate borne
by the Securities, to the extent lawful, shall forthwith cease to be payable to
the Holder on such Regular Record Date, and may be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal of (and premium, if any)
and interest on this Security will be made at the office or agency of the
Company maintained for that purpose in The City of New York, or at such other
office or agency of the Company as may be maintained for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Security Register.
<PAGE>
2
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
<PAGE>
3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CABLEVISION SYSTEMS CORPORATION
By:
---------------------------------------------
Attest:
- -------------------------
Authorized Signatory
<PAGE>
4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By
------------------------------
Authorized Signatory
Dated: ___________________
<PAGE>
5
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company designated as its 9 1/4% Senior Subordinated Notes due 2005 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $300,000,000, which may be
issued in one or more series under an indenture (herein called the "Indenture")
dated as of November 1, 1995, between the Company and The Bank of New York,
trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture with respect to the series of which this Security is a
part), to which Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company, the Trustee, the
holders of the Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
The Securities are subject to redemption upon not less than 30 nor
more than 60 days' notice by first-class mail, at any time on or after November
1, 2000, as a whole or in part, at the election of the Company, at a Redemption
Price equal to the percentage of the principal amount set forth below if
redeemed during the 12-month period beginning November 1 of the years indicated:
Year Redemption Price
---- ----------------
2000 104.625%
2001 103.100
2002 101.500
and thereafter at 100% of the principal amount, together in the case of any such
redemption with accrued interest, if any, to the Redemption Date, all as
provided in the Indenture.
In the case of any redemption of Securities, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
<PAGE>
6
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of each series affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities of such
series at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all the Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Security.
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full of all
Senior Indebtedness of the Company whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Each
Securityholder by his acceptance hereof 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.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
<PAGE>
7
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form, without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to pay all documentary, stamp or similar issue or transfer taxes
or other governmental charges payable in connection with any registration of
transfer or exchange.
Prior to the time of due presentment of this 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 this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on the face
of this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - . . . . Custodian . . . .
(Cust.) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
Act............................
(State)
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
<PAGE>
8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Signature:
------------ ---------------------------------------------------
(sign exactly as name appears on the other
side of this Security)
Signature guaranteed by: ______________________________
