<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1997
REGISTRATION NO. 333-38013
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CABLEVISION SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 11-2776686
(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
</TABLE>
ONE MEDIA CROSSWAYS
WOODBURY, NEW YORK 11797
(516) 364-8450
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------
ROBERT S. LEMLE
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ONE MEDIA CROSSWAYS
WOODBURY, NEW YORK 11797
(516) 364-8450
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
John P. Mead
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------------------
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the Securities registered on this Form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 30, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
OFFER TO EXCHANGE
all outstanding
8 1/8% Senior Debentures
due 2009
($400,000,000 principal amount outstanding)
for
8 1/8% Series B Senior Debentures
due 2009
of
CABLEVISION SYSTEMS CORPORATION
---------------
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON DECEMBER 4, 1997, UNLESS EXTENDED
------------------------
Cablevision Systems Corporation, a Delaware corporation ("Cablevision" and,
collectively with its subsidiaries unless the context otherwise requires, the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying letter of transmittal (the "Letter
of Transmittal," and, together with this Prospectus, the "Exchange Offer"), to
exchange $1,000 principal amount of its 8 1/8% Series B Senior Debentures due
2009 (the "New Debentures"), which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement
(as defined herein) of which this Prospectus constitutes a part, for each $1,000
principal amount of the outstanding 8 1/8% Senior Debentures due 2009 (the "Old
Debentures") of the Company, of which $400,000,000 principal amount is
outstanding. The New Debentures and the Old Debentures are collectively referred
to herein as the "Debentures."
The Company will accept for exchange any and all Old Debentures that are
validly tendered on or prior to 5:00 p.m., New York City time, on the date the
Exchange Offer expires, which will be December 4, 1997, unless the Exchange
Offer is extended (the "Expiration Date"). Tenders of Old Debentures may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date, unless previously accepted for payment. The
Exchange Offer is not conditioned upon any minimum principal amount of Old
Debentures being tendered for exchange. However, the Exchange Offer is subject
to certain conditions which may be waived by the Company and to the terms and
provisions of the Registration Rights Agreement (as defined herein). See "The
Exchange Offer." Old Debentures may be tendered only in denominations of $1,000
and integral multiples thereof.
The New Debentures will be obligations of the Company entitled to the
benefits of the Indenture (as defined herein). The form and terms of the New
Debentures are the same in all material respects as the form and terms of the
Old Debentures, except that the New Debentures have been registered under the
Securities Act and will not contain terms restricting the transfer thereof.
Following the completion of the Exchange Offer, none of the Debentures will be
entitled to the benefits of the Registration Rights Agreement relating to
contingent increases in the interest rate provided for pursuant thereto. See
"The Exchange Offer."
The New Debentures will bear interest from August 26, 1997. Holders of Old
Debentures whose Old Debentures are accepted for exchange will be deemed to have
waived the right to receive any payment in respect of interest on the Old
Debentures accrued from August 26, 1997 to the date of the issuance of the New
Debentures. Interest on the New Debentures is payable semi-annually on February
15 and August 15 of each year, commencing February 15, 1998, accruing from
August 26, 1997 at a rate of 8 1/8% per annum.
(CONTINUED ON NEXT PAGE)
------------------------
INVESTMENT IN THE DEBENTURES INVOLVES SIGNIFICANT RISKS DISCUSSED UNDER "RISK
FACTORS" ON PAGE 16 WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is November 3, 1997.
<PAGE>
(COVER PAGE CONTINUED)
The Old Debentures are, and the New Debentures will be, senior unsecured
obligations of Cablevision and will rank PARI PASSU in right of payment with all
existing and future unsubordinated indebtedness of Cablevision. As of June 30,
1997, after giving effect to the transactions described in the introductory
paragraph to the table entitled "Capitalization" and the application of the net
proceeds from the sale of the Old Debentures, (i) Cablevision would have had
approximately $1,888.3 million of debt outstanding (other than the Debentures
and other than certain limited recourse guarantees of subsidiary debt),
virtually all of which would have been unsecured, (ii) Restricted Group (as
defined herein) subsidiaries of Cablevision would have had approximately
$1,502.6 million of third-party debt (including guarantees of borrowings under
the Credit Agreement (as defined herein) of $840.0 million), and (iii)
Unrestricted Group (as defined herein) subsidiaries of Cablevision would have
had approximately $2,134.4 million of debt. See "Risk Factors--Ranking of
Debentures" and "Capitalization" for additional information concerning
indebtedness of Cablevision and its subsidiaries.
Old Debentures initially sold to Qualified Institutional Buyers (as defined
in Rule 144A under the Securities Act) and pursuant to Regulation S under the
Securities Act were represented by global Debenture certificates in definitive
fully registered form without coupons, registered in the name of a nominee of
The Depository Trust Company ("DTC"), as depositary. The New Debentures
exchanged for Old Debentures represented by the global Debenture certificates
will be represented by global Debenture certificates in definitive fully
registered form without coupons, registered in the name of the nominee of DTC,
as depositary, unless the beneficial holders thereof request otherwise. The
global Debenture certificates will be exchangeable, upon ten days' prior written
notice, for New Debentures in definitive fully registered form without coupons,
in denominations of $1,000 and integral multiples thereof. See "Description of
New Debentures--Book-Entry Delivery and Form."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
the New Debentures issued pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than any such
holder that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such New
Debentures are acquired in the ordinary course of such holders' business and
such holders have no arrangements with any person to participate in the
distribution of such New Debentures. Each broker-dealer that receives New
Debentures for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Debentures. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Debentures received in exchange
for Old Debentures where such Old Debentures were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Company
has agreed that, for a period of 90 days after the Expiration Date, it will make
this Prospectus and any amendment or supplement to this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
The Company will not receive any proceeds from this offering, and no
underwriter is being utilized in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD DEBENTURES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
2
<PAGE>
The New Debentures are a new issue of securities for which there is
currently no trading market. If the New Debentures are traded after their
initial issuance, they may trade at a discount from their principal amount,
depending upon prevailing interest rates, the market for similar securities and
other factors, including general economic conditions and the financial condition
and performance of, and prospects for, the Company. Bear, Stearns & Co. Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated have advised the Company that they currently intend to make a
market in the Old Debentures and the New Debentures. However, they are not
obligated to do so, and any market making activity with respect to the Old
Debentures and the New Debentures may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Old Debentures and the New Debentures. The
Company does not intend to apply for listing of the New Debentures on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
Available Information................................................................. 4
<S> <C>
Incorporation of Certain Documents by Reference....................................... 4
Summary............................................................................... 6
Risk Factors.......................................................................... 16
Use of Proceeds....................................................................... 20
The Exchange Offer.................................................................... 20
Capitalization........................................................................ 27
Description of New Debentures......................................................... 29
Certain Federal Income Tax Consequences............................................... 41
Plan of Distribution.................................................................. 44
Validity of New Debentures............................................................ 44
Experts............................................................................... 44
</TABLE>
3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices: Seven World Trade Center,
Suite 1300, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and are also available on the
Commission's worldwide web site at http://www.sec.gov. Copies of such material
can be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information also may be inspected at the
offices of the American Stock Exchange, 86 Trinity Place, New York, New York
10006.
This Prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto and reference is
hereby made to the Registration Statement and the exhibits and schedules thereto
for further information with respect to the Company and the securities offered
hereby. Statements contained herein concerning the provisions of any documents
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission are not necessarily complete, and in each instance reference is made
to the copy of such document so filed. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents or information filed with the Commission:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by the Company's Form 10-K/A for the fiscal
year ended December 31, 1996 (collectively, the "Form 10-K");
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1997 and June 30, 1997 (the "Form 10-Qs");
(c) the Company's Current Reports on Form 8-K filed February 18, 1997,
March 12, 1997, April 18, 1997, June 10, 1997, July 10, 1997, August 30,
1997 and September 9, 1997 (the "Form 8-Ks"); and
(d) all documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act on or after the date of this Prospectus and
prior to the termination of the offering made hereby.
Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a subsequent statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of any such person, a copy of any or all of the information incorporated
herein by reference other than exhibits to such information (unless such
exhibits are specifically incorporated by reference into such information). The
Company's principal executive
4
<PAGE>
offices are located at One Media Crossways, Woodbury, New York 11797, and its
telephone number is (516) 364-8450. Requests for such copies should be directed
to the Secretary of the Company at its executive offices.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE EXCHANGE AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH TOGETHER, NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH
TOGETHER, CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
The term "Consolidated Financial Statements" refers to the Company's
Consolidated Financial Statements and the Notes thereto incorporated by
reference from the Form 10-K and the term "Management's Discussion and Analysis"
refers to the Management's Discussion and Analysis of Financial Condition and
Results of Operations incorporated by reference from the Form 10-K or the Form
10-Qs, as applicable.
------------------------
This Prospectus contains or incorporates by reference statements that
constitute forward looking information within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that such
forward looking statements are not guarantees of future performance or results
and involve risks and uncertainties and that actual results or developments may
differ materially from the forward looking statements as a result of various
factors. Factors that may cause such differences to occur include but are not
limited to (i) the level of growth in the Company's revenues, (ii) subscriber
demand, competition, the cost of programming and industry conditions, (iii)
whether expenses of the Company continue to increase or increase at a rate
faster than expected, (iv) whether any unconsummated transactions are
consummated on the terms and at the times set forth (if at all), (v) new
competitors entering the Company's franchise areas and (vi) other risks and
uncertainties inherent in the cable television business. See "Risk Factors."
5
<PAGE>
SUMMARY
THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION APPEARING
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN. INVESTMENT IN
THE SECURITIES OFFERED HEREBY INVOLVES SIGNIFICANT RISKS. SEE "RISK FACTORS."
THE COMPANY
The Company is one of the largest operators of cable television systems in
the United States, with approximately 2,889,000 subscribers in 19 states as of
June 30, 1997, based on the number of basic subscribers in systems which are
currently majority-owned and managed by the Company (after giving effect to the
closing of the A-R Cable Transaction, as defined under "Capitalization" herein
and described in the Company's Form 10-Q for the quarter ended June 30, 1997).
The Company also has ownership interests in companies that produce and
distribute national and regional programming services and provide advertising
sales services for the cable television industry and in Madison Square Garden,
L.P. ("MSG"), a sports entertainment company.
CABLE TELEVISION
The cable television systems that are currently majority-owned and managed
by the Company (the "Company's cable television systems") served approximately
2,889,000 subscribers in 19 states as of June 30, 1997 (after giving effect to
the closing of the A-R Cable Transaction, as described in the Company's Form
10-Q for the quarter ended June 30, 1997). The Company's cable television
systems have generally been characterized by relatively high revenues per
subscriber ($38.19 for June 1997) and a high ratio of premium service units to
basic subscribers (1.4:1 for June 1997). In calculating revenue per subscriber,
the Company includes only recurring service revenues and excludes installation
charges and certain other revenues such as advertising, pay-per-view and home
shopping revenues.
The cable television operations in the Company's restricted group of
subsidiaries (the "Restricted Group") served approximately 1,937,000 subscribers
as of June 30, 1997, primarily in and around metropolitan New York City
(including in the boroughs of Brooklyn and The Bronx, on Long Island, in
Fairfield County, Connecticut, in New Jersey and in Westchester County, New
York) and in and around Boston, Massachusetts. The revenue per subscriber and
ratio of premium service units to basic subscribers for cable television systems
in the Restricted Group for June 1997 were $41.51 and 1.6:1, respectively.
The cable television operations currently in the Company's unrestricted
group of subsidiaries ("Unrestricted Cable") served approximately 952,000
subscribers as of June 30, 1997 in Ohio and 15 other states. The revenue per
subscriber and ratio of premium service units to basic subscribers for
Unrestricted Cable for June 1997 were $31.47 and 1.1:1, respectively.
PROGRAMMING AND ENTERTAINMENT SERVICES
The Company conducts its programming and entertainment activities through
Rainbow Media Holdings, Inc. ("Rainbow Media"), its 75% owned subsidiary and a
member of the Unrestricted Group, and through subsidiaries of Rainbow Media in
partnership with certain unaffiliated entities, including Liberty Media
Corporation. The remaining 25% interest in Rainbow Media is owned by NBC Cable
Holdings, Inc., a subsidiary of National Broadcasting Company, Inc. ("NBC").
Rainbow Media's businesses include MSG, seven regional SportsChannel networks,
five national entertainment networks (American Movie Classics ("AMC"), Bravo,
MuchMusic, Romance Classics and the Independent Film Channel ("IFC")), Rainbow
News 12 (regional news networks serving suburban areas surrounding New York
City) and the sports network of Prime SportsChannel Networks ("Prime Network").
MSG is a sports entertainment company that owns and operates the Madison Square
Garden arena and the adjoining Theater at MSG, the New York Knickerbockers
professional basketball team, the New York Rangers
6
<PAGE>
professional hockey team, the Madison Square Garden Network and SportsChannel
Associates ("SportsChannel New York"). MSG and Rainbow Media's SportsChannel
networks provide regional sports programming to the New York, New England,
Chicago, Cincinnati, Cleveland, San Francisco and Florida areas. AMC is a
national entertainment network featuring classic, unedited and non-colorized
films from the 1930s through the 1970s. Bravo is a national entertainment
network offering international films and performing arts programs, including
jazz, dance, classical music, opera and theatrical programs. Romance Classics is
a national entertainment network featuring classic, unedited and non-colorized
films with romantic themes from the 1930s through the 1970s. MuchMusic is a
music network featuring a diverse mix of new and established musical artists.
IFC is a national entertainment network that airs independent films made outside
the traditional Hollywood system. See "Business--Programming
Operations--General" in the Form 10-K.
ADVERTISING SERVICES
Rainbow Advertising sells advertising time to national, regional and local
advertisers on behalf of the Company's cable television systems and the
SportsChannel and Rainbow News 12 programming networks, as well as on behalf of
unaffiliated cable television systems. Under the agreement with Fox Sports Net,
LLC ("Fox Sports") described in the Company's Form 8-K filed July 10, 1997,
Rainbow Media would contribute the national advertising assets of Rainbow
Advertising relating to its SportsChannel programming networks to a new 50/50
partnership with Fox Sports to be named National Advertising Partners.
7
<PAGE>
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $400,000,000 aggregate
principal amount of Old Debentures for up to an equal aggregate principal amount
of New Debentures. The New Debentures will be obligations of the Company
entitled to the benefits of the Indenture. The form and terms of the New
Debentures are the same in all material respects as the form and terms of the
Old Debentures, except that the New Debentures have been registered under the
Securities Act and will not contain terms restricting the transfer thereof (and
hence are not entitled to the benefits of the Registration Rights Agreement
relating to the contingent increases in the interest rate provided for pursuant
thereto). The Old Debentures and the New Debentures are herein collectively
referred to as the "Debentures." See "Description of New Debentures."
<TABLE>
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THE EXCHANGE OFFER........... $1,000 principal amount of New Debentures will be issued in
exchange for each $1,000 principal amount of Old
Debentures validly tendered pursuant to the Exchange
Offer. As of the date hereof, $400,000,000 in aggregate
principal amount of Old Debentures are outstanding. The
Company will issue the New Debentures to tendering holders
of Old Debentures promptly after the Expiration Date.
RESALE....................... The Company believes that the New Debentures issued pursuant
to the Exchange Offer generally will be freely transferable
by the holders thereof without registration or any
prospectus delivery requirement under the Securities Act,
except that a "dealer" or any "affiliate" of the Company,
as such terms are defined under the Securities Act, that
exchanges Old Debentures held for its own account (a
"Restricted Holder") may be required to deliver copies of
this Prospectus in connection with any resale of the New
Debentures issued in exchange for such Old Debentures. See
"The Exchange Offer--General" and "Plan of Distribution."
EXPIRATION DATE.............. 5:00 p.m., New York City time, on December 4, 1997, unless
the Exchange Offer is extended, in which case the term
"Expiration Date" means the latest date and time to which
the Exchange Offer is extended. See "The Exchange
Offer--Expiration Date; Extensions; Amendments."
ACCRUED INTEREST ON THE NEW
DEBENTURES AND THE OLD
DEBENTURES................. The New Debentures will bear interest from August 26, 1997.
Holders of Old Debentures whose Old Debentures are accepted
for exchange will be deemed to have waived the right to
receive any payment in respect of interest on such Old
Debentures accrued from August 26, 1997 to the date of the
issuance of the New Debentures. Consequently, holders who
exchange their Old Debentures for New Debentures will
receive the same interest payment on February 15, 1998
(the first interest payment date with respect to the Old
Debentures and the New Debentures) that they would have
received had they not accepted the Exchange Offer. See
"The Exchange Offer--Interest on the New Debentures."
</TABLE>
8
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<TABLE>
<S> <C>
TERMINATION OF THE EXCHANGE
OFFER...................... The Company may terminate the Exchange Offer if it
determines that its ability to proceed with the Exchange
Offer could be materially impaired due to any legal or
governmental action, any new law, statute, rule or
regulation or any interpretation of the staff of the
Commission of any existing law, statute, rule or
regulation or if the Company deems it advisable to
terminate the Exchange Offer. Holders of Old Debentures
will have certain rights against the Company under the
Registration Rights Agreement should the Company fail to
consummate the Exchange Offer. See "The Exchange
Offer--Termination."
No federal or state regulatory requirements must be complied
with or approvals obtained in connection with the Exchange
Offer, other than applicable requirements under federal
and state securities laws.
PROCEDURES FOR TENDERING OLD
DEBENTURES................. Each holder of Old Debentures wishing to accept the Exchange
Offer must complete, sign and date the accompanying Letter
of Transmittal, or a facsimile thereof, in accordance with
the instructions contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or such
facsimile, together with the Old Debentures to be
exchanged and any other required documentation to The Bank
of New York, as Exchange Agent, at the address set forth
herein and therein or effect a tender of Old Debentures
pursuant to the procedures for book-entry transfer as
provided for herein. See "The Exchange Offer--Procedures
for Tendering."
SPECIAL PROCEDURES FOR
BENEFICIAL HOLDERS......... Any beneficial holder whose Old Debentures are registered in
the name of his broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender in the
Exchange Offer should contact such registered holder
promptly and instruct such registered holder to tender on
his behalf. If such beneficial holder wishes to tender on
his own behalf, such beneficial holder must, prior to
completing and executing the Letter of Transmittal and
delivering his Old Debentures, either make appropriate
arrangements to register ownership of the Old Debentures
in such holder's name or obtain a properly completed bond
power from the registered holder. The transfer of record
ownership may take considerable time. See "The Exchange
Offer--Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES................. Holders of Old Debentures who wish to tender their Old
Debentures and whose Old Debentures are not immediately
available or who cannot deliver their Old Debentures (or
who cannot complete the procedure for book-entry transfer
on a timely basis) and a properly completed Letter of
Transmittal or any other documents required by the Letter
of Transmittal to the Exchange Agent prior to the
Expiration Date may tender their Old Debentures according
to the guaranteed delivery procedures set forth in "The
Exchange Offer-- Guaranteed Delivery Procedures."
</TABLE>
9
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<TABLE>
<S> <C>
WITHDRAWAL RIGHTS............ Tenders of Old Debentures may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the business day prior
to the Expiration Date, unless previously accepted for
exchange. See "The Exchange Offer--Withdrawal of Tenders."
ACCEPTANCE OF OLD DEBENTURES
AND DELIVERY OF NEW DEBEN-
TURES...................... Subject to certain conditions (as summarized above in
"Termination of the Exchange Offer" and described more fully
in "The Exchange Offer--Termination"), the Company will
accept for exchange any and all Old Debentures which are
properly tendered in the Exchange Offer prior to 5:00
p.m., New York City time, on the Expiration Date. The New
Debentures issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date. See "The
Exchange Offer--General."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............... The exchange pursuant to the Exchange Offer will generally
not be a taxable event for federal income tax purposes. See
"Certain Federal Income Tax Consequences."
EXCHANGE AGENT............... The Bank of New York, the Trustee under the Indenture, is
serving as exchange agent (the "Exchange Agent") in
connection with the Exchange Offer. See "The Exchange
Offer--Exchange Agent."
USE OF PROCEEDS.............. There will be no cash proceeds payable to the Company from
the issuance of the New Debentures pursuant to the Exchange
Offer. Net proceeds received by the Company from the sale
of the Old Debentures were initially applied to repay
borrowings under the Company's principal bank credit
agreement (the "Credit Agreement").
</TABLE>
SUMMARY DESCRIPTION OF NEW DEBENTURES
<TABLE>
<S> <C>
SECURITIES OFFERED........... $400,000,000 principal amount of 8 1/8% Series B Senior
Debentures due 2009 (the "New Debentures").
MATURITY DATE................ August 15, 2009.
INTEREST PAYMENT DATES....... February 15 and August 15, commencing February 15, 1998.
OPTIONAL REDEMPTION.......... The Debentures are not subject to redemption at the option
of the Company prior to maturity.
RANKING...................... The Old Debentures are, and the New Debentures will be,
senior unsecured obligations of Cablevision and will rank
PARI PASSU in right of payment with all existing and
future unsubordinated indebtedness of Cablevision. All
secured indebtedness of Cablevision will have a prior
claim with respect to the assets securing such indebted-
ness. The liabilities, including trade payables, of
Cablevision's subsidiaries will have a prior claim with
respect to the assets of those subsidiaries. In that
regard, certain of the subsidiaries in the Company's
Restricted Group have guaranteed the indebtedness of
Cablevision under the Credit Agreement, but these
subsidiaries are not guarantors of the Old Debentures and
will not be guarantors of
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
the New Debentures. As of June 30, 1997, after giving
effect to the transactions described in the introductory
paragraph to the table entitled "Capitalization" and the
application of the net proceeds from the sale of the Old
Debentures, (i) Cablevision would have had $840.0 million
outstanding under the Credit Agreement, $1,048.2 million
of subordinated and senior subordinated indebtedness and
obligations and $115,000 of capitalized leases; (ii)
subsidiaries in the Restricted Group would have had $657.4
million of indebtedness and $5.2 million of capitalized
leases, in addition to the guarantees of Cablevision's
borrowings under the Credit Agreement; and (iii)
subsidiaries in the Company's unrestricted group of
subsidiaries (the "Unrestricted Group") would have had
$2,134.4 million of indebtedness and capitalized leases.
All of the indebtedness of subsidiaries in the Restricted
Group has been guaranteed by Cablevision ($151.0 million
on a senior subordinated basis and the balance on a senior
basis) and $1,070.6 million of the indebtedness of
subsidiaries in the Unrestricted Group has been guaranteed
by Cablevision on a limited recourse basis with the
guarantee limited to the stock of the relevant subsidiary,
which stock has been pledged to the lender to secure the
guarantee.
CERTAIN RESTRICTIONS......... The Indenture for the Debentures, among other things,
contains restrictions (with certain exceptions) on the
ability of the Company and its Restricted Subsidiaries (as
defined) to incur additional indebtedness, make certain
dividend payments or payments to redeem or retire capital
stock, invest in Unrestricted Subsidiaries or Affiliates
(each, as defined), engage in certain transactions with
Affiliates, incur liens and merge or consolidate with or
transfer all or substantially all of their assets to
another entity.
REGISTRATION RIGHTS.......... The Company is obligated to consummate the Exchange Offer or
to cause resales of the Old Debentures to be registered
under the Securities Act and, if one of such events does
not occur prior to April 26, 1998, then the annual
interest rate borne by the Old Debentures will be
increased to 8 3/8%. Thereafter, at the end of each 90-day
period during which such Exchange Offer is not con-
summated or a shelf registration statement is not declared
effective, the annual interest rate borne by the Old
Debentures shall be increased by an additional 0.25%. Upon
consummation of such Exchange Offer or the effectiveness
of such shelf registration statement, the interest rate
borne by the Old Debentures will revert to 8 1/8%. See
"Description of New Debentures--Registration Rights
Agreement."
</TABLE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY CERTAIN MATTERS RELATING TO
AN INVESTMENT IN THE NEW DEBENTURES. SEE "RISK FACTORS."
11
<PAGE>
SELECTED FINANCIAL DATA
The historical consolidated statement of operations data (except for book
value per common share and deficiency of earnings available to cover fixed
charges) and consolidated balance sheet data for each year ended and as of
December 31 in each year in the five-year period ended December 31, 1996,
included in the following selected financial data, have been derived from the
Consolidated Financial Statements of the Company, audited by KPMG Peat Marwick
LLP, independent public accountants. The historical consolidated statement of
operations data and balance sheet data for the periods ended and as of June 30,
1997 and 1996 included in the following selected financial data have been
derived from financial statements of the Company that have not been audited, but
that, in the opinion of the management of the Company, reflect all adjustments
necessary for the fair presentation of such data for the interim periods. The
results of operations for the six-month period ended June 30, 1997 are not
necessarily indicative of the results of operations for the full year, although
the Company expects to incur a substantial loss for the year ending December 31,
1997.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS
DATA(1):
Revenues.................................. $ 797,065 $ 624,496 $1,315,142 $1,078,060 $ 837,169 $ 666,724 $ 572,487
Operating expenses:
Technical............................... 340,430 257,580 538,272 412,479 302,885 241,877 204,449
Selling, general and administrative..... 214,619 146,439 313,476 266,209 195,942 172,687 120,356
Restructuring charge.................... -- -- -- -- 4,306(2) -- --
Depreciation and amortization........... 222,581 175,168 388,982 319,929 271,343 194,904 168,538
--------- --------- --------- --------- --------- --------- ---------
Operating profit.......................... 19,435 45,309 74,412 79,443 62,693 57,256 79,144
Other income (expense):
Interest expense, net................... (152,957) (129,859) (265,015) (311,887) (261,781) (230,327) (193,379)
Provision for preferential payment to
related party......................... (2,800) (2,800) (5,600) (5,600) (5,600) (5,600) (2,662)
Provision for loss on Olympics
venture............................... -- -- -- -- -- -- (50,000)(3)
Loss on sale of preferred stock......... -- -- -- -- -- -- (20,000)(4)
Write-off of deferred interest and
financing costs(5).................... -- (24,012) (37,784) (5,517) (9,884) (1,044) (12,284)
Loss on redemption of debentures........ -- -- -- -- (7,088 (5) -- --
Share of affiliates' net losses......... (31,481) (40,061) (82,028) (93,024) (82,864) (61,017) (47,278)
Gain (loss) on sale of programming and
affiliate interests, net.............. -- -- -- 35,989 -- (330) 7,053
Minority interest....................... 3,828 (4,810) (9,417) (8,637) (3,429) 3,000 --
Gain on sale of marketable securities,
net................................... -- -- -- -- -- -- 733
Settlement of litigation and related
matters............................... -- -- -- -- -- -- (5,655)
Miscellaneous, net...................... (3,991) (4,243) (6,647) (8,225) (7,198) (8,720) (6,175)
--------- --------- --------- --------- --------- --------- ---------
Net loss.................................. (167,966) (160,476) (332,079) (317,458) (315,151) (246,782) (250,503)
Dividend requirements applicable to
preferred stock......................... (72,731) (58,173) (127,780) (20,249) (6,385) (885) (885)
Net loss applicable to common
stockholders............................ $(240,697) $(218,649) $(459,859) $(337,707) $(321,536) $(247,667) $(251,388)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net loss per common share................. $ (9.69) $ (8.81) $ (18.52) $ (14.17) $ (13.72) $ (10.83) $ (11.17)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Average number of common shares
outstanding (in thousands).............. 24,842 24,819 24,827 23,826 23,444 22,859 22,512
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Book value per common share............... $ (105.20) $ (85.59) $ (95.59) $ (76.61) $ (76.93) $ (64.61) $ (55.28)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Deficiency of earnings available to cover
fixed charges........................... $(167,966) $(160,476) $(332,079) $(317,458) $(315,151) $(246,782) $(250,503)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
12
<PAGE>
<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
JUNE 30, ----------------------------------------------------------
1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT
AVERAGE MONTHLY REVENUE DATA)
CONSOLIDATED BALANCE SHEET DATA(1):
Total assets...................................... $4,648,324 $3,034,725 $2,502,305 $2,176,413 $1,327,418 $1,251,157
Total debt........................................ 4,572,291 3,334,701 3,157,107 3,169,236 2,235,499 2,004,452
Redeemable preferred stock........................ 1,062,884 1,005,265 257,751 -- -- --
Stockholders' deficiency.......................... (2,614,570) (2,374,285) (1,891,676) (1,818,535) (1,503,244) (1,250,248)
STATISTICAL DATA(1):
Homes passed(6)................................... 3,970,000 3,858,000 3,328,000 2,899,000 2,240,000 2,019,000
Basic service subscribers......................... 2,560,000 2,445,000 2,061,000 1,768,000 1,379,000 1,262,000
Basic penetration(7).............................. 64.5% 63.4% 61.9% 61.0% 61.6% 62.5%
Number of premium television units................ 3,803,000 3,862,000 3,990,000 3,208,000 3,003,000 2,802,000
Average number of premium units per basic
subscriber...................................... 1.5 1.6 1.9 1.8 2.2 2.2
Average monthly revenue per basic subscriber(8)... $ 39.18 $ 36.71 $ 37.07 $ 36.33 $ 36.59 $ 37.64
</TABLE>
- ------------------------
(1) The consolidated statement of operations, balance sheet and statistical data
reflect (i) the acquisition of Cablevision of New York City ("Cablevision of
NYC"), effective as of July 10, 1992, and (ii) various acquisitions of cable
television systems and other businesses during the periods presented. See
"Business--Cable Television Operations" in the Form 10-K. Acquisitions made
by the Company during the periods presented were accounted for under the
purchase method of accounting and, accordingly, the acquisition costs were
allocated to the net assets acquired based on their fair value, except for
the acquisition of partnership interests in Cablevision of NYC from Charles
F. Dolan and entities affiliated with him, which were recorded at Mr.
Dolan's and such entities' historical costs. Acquisitions are reflected in
the consolidated statement of operations, balance sheet and statistical data
from the time of acquisition.
(2) The Company recorded a one-time charge in the first quarter of 1994 to
provide for employee severance and related costs resulting from a
restructuring of its operations.
(3) In 1992, the Company recognized a $50 million loss in connection with
Rainbow Media's commitment in respect of its venture with NBC relating to
the 1992 Summer Olympics, which the Company paid in January 1993.
(4) In connection with the 1992 reorganization of V Cable, Inc. ("V Cable"), the
Company redeemed the redeemable preferred stock of A-R Cable Services, Inc.
("A-R Cable"), incurring a loss of $20 million.
(5) In connection with the 1992 reorganization of V Cable, the Company wrote off
approximately $7.5 million of deferred financing costs related to the debt
of V Cable, and a portion of the Company's deferred financing costs of
approximately $4.8 million in 1992 and $1.0 million in 1993, related to the
replacement of bank debt with subordinated debt, were written off. In
October 1994, the Company entered into a new bank credit agreement and
redeemed $200 million of its reset debentures. The related deferred
financing costs and unamortized discount relating to each were written off
(the portions relating to Cablevision of NYC and Cablevision of New Jersey
amounting to $3.2 million were written off in 1995) and charges of
approximately $2.0 million in redemption fees, $4.5 million in deferred
financing costs and $0.6 million in unamortized discount were recorded in
connection with the redemption of the reset debentures. In January 1995,
Rainbow Media amended its credit agreement to refinance its existing
borrowings and to provide funds for the acquisition of the third-party
interests in SportsChannel New York and Rainbow News 12, resulting in an
approximately $2.3 million write-off of deferred financing costs. In April
1996, the Company wrote off approximately $24.0 million of deferred interest
and financing costs in connection with the refinancing of all indebtedness
of V Cable and VC Holding, Inc. and the formation of Cablevision of Ohio. In
September 1996, the Company wrote off approximately $10.3 million of
deferred financing costs in connection with the refinancing of the Credit
Agreement, and in the fourth quarter of 1996, an additional $3.1 million of
deferred financing costs relating to the Company's MFR subsidiary were
written off in connection with a reorganization and refinancing of
Cablevision MFR, Inc.
(6) Homes passed is based upon homes passed by cable actually marketed and does
not include multiple dwelling units passed by the cable plant that are not
connected to it.
(7) Basic penetration represents basic service subscribers at the end of the
period as a percentage of homes passed at the end of the period.
(8) Based on recurring service revenues, excluding installation charges and
certain other revenues such as advertising, pay-per-view and home shopping
revenues, for the month of June or December, as the case may be, divided by
the average number of basic subscribers for that month.
13
<PAGE>
SUPPLEMENTAL FINANCIAL AND OPERATING DATA
The following tables set forth information concerning the Company's
Restricted Group and Unrestricted Cable on the dates and for the periods
indicated. Data for the 1997, 1996 and 1995 periods reflect the Restricted Group
and Unrestricted Cable as they were constituted on June 30, 1997. Pro forma data
for the periods ended and as of June 30, 1997 and December 31, 1996 have been
adjusted to give pro forma effect to the transactions described under "Condensed
Pro Forma Consolidated Financial Information" in the Company's Form 8-K filed on
August 30, 1997 and assumes that A-R Cable, A-R Cable Partners and Cablevision
of Framingham Holdings, Inc. ("CFHI") became part of Unrestricted Cable as of
the beginning of the respective periods. The data should be read in conjunction
with the Company's Consolidated Financial Statements and Management's Discussion
and Analysis.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------------------------------- -------------------------------------------------------
1997 1996 1996 1995 1994
----------------------------- ----------- ------------------------- ----------- -------------
PRO PRO
FINANCIAL DATA FORMA (1) ACTUAL FORMA (1) ACTUAL
- ------------------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESTRICTED GROUP:
STATEMENT OF
OPERATIONS DATA:
Revenues........... $ 517,607 $ 517,607 $ 452,704 $ 955,996 $ 938,252 $ 787,955 $ 584,567
Operating profit
before
depreciation and
amortization(2)... 210,893 210,893 189,501 398,728 392,240 344,062 249,316
Depreciation and
amortization..... 148,424 148,424 132,974 292,695 283,404 248,944 154,187
Operating profit... 62,469 62,469 56,527 106,033 108,836 95,118 95,129
Total interest
expense(3)....... 118,258 117,143 106,734 226,107 213,723 235,479 153,923
BALANCE SHEET DATA:
Total assets....... $2,330,598 $2,329,018 $2,229,534 $2,279,826 $2,278,246 $1,875,970 $ 1,119,882
Bank and senior
debt............. 1,560,266 1,172,154 606,001 1,436,290 984,554 1,133,231 969,895
Subordinated
debt(3).......... 1,199,172 1,474,172 1,464,305 1,199,105 1,464,373 1,064,876 764,802
Obligation to
related party.... 189,958 189,958 190,081 192,819 192,819 192,945 193,079
Total debt(3)...... 2,949,396 2,836,284 2,260,387 2,828,214 2,641,746 2,391,052 1,927,776
FINANCIAL RATIOS
AND OTHER DATA:
Operating profit
before
depreciation and
amortization to
revenues......... 40.7% 40.7% 41.9% 41.7% 41.8% 43.7% 42.6%
Total debt to
operating profit
before
depreciation and
amortization..... 7.0x(4) 6.7x(4) 6.0x(4) 7.1x 6.7x 6.9x 7.7x
Operating profit
before
depreciation and
amortization to
total interest
expense.......... 1.8x 1.8x 1.8x 1.8x 1.8x 1.5x 1.6x
Capital
expenditures..... $ 159,404 $ 159,404 $ 133,326 $ 341,974 $ 338,468 $ 251,210 $ 251,078
UNRESTRICTED CABLE:
STATEMENT OF
OPERATIONS DATA:
Revenues........... $ 184,026 $ 111,058 $ 62,329 $ 352,995 $ 158,382 $ 117,200 $ 169,826
Operating profit
before
depreciation and
amortization(2).... 68,578 39,248 23,643 135,360 59,420 48,354 84,932
Depreciation and
amortization..... 70,674 47,414 20,823 141,121 61,837 43,611 105,938
Operating profit
(loss)........... (2,096) (8,166) 2,820 (5,761) (2,417) 4,743 (21,006)
Total interest
expense.......... 40,532 19,924 13,750 86,257 31,737 59,125 103,803
BALANCE SHEET DATA:
Total assets....... $ 817,752 $ 620,153 $ 589,768 $ 908,881 $ 617,848 $ 256,206 $ 823,363
Total debt......... 910,837 512,470 291,400 932,048 471,881 528,021 1,092,440
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
14
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------------------------------- -------------------------------------------------------
1997 1996 1996 1995 1994
----------------------------- ----------- ------------------------- ----------- -------------
PRO PRO
FINANCIAL DATA FORMA (1) ACTUAL FORMA (1) ACTUAL
- ------------------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS
AND OTHER DATA:
Operating profit
before
depreciation and
amortization to
revenues......... 37.3% 35.3% 37.9% 38.3% 37.5% 41.3% 50.0%
Total debt to
operating profit
before
depreciation and
amortization..... 6.6x(4) 6.5x(4) 6.2x(4) 6.9x 7.9x 10.9x 9.9x(5)
Operating profit
before
depreciation and
amortization to
total interest
expense.......... 1.7x 2.0x 1.7x 1.6x 1.9x 0.8x 0.8x
Capital
expenditures..... $ 38,076 $ 30,202 $ 40,009 $ 113,433 $ 84,855 $ 27,013 $ 24,195
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30,
-----------------------------------
1997 1996 1996
------------------------ --------- ------------------------
STATISTICAL DATA PRO FORMA (1) ACTUAL PRO FORMA (1) ACTUAL
- ----------------------------------------------- ------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
RESTRICTED GROUP:
Homes passed(6)................................ 3,004,000 3,004,000 2,841,000 2,982,000 2,982,000
Basic service subscribers...................... 1,937,000 1,937,000 1,825,000 1,888,000 1,888,000
Basic penetration(7)........................... 64.5% 64.5% 64.2% 63.3% 63.3%
Number of premium television units............. 3,014,000 3,014,000 3,047,000 3,125,000 3,125,000
Average number of premium units per basic
subscriber................................... 1.6 1.6 1.7 1.7 1.7
Average revenue per basic subscriber(8)........ $41.51 $41.51 $38.66 $38.84 $38.84
UNRESTRICTED CABLE:
Homes passed(6)................................ 1,423,000 966,000 532,000 1,415,000 876,000
Basic service subscribers...................... 952,000 623,000 308,000 938,000 557,000
Basic penetration(7)........................... 66.9% 64.5% 57.9% 66.3% 63.6%
Number of premium television units............. 1,080,000 789,000 391,000 1,079,000 737,000
Average number of premium units per basic
subscriber................................... 1.1 1.3 1.3 1.2 1.3
Average revenue per basic subscriber(8)........ $31.47 $31.95 $31.81 $29.68 $29.54
</TABLE>
- ------------------------
(1) The information presented does not give pro forma effect to the Pending TCI
Transactions (as described in the Company's Form 8-K filed June 10, 1997) or
for the sale of certain cable television systems (as described in the Form
10-Q for the fiscal quarter ended March 31, 1997 and in the Form 8-K filed
September 9, 1997).
(2) Operating profit before depreciation and amortization is presented here to
provide additional information about the Company's ability to meet future
debt service, capital expenditures and working capital requirements.
Operating profit before depreciation and amortization should be considered
in addition to and not as a substitute for net income and cash flows as
indicators of financial performance and liquidity as reported in accordance
with generally accepted accounting principles.
(3) Includes Cablevision MFR, Inc. seller note in the amount of $141.3 million
that is, together with related interest expense, guaranteed by the
Restricted Group and, for pro forma amounts, also includes CFHI seller note
in the amount of $9.7 million.
(4) Operating profit before depreciation and amortization is annualized for
purposes of preparing interim financial ratios that include balance sheet
items.
(5) Cablevision MFR, Inc. was acquired in August 1994, and operating profit
before depreciation and amortization for 1994 for the period the Company
owned Cablevision MFR, Inc. is annualized for purposes of preparing
financial ratios.
(6) Homes passed is based upon homes passed by cable actually marketed and does
not include multiple dwelling units passed by the cable plant that are not
connected to it.
(7) Basic penetration represents basic service subscribers at the end of the
period as a percentage of homes passed at the end of the period.
(8) Based on recurring service revenues, excluding installation charges and
certain other revenues such as advertising, pay-per-view and home shopping
revenues, for the last month in the period presented, divided by the average
number of basic subscribers for that month.
15
<PAGE>
RISK FACTORS
Investment in the New Debentures involves various risks, including the
following principal factors, which, together with the other matters set forth
herein or incorporated by reference herein, should be carefully considered by
prospective investors.
SUBSTANTIAL INDEBTEDNESS AND HIGH DEGREE OF LEVERAGE. The Company has
incurred substantial indebtedness and issued substantial amounts of mandatorily
redeemable preferred stock, primarily to finance acquisitions and expansion of
its operations, to refinance outstanding indebtedness and, to a lesser extent,
for investments in and advances to affiliates. The Company's consolidated debt
plus the Company's 11 3/4% Series H Redeemable Exchangeable Preferred Stock and
11 1/8% Series M Redeemable Exchangeable Preferred Stock aggregated
approximately $5.6 billion at June 30, 1997. See Note 4 of Notes to the
Consolidated Financial Statements. As a result of the Company's high level of
indebtedness and the significant amount of redeemable preferred stock, the
Company has significant cash requirements to service indebtedness and to pay
dividends and redemption amounts on redeemable preferred stock, increasing the
Company's vulnerability to adverse developments in its business and adverse
economic and industry conditions.
NET LOSSES AND STOCKHOLDERS' DEFICIENCY. The Company reported net losses
applicable to common stockholders for the six months ended June 30, 1997 and
1996 of $240.7 million and $218.6 million, respectively, and for the years ended
December 31, 1996, 1995 and 1994 of $459.9 million, $337.7 million and $321.5
million, respectively. At June 30, 1997, the Company had a stockholders'
deficiency of $2.6 billion. The net losses primarily reflect high levels of
interest expense and depreciation and amortization charges relating to the
depreciation of assets obtained through, and debt incurred to finance,
acquisitions. Interest expense and depreciation and amortization charges
remained at a high level throughout 1994, 1995 and 1996 and will continue at
high levels throughout 1997 and future years as a result of previously
completed, pending and future acquisitions, expected capital expenditures and
additional investments in the Company's programming operations. The Company
expects to continue incurring substantial losses for at least the next several
years. See "Management's Discussion and Analysis--Liquidity and Capital
Resources."
POSSIBLE NONCOMPLETION OF CERTAIN TRANSACTIONS. There can be no assurances
that the Company's pending transactions referred to in the Company's Form 8-Ks
filed June 10, 1997, July 10, 1997 and September 9, 1997 and in the Company's
Form 10-Q for the fiscal quarter ended June 30, 1997 will be consummated in a
timely manner, as planned or at all.
POSSIBLE SEPARATION OF RAINBOW MEDIA FROM THE COMPANY. If the pending
transactions with Tele-Communications, Inc. ("TCI") described in the Company's
Form 8-K filed June 10, 1997 are consummated, Cablevision, the issuer of the
Debentures, will be a wholly-owned subsidiary of CSC Parent Corporation ("CSC
Parent"), the indirect subsidiaries of TCI contributed in such transactions (the
"TCI Contributed Entities") will be held as separate direct subsidiaries of CSC
Parent and Rainbow Media will continue to be a 75%-owned subsidiary of
Cablevision (with NBC owning the remaining 25% interest). The Contribution and
Merger Agreement with TCI permits the Company under certain circumstances to
restructure these holdings so that Rainbow Media becomes a separate subsidiary
of CSC Parent (and would no longer be a subsidiary of Cablevision) and the TCI
Contributed Entities become subsidiaries of Cablevision. Following such
transactions, the residual equity value of Rainbow Media would no longer support
the ability to pay interest and principal on the Debentures and other debt.
NEED FOR ADDITIONAL FINANCING. The Company's business requires substantial
investment on a continuing basis to finance capital expenditures and related
expenses for, among other things, upgrade of the Company's cable plant, the
offering of new services and the further participation in existing services, the
funding of costs of cable programming services prior to their becoming cash-flow
positive, and the servicing, repayment or refinancing of its indebtedness and
mandatorily redeemable preferred stock. The Company will require significant
additional financing, through debt and/or equity issuances, to meet its
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capital expenditure plans and to pay the principal of and interest on its debt
and to pay dividends and make redemption payments on its preferred stock. The
Company also intends to incur additional costs to facilitate the startup of such
adjunct businesses as high speed data service, digital video service and
residential telephony. Depending upon the timing and scope of the rollout of
these businesses, the Company may require additional capital. Depending on the
scope of the Company's participation in the PCS and DBS ventures, additional
capital may also be required for these businesses. In addition, the Company may
require additional capital if it elects to pay cash to (i) acquire ITT
Corporation's remaining interest in MSG following an exercise by ITT Corporation
of its put rights or by the Company of its call rights or (ii) make the
Cablevision of NYC Payment (as defined herein) to Charles F. Dolan due under the
Cablevision of NYC Agreement (as defined herein). There can be no assurance that
the Company will be able to issue additional debt or obtain additional equity
capital on satisfactory terms, or at all, to meet its future financing needs.
See "Management's Discussion and Analysis--Liquidity and Capital Resources."
FUTURE CAPITAL EXPENDITURES AND COMMITMENTS. The Company intends to make
substantial capital expenditures, including major system upgrades, with respect
to its cable television systems over the next several years. In addition, the
Company, through Rainbow Media and its subsidiaries, has entered into numerous
contracts relating to cable television programming, including rights agreements
with professional and other sports teams. These contracts typically require
substantial payments over extended periods of time. See Note 11 of Notes to the
Consolidated Financial Statements for a discussion of commitments.
The Company has a commitment to fund annual payments to Charles F. Dolan
related to Cablevision of New York City, L.P. ("Cablevision of NYC"). See
"Business--Consolidated Cable Affiliates--Cablevision of New York City" and
"Business--Programming Operations" in the Form 10-K and "Management's Discussion
and Analysis--Liquidity and Capital Resources."
INTANGIBLE ASSETS. The Company had total assets at June 30, 1997 of $4.6
billion, of which $2.4 billion were intangible assets, consisting of franchises,
affiliation agreements, excess cost over fair value of net assets acquired and
deferred financing, acquisition and other costs. It is possible that no cash
would be recoverable from the voluntary or involuntary sale of these intangible
assets.
VOTING CONTROL BY MAJORITY STOCKHOLDERS; DISPARATE VOTING RIGHTS. As of
June 30, 1997, Charles F. Dolan beneficially owned and possessed sole voting
power with respect to 10,805 shares or 0.1% of the Company's outstanding Class A
common stock (the "Class A Common Stock") and 4,859,281 shares or 43.7% of the
Company's outstanding Class B common stock (the "Class B Common Stock" and,
collectively with the Class A Common Stock, the "Common Stock"). In addition, as
of June 30, 1997, an aggregate of 1,240,000 shares or 11.2% of the outstanding
Class B Common Stock were held by a grantor retained annuity trust (the "GRA
Trust") established by Mr. Dolan for estate planning purposes. Mr. Dolan may be
deemed to have beneficial ownership of the shares of Class B Common Stock held
by the GRA Trust due to his right to reacquire the Class B Common Stock held by
the GRA Trust by substituting other property of equivalent value, but, until
such event, the GRA Trust, through its co-trustees (who are Mr. Dolan and his
spouse), has the power to vote and dispose of the shares of Class B Common Stock
held by it. As a result of his beneficial ownership of the shares held by the
GRA Trust, as of June 30, 1997, Mr. Dolan beneficially owned 10,805 shares or
0.1% of the Company's outstanding Class A Common Stock and 6,099,281 shares or
54.9% of the Company's outstanding Class B Common Stock. On a combined basis,
these shares represented 24.6% of the total number of shares of both classes of
Common Stock and 48.8% of the total voting power of the Common Stock. Other
trusts established by Mr. Dolan for the benefit of certain Dolan family members,
and as to which Mr. Dolan disclaims beneficial ownership, owned, as of June 30,
1997, an additional 40,000 shares of Class A Common Stock or 0.3% of the Class A
Common Stock and 5,019,928 shares of the Class B Common Stock or 45.1% of the
Class B Common Stock and 40.2% of the total voting power of all classes of the
Common Stock. As a result of this stock ownership, Dolan family members have the
power to elect all the directors subject to election by holders of the Class B
Common Stock, which directors constitute 75% of the entire Board of Directors of
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the Company. Moreover, because holders of Class B Common Stock are entitled to
ten votes per share while holders of Class A Common Stock are entitled to one
vote per share, Dolan family members may control stockholder decisions on
matters in which holders of Class A and Class B Common Stock vote together as a
class. These matters include the amendment of certain provisions of the
Company's certificate of incorporation (the "Certificate of Incorporation") and
the approval of fundamental corporate transactions, including mergers. In
addition, because the affirmative vote or consent of the holders of at least
66 2/3% of the outstanding shares of the Class B Common Stock, voting separately
as a class, is required to approve (i) the authorization or issuance of any
additional shares of Class B Common Stock and (ii) any amendment, alteration or
repeal of any of the provisions of the Certificate of Incorporation which
adversely affects the powers, preferences or rights of the Class B Common Stock,
Dolan family members also have the power to prevent such issuance or amendment.
The voting rights of the Class B Common Stock beneficially owned by the Dolan
family members will not be modified as a result of any transfer of legal or
beneficial ownership thereof. If the pending transactions with TCI are
consummated, the Common Stock of the Dolan family members will be converted into
shares of common stock of CSC Parent and the Dolan family members will continue
to maintain the voting rights set forth above, including the voting rights
resulting from the ownership of a majority of the total voting power of CSC
Parent's common stock.
RESTRICTIVE COVENANTS. The Credit Agreement and certain of the Company's
other debt instruments contain various financial and operating covenants which,
among other things, require the maintenance of certain financial ratios and
restrict the Company's ability to borrow funds from other sources and to utilize
funds for various purposes, including investments in certain subsidiaries.
Violation of the covenants in the Credit Agreement or in the indentures
governing the Company's publicly-issued debentures and notes could result in a
default under the Credit Agreement which would permit the bank lenders
thereunder (i) to restrict the Company's ability to borrow undrawn funds under
the Credit Agreement and (ii) to accelerate the maturity of borrowings
thereunder. See "Management's Discussion and Analysis--Liquidity and Capital
Resources."
RISKS RELATED TO REGULATION. The Company's cable television operations may
be adversely affected by government regulation, the impact of competitive forces
and technological changes. In 1992, Congress enacted the 1992 Cable Act, which
represented a significant change in the regulatory framework under which cable
television systems operate. In 1993 and 1994, the Federal Communications
Commission ("FCC") ordered reductions in cable television rates. In 1995, a
Federal appeals court upheld the material aspects of the FCC's rate regulation
scheme. Congress subsequently enacted legislation (the "Telecommunications Act
of 1996") that relaxes the regulation of cable television rates; however, the
most significant rate regulation relaxation affecting the Company will not occur
until after March 31, 1999. See "Business-- Cable Television
Operations--Competition" and "Business--Cable Television Operations--Regulation"
in the Form 10-K.
RISK OF COMPETITION. Cable operators compete with a variety of distribution
systems, including broadcast television stations, DBS, multichannel multipoint
distribution services ("MMDS"), satellite master antenna systems ("SMATV") and
private home dish earth stations. For example, four DBS systems are now
operational in the United States, some with investment by companies with
substantial resources such as Hughes Electronics Corp., AT&T Corp. and News
Corporation. The 1992 Cable Act prohibits a cable programmer that is owned by or
affiliated with a cable operator (such as Rainbow Media) from unreasonably
discriminating among or between cable operators and other multichannel video
distribution systems with respect to the price, terms and conditions of sale or
distribution of the programmer's service and from unreasonably refusing to sell
service to any multichannel video programming distributor. In several instances,
Rainbow Media has been ordered by the FCC to provide programming to
multi-channel video programmers after such multi-channel video programmers have
filed complaints pursuant to these program-access rules. Cable systems also
compete with the entities that make videotaped movies and programs available for
home rental. The 1992 Cable Act regulates the ownership by cable operators of
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MMDS and SMATV. Under the Telecommunications Act of 1996, the cross-ownership
provisions do not apply to any cable operator in a franchise area in which a
cable operator faces competition from video programming distributors meeting
certain statutory requirements. The Telecommunications Act of 1996 gives
telephone companies and other video providers the option of providing video
programming to subscribers through "open video systems" ("OVS"), a wired video
delivery system similar to a cable television system that would not require a
local cable franchise. Several OVS operators have sought to enter New York City,
Boston and Westchester County, New York. Additional video competition to cable
systems is possible from new wireless local multipoint distribution services
("LMDS") authorized by the FCC, for which spectrum will be auctioned by the FCC
in late 1997.
COMPETITION FROM TELEPHONE COMPANIES. The 1984 Cable Act barred
co-ownership of telephone companies and cable television systems operating in
the same service areas. The Telecommunications Act of 1996 repeals this
restriction and permits a telephone company to provide video programming
directly to subscribers in its telephone service territory, subject to certain
regulatory requirements, but generally prohibits a telephone company from
acquiring an in-region cable operator, except in certain small markets under
certain circumstances. Telephone companies (Ameritech Corp. in Ohio and Southern
New England Telephone Co. in Connecticut) have obtained or applied for local
franchises to construct and operate cable television systems in several
communities in which the Company currently holds cable franchises, and in
certain locations have commenced offering service. Neither the 1984 Cable Act
nor the 1992 Cable Act bars a telephone company from acquiring cable systems
outside its telephone service area. Several Regional Bell operating companies
have purchased or made investments in such cable systems. See "Business--Cable
Television Operations--Regulation" in the Form 10-K.
RISK OF NON-EXCLUSIVE FRANCHISES AND FRANCHISE RENEWALS. The Company's
cable television systems are operated primarily under non-exclusive franchise
agreements with local government franchising authorities, in some cases with the
approval of state cable television authorities. The Company's business is
dependent on its ability to obtain and renew its franchises. Although the
Company has never lost a franchise as a result of a failure to obtain a renewal,
its franchises are subject to non-renewal or termination under certain
circumstances. In certain cases, franchises have not been renewed at expiration
and the Company operates under either temporary operating agreements or without
a license while negotiating renewal terms with the franchising authorities. See
"Business--Cable Television Operations-- Franchises" in the Form 10-K.
RANKING OF DEBENTURES. The Old Debentures are, and the New Debentures will
be, senior unsecured obligations of Cablevision and will rank PARI PASSU in
right of payment with all existing and future unsubordinated indebtedness of
Cablevision. All secured indebtedness of Cablevision will have a prior claim
with respect to the assets securing such indebtedness. The liabilities,
including trade payables, of Cablevision's subsidiaries will have a prior claim
with respect to the assets of those subsidiaries. In that regard, certain of the
subsidiaries in the Company's Restricted Group have guaranteed the indebtedness
of Cablevision under the Credit Agreement, but these subsidiaries are not
guarantors of the Old Debentures and will not be guarantors of the New
Debentures. As of June 30, 1997, after giving effect to the transactions
described in the introductory paragraph to the table entitled "Capitalization"
and the application of the net proceeds from the sale of the Old Debentures, (i)
Cablevision would have had $840.0 million outstanding under the Credit
Agreement, $1,048.2 million of subordinated and senior subordinated indebtedness
and obligations and $115,000 of capitalized leases; (ii) subsidiaries in the
Restricted Group would have had $657.4 million of indebtedness and $5.2 million
of capitalized leases, in addition to the guarantees of Cablevision's borrowings
under the Credit Agreement; and (iii) subsidiaries in the Unrestricted Group
would have had $2,134.4 million of indebtedness and capitalized leases. All of
the indebtedness of subsidiaries in the Restricted Group has been guaranteed by
Cablevision ($151.0 million on a senior subordinated basis and the balance on a
senior basis) and $1,070.6 million of the indebtedness of subsidiaries in the
Unrestricted Group has been guaranteed by Cablevision on a limited recourse
basis
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with the guarantee limited to the stock of the relevant subsidiary, which stock
has been pledged to the lender to secure the guarantee.
ABSENCE OF PUBLIC MARKET. The New Debentures are new securities for which
there currently is no market. Although Bear, Stearns & Co. Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated have
informed the Company that they currently intend to make a market in the New
Debentures and the Old Debentures, they are not obligated to do so, and any such
market making may be discontinued at any time without notice. Accordingly, there
can be no assurance as to the development or liquidity of any market for the
Debentures. In connection with the issuance of the Old Debentures, the Company
arranged for the Old Debentures to be eligible for trading in the Private
Offerings, Resale and Trading through Automatic Linkages (PORTAL) market. The
Company does not intend to apply for listing of either the Old Debentures or the
New Debentures on any securities exchange or for quotation through the National
Association of Securities Dealers, Inc.'s Automated Quotation System.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the New
Debentures offered hereby. In consideration for issuing the New Debentures as
contemplated in this Prospectus, the Company will receive in exchange Old
Debentures in like principal amount, the terms of which are the same in all
material respects as the form and terms of the New Debentures, except that the
New Debentures have been registered under the Securities Act and will not
contain terms restricting the transfer thereof. The Old Debentures surrendered
in exchange for the New Debentures will be retired and canceled and cannot be
reissued. Accordingly, issuance of the New Debentures will not result in any
increase in the indebtedness of the Company.
The net proceeds received by the Company from the offering of the Old
Debentures were estimated to be $391.6 million. The Company initially applied
the net proceeds from the offering of the Old Debentures to repay borrowings
under the Credit Agreement, a portion of which were borrowed in July 1997 to
redeem the Company's 10 3/4% Senior Subordinated Debentures due 2004 (the
"10 3/4% Debentures").
THE EXCHANGE OFFER
GENERAL
In connection with the sale of the Old Debentures, the purchasers thereof
became entitled to the benefits of certain registration rights (the
"Registration Rights"). Pursuant to the agreement governing the Registration
Rights (the "Registration Rights Agreement"), the Company agreed to use its
reasonable best efforts, at its cost, to file and cause to become effective a
registration statement with respect to the Exchange Offer to exchange the Old
Debentures for the New Debentures. Upon such registration statement being
declared effective, the Company has agreed to offer the New Debentures in return
for surrender of the Old Debentures. For each Old Debenture surrendered to the
Company under the Exchange Offer, the Holder will receive a New Debenture of
equal principal amount. In the event that applicable interpretations of the
staff of the Commission do not permit the Company to effect the Exchange Offer
or under certain other circumstances, the Company has agreed, at its cost, to
use its reasonable best efforts to cause to become effective a shelf
registration statement (the "Shelf Registration Statement") with respect to
resales of the Old Debentures and to keep such registration statement effective
until August 26, 1999. The Company shall, in the event of such a shelf
registration, provide to each holder copies of the prospectus, notify each
holder when the Shelf Registration Statement for the Old Debentures has become
effective and take certain other actions as are required to permit resales of
the Old Debentures.
In the event an Exchange Offer is not consummated or a Shelf Registration
Statement is not declared effective on or prior to April 26, 1998, the annual
interest rate borne by the Old Debentures will be
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increased to 8 3/8%. Thereafter, at the end of each 90-day period during which
such Exchange Offer is not consummated or such Shelf Registration Statement is
not declared effective, the annual interest rate borne by the Old Debentures
will be increased by an additional 0.25%. Upon consummation of such Exchange
Offer or the effectiveness of such Shelf Registration Statement, the interest
rate borne by the Old Debentures will revert to 8 1/8%.
In the event an Exchange Offer is consummated, the Company will not be
required under the Registration Rights Agreement to file the Shelf Registration
Statement to register any outstanding Old Debentures, and the interest rate on
such Old Debentures will remain at its initial level of 8 1/8%. The Exchange
Offer will be deemed to have been consummated upon the earlier to occur of (i)
the Company having exchanged New Debentures for all outstanding Old Debentures
(other than Old Debentures held by a Restricted Holder) pursuant to the Exchange
Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, New
Debentures for all Old Debentures that have been tendered and not withdrawn on
the date that is 30 days following the commencement of such Exchange Offer. In
such event, holders of Old Debentures seeking liquidity in their investment
would have to rely on exemptions to registration requirements under the
securities laws, including the Securities Act. See "Description of New
Debentures--Registration Rights Agreement" and "Risk Factors."
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, the Company will accept all Old
Debentures properly tendered prior to 5:00 p.m., New York City time, on the
Expiration Date. The Company will issue $1,000 principal amount of New
Debentures in exchange for each $1,000 principal amount of outstanding Old
Debentures accepted in the Exchange Offer. Holders may tender some or all of
their Old Debentures pursuant to the Exchange Offer in denominations of $1,000
and integral multiples thereof.
Based on no-action letters issued by the staff of the Commission to third
parties, the Company believes that the New Debentures issued pursuant to the
Exchange Offer in exchange for Old Debentures may be offered for resale, resold
and otherwise transferred by holders thereof (other than any such holder that is
an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
requirements of the Securities Act provided that such New Debentures are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such New
Debentures. Any holder of Old Debentures who tenders in the Exchange Offer for
the purpose of participating in a distribution of the New Debentures will not be
permitted to rely on such interpretation by the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each broker-dealer
that receives New Debentures for its own account in the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Debentures. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Debentures received in
exchange for Old Debentures where such Old Debentures were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 90 days after the
Expiration Date, it will make this Prospectus and any amendment or supplement to
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
As of the date of this Prospectus, $400,000,000 aggregate principal amount
of the Old Debentures is outstanding.
This Prospectus, together with the accompanying letter of transmittal (the
"Letter of Transmittal"), is being sent to all registered holders as of October
31, 1997 (the "Record Date").
The Company shall be deemed to have accepted validly tendered Old Debentures
when, as and if it has given oral or written notice thereof to The Bank of New
York (the "Exchange Agent"). See "Exchange Agent." The Exchange Agent will act
as agent for the tendering holders of Old Debentures for the purpose of
receiving New Debentures from the Company and delivering New Debentures to such
holders.
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If any tendered Old Debentures are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted Old Debentures will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.
Holders of Old Debentures who tender in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Debentures pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean December 4, 1997, unless the Company,
in its sole discretion, extends the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
In order to extend the Expiration Date, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the record
holders of Old Debentures an announcement thereof, prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Such announcement may state that the Company is extending the Exchange
Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Old
Debentures, to extend the Exchange Offer or to terminate the Exchange Offer and
to refuse to accept Old Debentures not previously accepted, if any of the
conditions set forth herein under "Termination" shall have occurred and shall
not have been waived by the Company (if permitted to be waived by the Company),
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent, and (ii) to amend the terms of the Exchange Offer in any manner
deemed by it to be advantageous to the holders of the Old Debentures. Any such
delay in acceptance, extension, termination or amendment will be followed as
promptly as practicable by oral or written notice thereof. If the Exchange Offer
is amended in a manner determined by the Company to constitute a material
change, the Company will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of the Old Debentures of such amendment.
Without limiting the manner in which the Company may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the Exchange Offer, the Company shall have no obligation to publish, advertise,
or otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
INTEREST ON THE NEW DEBENTURES
The New Debentures will bear interest from August 26, 1997, payable
semiannually on February l5 and August 15 of each year commencing on February
15, 1998, at the rate of 8 1/8% per annum. Holders of Old Debentures whose Old
Debentures are accepted for exchange will be deemed to have waived the right to
receive any payment in respect of interest on the Old Debentures accrued from
August 26, 1997 until the date of the issuance of the New Debentures.
Consequently, holders who exchange their Old Debentures for New Debentures will
receive the same interest payment on February 15, 1998 (the first interest
payment date with respect to the Old Debentures and the New Debentures) that
they would have received had they not accepted the Exchange Offer.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail
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or otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Debentures (unless such tender is being effected pursuant to the
procedure for book-entry transfer described below) and any other required
documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
Any financial institution that is a participant in the Book-Entry Transfer
Facility system of The Depository Trust Company ("DTC") may make book-entry
delivery of the Old Debentures by causing DTC to transfer such Old Debentures
into the Exchange Agent's account in accordance with DTC's procedure for such
transfer. Although delivery of Old Debentures may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received or
confirmed by the Exchange Agent at its address set forth herein under "Exchange
Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. DELIVERY
OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE
DELIVERY TO THE EXCHANGE AGENT.
The tender by a holder of Old Debentures will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth herein. Holders may also request that their respective brokers,
dealers, commercial banks, trust companies or nominees effect such tender for
such holders.
The method of delivery of Old Debentures and the Letter of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the holders. Instead of delivery by mail, it is recommended that holders use
an overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Debentures
should be sent to the Company.
Only a holder of Old Debentures may tender such Old Debentures in the
Exchange Offer. The term "holder" with respect to the Exchange Offer means any
person in whose name Old Debentures are registered on the books of the Company
or any other person who has obtained a properly completed bond power from the
registered holder, or any person whose Old Debentures are held of record by DTC
who desires to deliver such Old Debentures by book-entry transfer at DTC.
Any beneficial holder whose Old Debentures are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old Debentures, either
make appropriate arrangements to register ownership of the Old Debentures in
such holder's name or obtain a properly completed bond power from the registered
holder. The transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act (an "Eligible Institution") unless the Old Debentures
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Debentures listed therein, such Old Debentures must be
endorsed or accompanied by appropriate bond
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powers which authorize such person to tender the Old Debentures on behalf of the
registered holder, in either case signed as the name of the registered holder or
holders appears on the Old Debentures.
If the Letter of Transmittal or any Old Debentures or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Old Debentures will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Old Debentures not properly tendered or any Old Debentures the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the absolute right to waive any
irregularities or conditions of tender as to particular Old Debentures. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Debentures must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Old Debentures nor shall any of them incur any
liability for failure to give such notification. Tenders of Old Debentures will
not be deemed to have been made until such irregularities have been cured or
waived. Any Old Debentures received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned without cost by the Exchange Agent to the tendering
holder of such Old Debentures unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to (a)
purchase or make offers for any Old Debentures that remain outstanding
subsequent to the Expiration Date, or, as set forth under "Termination," to
terminate the Exchange Offer and (b) to the extent permitted by applicable law,
purchase Old Debentures in the open market, in privately negotiated transactions
or otherwise. The terms of any such purchases or offers may differ from the
terms of the Exchange Offer.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Debentures and (i) whose Old Debentures
are not immediately available, or (ii) who cannot deliver their Old Debentures,
the Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date, or if such Holder cannot complete the procedure
for book-entry transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) setting forth the
name and address of the holder of the Old Debentures, the certificate number or
numbers of such Old Debentures and the principal amount of Old Debentures
tendered, stating that the tender is being made thereby, and guaranteeing that,
within five business days after the Expiration Date, the Letter of Transmittal
(or facsimile thereof), together with the certificate(s) representing the Old
Debentures to be tendered in prior form for transfer and any other documents
required by the Letter of Transmittal, will be deposited by the Eligible
Institution with the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or facsimile
thereof), together with the certificate(s) representing all tendered Old
Debentures in proper form for transfer (or confirmation of
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<PAGE>
a book-entry transfer into the Exchange Agent's account at DTC of Old Debentures
delivered electronically) and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within five business days after
the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Debentures may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date, unless previously accepted for exchange.
To withdraw a tender of Old Debentures in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the business day prior to the Expiration Date and prior to acceptance for
exchange thereof by the Company. Any such notice of withdrawal must (i) specify
the name of the person having deposited the Old Debentures to be withdrawn (the
"Depositor"), (ii) identify the Old Debentures to be withdrawn (including the
certificate number or numbers and principal amount of such Old Debentures),
(iii) be signed by the Depositor in the same manner as the original signature on
the Letter of Transmittal by which such Old Debentures were tendered (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to permit the Trustee with respect to the Old Debentures to register
the transfer of such Old Debentures into the name of the Depositor withdrawing
the tender and (iv) specify the name in which any such Old Debentures are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such withdrawal
notices will be determined by the Company, whose determination will be final and
binding on all parties. Any Old Debentures so withdrawn will be deemed not to
have been validly tendered for purposes of the Exchange Offer and no New
Debentures will be issued with respect thereto unless the Old Debentures so
withdrawn are validly re-tendered. Any Old Debentures which have been tendered
but which are not accepted for exchange will be returned to the holder thereof
without cost to such holder as soon as practicable after withdrawal, rejection
of tender or termination of the Exchange Offer. Properly withdrawn Old
Debentures may be re-tendered by following one of the procedures described above
under "Procedures for Tendering" at any time prior to the Expiration Date.
TERMINATION
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or exchange New Debentures for, any Old
Debentures not theretofore accepted for exchange, and may terminate or amend the
Exchange Offer as provided herein before the acceptance of such Old Debentures
if: (i) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the Exchange Offer, which, in
the Company's judgment, might materially impair the Company's ability to proceed
with the Exchange Offer, (ii) any law, statute, rule or regulation is proposed,
adopted or enacted, or any existing law, statute rule or regulation is
interpreted by the staff of the Commission in a manner, which, in the Company's
judgment, might materially impair the Company's ability to proceed with the
Exchange Offer, or (iii) the Company reasonably deems it advisable to terminate
the Exchange Offer.
If the Company determines that it may terminate the Exchange Offer, as set
forth above, the Company may (i) refuse to accept any Old Debentures and return
any Old Debentures that have been tendered to the holders thereof, (ii) extend
the Exchange Offer and retain all Old Debentures tendered prior to the
Expiration of the Exchange Offer, subject to the rights of such holders of
tendered Old Debentures to withdraw their tendered Old Debentures, or (iii)
waive such termination event with respect to the Exchange Offer and accept all
properly tendered Old Debentures that have not been withdrawn. If such waiver
constitutes a material change in the Exchange Offer, the Company will disclose
such change by means of a supplement to this Prospectus that will be distributed
to each registered holder of Old Debentures, and the Company will extend the
Exchange Offer for a period of five to ten business days,
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<PAGE>
depending upon the significance of the waiver and the manner of disclosure to
the registered holders of the Old Debentures, if the Exchange Offer would
otherwise expire during such period. See "Description of New
Debentures--Registration Rights Agreement."
EXCHANGE AGENT
The Bank of New York, the Trustee under the Indenture, has been appointed as
Exchange Agent for the Exchange Offer. Questions and requests for assistance and
requests for additional copies of this Prospectus or of the Letter of
Transmittal should be directed to the Exchange Agent addressed as follows:
The Bank of New York
Corporate Trust Services Window
101 Barclay Street, Ground Level
New York, N.Y. 10286
Attention: Reorganization Section, Arwen Gibbons
Facsimile Transmission: (212) 571-3080
Confirm by Telephone: (212) 815-6333
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and employees of the Company and its affiliates in person, by telegraph
or telephone.
The Company will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Prospectus, Letters of Transmittal and related
documents to the beneficial owners of the Old Debentures and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer, including
fees and expenses of the Exchange Agent and Trustee and accounting and legal
fees, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Debentures pursuant to the Exchange Offer. If, however, certificates
representing New Debentures or Old Debentures for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the Old
Debentures tendered, or if tendered Old Debentures are registered in the name of
any person other than the person signing the Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Old Debentures
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by the Company
upon the consummation of the Exchange Offer. The expenses of the Exchange Offer
will be amortized by the Company over the term of the New Debentures under
generally accepted accounting principles.
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<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its consolidated subsidiaries at June 30, 1997 and as adjusted to
reflect (i) the July 2, 1997 closing of the Company's purchase of the interests
in A-R Cable not previously owned by the Company (as described in the Company's
Form 10-Q for the quarter ended June 30, 1997) (the "A-R Cable Transaction"),
(ii) the redemption of the 10 3/4% Debentures and (iii) the issuance of
$400,000,000 of Old Debentures on August 26, 1997 and the application of the net
proceeds to the Company therefrom. See Note 2 below and "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF JUNE 30, 1997
----------------------
HISTORICAL PRO FORMA
---------- ----------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
LONG-TERM DEBT:
Restricted Group:
Bank indebtedness(1)................................................................... $ 850,372 $ 839,976
Cablevision MFR, Inc. bank indebtedness................................................ 316,424 316,424
8 1/8% Senior Debentures due 2009...................................................... -- 398,508
10 3/4% Senior Subordinated Debentures due 2004(2)..................................... 275,000 --
9 1/4% Senior Subordinated Notes due 2005.............................................. 300,000 300,000
9 7/8% Senior Subordinated Notes due 2006.............................................. 149,453 149,453
9 7/8% Senior Subordinated Debentures due 2013......................................... 199,023 199,023
10 1/2% Senior Subordinated Debentures due 2016........................................ 250,000 250,000
9 7/8% Senior Subordinated Debentures due 2023......................................... 149,696 149,696
Subordinated notes(3).................................................................. 151,000 151,000
Obligation to related party(4)......................................................... 189,952 189,958
Capitalized lease obligations.......................................................... 5,358 5,358
---------- ----------
Total Restricted Group............................................................... 2,836,284 2,949,396
---------- ----------
Unrestricted Cable:
Cablevision of Ohio bank indebtedness(5)............................................... 302,464 302,464
U.S. Cable bank indebtedness(5)........................................................ 156,610 156,610
A-R Cable Partners and CFHI bank indebtedness(5)....................................... 53,196 53,196
A-R Cable bank indebtedness(5)......................................................... -- 398,367
Capitalized lease obligations.......................................................... 200 200
---------- ----------
Total Unrestricted Cable............................................................. 512,470 910,837
---------- ----------
Other Unrestricted Subsidiaries:
AMC bank indebtedness.................................................................. 220,000 220,000
MSG bank indebtedness.................................................................. 804,000 804,000
Rainbow Media bank indebtedness(5)..................................................... 160,000 160,000
Capitalized lease obligations and other................................................ 39,537 39,537
---------- ----------
Total Other Unrestricted Subsidiaries................................................ 1,223,537 1,223,537
---------- ----------
Total long-term debt............................................................... 4,572,291 5,083,770
---------- ----------
Series H Redeemable Exchangeable Preferred Stock(6)...................................... 306,762 306,762
---------- ----------
Series M Redeemable Exchangeable Preferred Stock(6)...................................... 756,122 756,122
---------- ----------
STOCKHOLDERS' DEFICIENCY:
Series C/D Cumulative Preferred Stock:
Authorized--225,000 shares
Outstanding--110,622 shares...................................................... 1 1
Series I Cumulative Convertible Exchangeable Preferred Stock(6).......................... 14 14
Class A Common Stock:
Authorized--50,000,000 shares
Outstanding--13,733,347 shares................................................... 137 137
Class B Common Stock:
Authorized--20,000,000 shares
Outstanding--11,119,709 shares..................................................... 112 112
Paid-in capital.......................................................................... 164,950 164,950
Accumulated deficit...................................................................... (2,779,784) (2,611,811)
---------- ----------
Total stockholders' deficiency......................................................... (2,614,570) (2,446,597)
---------- ----------
Total capitalization................................................................. $3,020,605 $3,700,057
---------- ----------
---------- ----------
(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>
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<PAGE>
- ------------------------
FOOTNOTES:
(1) See "Management's Discussion and Analysis--Liquidity and Capital Resources"
and the Consolidated Financial Statements for a description of bank
indebtedness. These amounts do not include approximately $16.9 million
reserved under the Company's bank credit agreements for certain letters of
credit issued on behalf of the Company. The Company and its New Jersey
subsidiary are jointly and severally liable under the New Jersey
subsidiary's credit agreement. Certain of Cablevision's subsidiaries in the
Restricted Group have guaranteed Cablevision's borrowings under the Credit
Agreement.
(2) The 10 3/4% Debentures, included herein as long-term debt as of June 30,
1997, were called for redemption on June 25, 1997 and redeemed on July 25,
1997.
(3) Represents Cablevision MFR, Inc. seller notes in the amount of $141.3
million for Monmouth Cable and Riverview Cable and $9.7 million for CFHI
(after giving effect to the 1997 Warburg Transactions). These amounts are
effectively guaranteed on a senior subordinated basis by Cablevision.
(4) Obligation of NYC LP Corp., a wholly-owned Unrestricted Group subsidiary,
relating to the acquisition of Cablevision of NYC, which obligation has been
guaranteed by Cablevision. Cablevision's obligation under such guarantee may
be paid in cash or, at Cablevision's option, shares of Common Stock.
(5) This indebtedness has been guaranteed by Cablevision with recourse under
such guarantees limited to Cablevision's equity ownership in the related
borrower.
(6) At Cablevision's election, this series of Preferred Stock may be exchanged
for senior subordinated debentures in a principal amount corresponding to
the liquidation value of the Preferred Stock.
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<PAGE>
DESCRIPTION OF NEW DEBENTURES
The Old Debentures were, and the New Debentures will be, issued under an
Indenture dated as of August 15, 1997 (the "Indenture") between the Company and
The Bank of New York ("BONY"), trustee (the "Trustee"), a copy of which has been
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part. The Indenture is governed by the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The following summaries of certain provisions of
the Indenture do not purport to be complete, and where reference is made to
particular provisions of the Indenture, such provisions, including the
definitions of certain terms, are incorporated by reference as a part of such
summaries or terms, which are qualified in their entirety by such reference. The
definitions of certain capitalized terms used in the following summary are set
forth below under "Certain Definitions".
GENERAL
The Debentures will mature on August 15, 2009, will be limited to
$400,000,000 aggregate principal amount and represent unsecured obligations of
the Company. Each New Debenture will bear interest at the rate set forth on the
cover page hereof from August 26, 1997 or from the most recent interest payment
date to which interest has been paid, payable semi-annually on February 15 and
August 15 of each year, commencing February 15, 1998, to the person in whose
name the New Debenture (or any predecessor New Debenture) is registered at the
close of business on the January 31 and July 31 next preceding such interest
payment date.
Principal of and interest on the New Debentures will be payable, and the New
Debentures will be exchangeable and transferable, at the office or agency of the
Company in The City of New York (which initially will be the corporate trust
office of the Trustee at 101 Barclay Street, 21st Floor, New York, New York
10286); PROVIDED, HOWEVER, that payment of interest may be made at the option of
the Company by check mailed to the person entitled thereto as shown on the
Debenture Register. The New Debentures will be issued only in fully registered
form without coupons, in denominations of $1,000 or any integral multiple
thereof. No service charge will be made for any registration of transfer or
exchange of Debentures, except for any tax or other governmental charge that may
be imposed in connection therewith.
The Indenture does not contain any provisions that limit the ability of the
Company to incur indebtedness or that afford Holders of the Debentures
protection in the event of a highly leveraged or similar transaction involving
the Company, other than as described below under "Certain Covenants of the
Company--Limitation on Indebtedness".
SINKING FUND
The Debentures will not be entitled to the benefits of a sinking fund.
RANKING
The Old Debentures are, and the New Debentures will be, senior unsecured
obligations of Cablevision and will rank PARI PASSU in right of payment with all
existing and future unsubordinated indebtedness of Cablevision. All secured
indebtedness of Cablevision will have a prior claim with respect to the assets
securing such indebtedness. The liabilities, including trade payables, of
Cablevision's subsidiaries will have a prior claim with respect to the assets of
those subsidiaries. In that regard, certain of the subsidiaries in the Company's
Restricted Group have guaranteed the indebtedness of Cablevision under the
Credit Agreement, but are not guarantors of the Old Debentures and will not be
guarantors of the New Debentures. As of June 30, 1997, after giving effect to
the transactions described in the introductory paragraph to the table entitled
"Capitalization" and the application of the estimated net proceeds from the sale
of the Old Debentures, (i) Cablevision would have had $840.0 million outstanding
under the Credit Agreement, $1,048.2 million of subordinated and senior
subordinated indebtedness and obligations and $115,000 of capitalized leases;
(ii) subsidiaries in the Restricted Group would have had $657.4 million of
indebtedness and $5.2 million of capitalized leases, in addition to the
guarantees of Cablevision's
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<PAGE>
borrowings under the Credit Agreement; and (iii) subsidiaries in the
Unrestricted Group would have had $2,134.4 million of indebtedness and
capitalized leases. All of the indebtedness of subsidiaries in the Restricted
Group has been guaranteed by Cablevision ($151.0 million on a senior
subordinated basis and the balance on a senior basis) and $1,070.6 million of
the indebtedness of subsidiaries in the Unrestricted Group has been guaranteed
by Cablevision on a limited recourse basis with the guarantee limited to the
stock of the relevant subsidiary, which stock has been pledged to the lender to
secure the guarantee.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants and other provisions of the Indenture. Reference is made to the
Indenture for the full definition of all terms as well as any other capitalized
term used herein for which no definition is provided.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a) existing at the
time such Person is merged with or into the Company or a subsidiary of the
Company or becomes a subsidiary of the Company or (b) assumed in connection with
the acquisition of assets from such Person.
"AFFILIATE" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
control when used with respect to any specified Person means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"ANNUALIZED OPERATING CASH FLOW" means, for any period of three complete
consecutive calendar months, an amount equal to Operating Cash Flow for such
period multiplied by four.
"AVERAGE LIFE" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"BANKS" means the lenders from time to time under the Credit Agreement.
"CAPITALIZED LEASE OBLIGATION" means any obligation of a person to pay rent
or other amounts under a lease with respect to any property (whether real,
personal or mixed) acquired or leased by such Person and used in its business
that is required to be accounted for as a liability on the balance sheet of such
Person in accordance with U.S. generally accepted accounting principles ("GAAP")
and the amount of such Capitalized Lease Obligation shall be the amount so
required to be accounted for as a liability.
"CASH FLOW RATIO" means, as at any date, the ratio of (i) the sum of the
aggregate outstanding principal amount of all Indebtedness of the Company and
the Restricted Subsidiaries determined on a consolidated basis but excluding all
Interest Swap Obligations entered into by the Company or any Restricted
Subsidiary and one of the Banks outstanding on such date plus (but without
duplication of Indebtedness supported by Letters of Credit) the aggregate
undrawn face amount of all Letters of Credit outstanding on such date to (ii)
Annualized Operating Cash Flow determined as at the last day of the most recent
month for which financial information is available.
"CONSOLIDATED NET TANGIBLE ASSETS" of any Person means, as of any date, (a)
all amounts that would be shown as assets on a consolidated balance sheet of
such Person and its Restricted Subsidiaries prepared in accordance with GAAP,
less (b) the amount thereof constituting goodwill and other intangible assets as
calculated in accordance with GAAP.
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<PAGE>
"CUMULATIVE CASH FLOW CREDIT" means the sum of:
(a) cumulative Operating Cash Flow during the period commencing on July
1, 1988 and ending on the last day of the most recent month preceding the
date of the proposed Restricted Payment for which financial information is
available or, if cumulative Operating Cash Flow for such period is negative,
minus the amount by which cumulative Operating Cash Flow is less than zero,
plus
(b) the aggregate net proceeds received by the Company from the issuance
or sale (other than to a Restricted Subsidiary) of its capital stock (other
than Disqualified Stock) on or after January 1, 1992, plus
(c) the aggregate net proceeds received by the Company from the issuance
or sale (other than to a Restricted Subsidiary) of its capital stock (other
than Disqualified Stock) on or after January 1, 1992, upon the conversion
of, or exchange for, Indebtedness of the Company or any Restricted
Subsidiary or from the exercise of any options, warrants or other rights to
acquire capital stock of the Company.
For purposes of this definition, the net proceeds in property other than cash
received by the Company as contemplated by clauses (b) and (c) above shall be
valued at the fair market value of such property (as determined by the Board of
Directors of the Company, whose good faith determination shall be conclusive) at
the date of receipt by the Company.
"CUMULATIVE INTEREST EXPENSE" means, for the period commencing on July 1,
1988 and ending on the last day of the most recent month preceding the proposed
Restricted Payment for which financial information is available, the aggregate
of the interest expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP, including
interest expense attributable to Capitalized Lease Obligations.
"DEBT" with respect to any Person means, without duplication, any
liability, whether or not contingent, (i) in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements with respect thereto), but excluding
reimbursement obligations under any surety bond, (ii) representing the balance
deferred and unpaid of the purchase price of any property (including pursuant to
Capitalized Lease Obligations), except any such balance that constitutes a trade
payable, (iii) under Interest Swap Agreements (as defined in the Credit
Agreement) entered into pursuant to the Credit Agreement, (iv) under any other
agreement related to the fixing of interest rates on any Indebtedness, such as
an interest swap, cap or collar agreement (if and to the extent any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared on a consolidated basis in accordance with GAAP) or (v) guarantees of
items of other Persons which would be included within this definition for such
other Persons (whether or not the guarantee would appear on such balance sheet).
"Debt" does not include (i) Disqualified Stock, (ii) any liability for federal,
state, local or other taxes owed or owing by such Person or (iii) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities).
"DISQUALIFIED STOCK" means any capital stock of the Company or any
Restricted Subsidiary which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the maturity date of the Debentures.
"INDEBTEDNESS" with respect to any Person, means the Debt of such Person;
PROVIDED, HOWEVER, that, with respect to the Company, the "Minimum Payment" or
the "Preferred Payment" (each, a "Cablevision of NYC Payment"), as defined in
and pursuant to the Purchase and Reorganization Agreement (the "Cablevision of
NYC Agreement"), dated as of December 20, 1991, between the Company and Charles
F. Dolan, as amended as of March 28, 1992 and as further amended from time to
time, payable by a subsidiary of the Company and guaranteed by the Company as a
result of the acquisition of Cablevision of
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<PAGE>
NYC (the "Cablevision of NYC Acquisition") shall not be deemed to be
"Indebtedness" so long as the Company and such subsidiary are permitted to make
such Cablevision of NYC Payment in one or more classes of the Company's capital
stock (other than Disqualified Stock) pursuant to the terms of the Cablevision
of NYC Agreement and the Company and the Restricted Subsidiaries are prohibited
from making such Cablevision of NYC Payment in cash, debt securities,
Disqualified Stock or any combination thereof, pursuant to the terms of any
mortgage, indenture, credit agreement or other instrument that secures or
evidences Indebtedness for money borrowed or guaranteed by the Company or a
Restricted Subsidiary in an aggregate amount of $10,000,000 or more; PROVIDED
that, for purposes of the definition of "Indebtedness" (including the term
"Debt" to the extent incorporated in such definition) and for purposes of the
definition of "Event of Default", the term "guarantee" shall not be interpreted
to extend to a guarantee under which recourse is limited to the capital stock of
an entity that is not a Restricted Subsidiary.
"INTEREST SWAP OBLIGATIONS" means, with respect to any Person, the
obligations of such Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a floating or a fixed rate
of interest on a stated notional amount in exchange for periodic payments made
by such Person calculated by applying a fixed or a floating rate of interest on
the same notional amount.
"INVESTMENT" means any advance, loan, account receivable (other than an
account receivable arising in the ordinary course of business), or other
extension of credit (excluding, however, accrued and unpaid interest in respect
of any advance, loan or other extension of credit) or any capital contribution
to (by means of transfers of property to others, payments for property or
services for the account or use of others, or otherwise), any purchase or
ownership of any stock, bonds, notes, debentures or other securities (including,
without limitation, any interests in any partnership, joint venture or joint
adventure) of, or any bank accounts with or guarantee of any Indebtedness or
other obligations of, any Unrestricted Subsidiary or Affiliate that is not a
subsidiary of the Company, PROVIDED that (i) the term "Investment" shall not
include any transaction that would otherwise constitute an Investment of the
Company or a subsidiary of the Company to the extent that the consideration
provided by the Company or such subsidiary in connection therewith shall consist
of capital stock of the Company (other than Disqualified Stock) and (ii) the
term "guarantee" shall not be interpreted to extend to a guarantee under which
recourse is limited to the capital stock of an entity that is not a Restricted
Subsidiary.
"LIEN" means any lien, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature of a security interest and any agreement to give any security
interest). A Person shall be deemed to own subject to a Lien any property which
such Person has acquired or holds subject to the interest of a vendor or lessor
under a conditional sale agreement, capital lease or other title retention
agreement.
"MANDATORILY REDEEMABLE PREFERRED STOCK" means the Company's Series H
Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable
Preferred Stock and any series of preferred stock of the Company issued in
exchange for, or the proceeds of which are used to repurchase, redeem, defease
or otherwise acquire, all or any portion of the Series H Redeemable Exchangeable
Preferred Stock, Series M Redeemable Exchangeable Preferred Stock or any other
Mandatorily Redeemable Preferred Stock.
"OPERATING CASH FLOW" means, for any period, the sum of the following for
the Company and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (except for the amortization of
deferred installation income which shall be excluded from the calculation of
Operating Cash Flow for all purposes of the Indenture): (i) aggregate operating
revenues minus (ii) aggregate operating expenses (including technical,
programming, sales, selling, general and administrative expenses and salaries
and other compensation, net of amounts allocated to Affiliates, paid to any
general partner, director, officer or employee of the Company or any Restricted
Subsidiary, but excluding
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<PAGE>
interest, depreciation and amortization and the amount of non-cash compensation
in respect of the Company's employee incentive stock programs for such period
(not to exceed in the aggregate for any calendar year 7% of the Operating Cash
Flow for the previous calendar year) and, to the extent otherwise included in
operating expenses, any losses resulting from a write-off or write-down of
Investments by the Company or any Restricted Subsidiary in Affiliates). For
purposes of determining Operating Cash Flow, there shall be excluded all
management fees until actually paid to the Company or any Restricted Subsidiary
in cash.
"PERMITTED LIENS" means the following types of, Liens:
(a) Liens existing on the date of the Indenture;
(b) Liens on shares of the capital stock of an entity that is not a
Restricted Subsidiary, which Liens solely secure a guarantee by the Company
or a Restricted Subsidiary, or both, of Indebtedness of such entity;
(c) Liens on Receivables and Related Assets (and proceeds thereof)
securing only Indebtedness otherwise permitted to be incurred by a
Securitization Subsidiary;
(d) Liens on shares of the capital stock of a subsidiary of the Company
securing Indebtedness under the Credit Agreement or any renewal of or
replacement of the Credit Agreement;
(e) Liens granted in favor of the Company or any Restricted Subsidiary;
(f) Liens securing the Debentures;
(g) Liens securing Acquired Indebtedness created prior to (and not in
connection with or in contemplation of) the incurrence of such Indebtedness
by the Company or a Restricted Subsidiary; PROVIDED that such Lien does not
extend to any property or assets of the Company or any Restricted Subsidiary
other than the assets acquired in connection with the incurrence of such
Acquired Indebtedness;
(h) Liens securing Interest Swap Obligations or "margin stock", as
defined in Regulations G and U of the Board of Governors of the Federal
Reserve System;
(i) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like Liens arising in the
ordinary course of business of the Company or any Restricted Subsidiary and
with respect to amounts not yet delinquent or being contested in good faith
by appropriate proceedings;
(j) Liens for taxes, assessments, government charges or claims not yet
due or that are being contested in good faith by appropriate proceedings;
(k) zoning restrictions, easements, rights-of-way, restrictions and
other similar charges or encumbrances or minor defects in title not
interfering in any material respect with the business of the Company or any
of its Restricted Subsidiaries;
(l) Liens arising by reason of any judgment, decree or order of any
court, arbitral tribunal or similar entity so long as any appropriate legal
proceedings that may have been initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(m) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security or similar legislation;
(n) Liens securing the performance of bids, tenders, leases, contracts,
franchises, public or statutory obligations, surety, stay or appeal bonds,
or other similar obligations arising in the ordinary course of business;
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(o) Leases under which the Company or any Restricted Subsidiary is the
lessee or the lessor;
(p) purchase money mortgages or other purchase money liens (including
without limitation any Capital Lease Obligations) upon any fixed or capital
assets acquired after the date of the Indenture, or purchase money mortgages
(including without limitation Capitalized Lease Obligations) on any such
assets hereafter acquired or existing at the time of acquisition of such
assets, whether or not assumed, so long as (i) such mortgage or lien does
not extend to or cover any other asset of the Company or any Restricted
Subsidiary and (ii) such mortgage or lien secures the obligation to pay the
purchase price of such asset, interest thereon and other charges incurred in
connection therewith (or the obligation under such Capitalized Lease
Obligation) only;
(q) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
such letters of credit and products and proceeds thereof;
(r) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(s) Liens to secure other Indebtedness; PROVIDED, HOWEVER, that the
principal amount of any Indebtedness secured by such Liens, together with
the principal amount of any Indebtedness refinancing any Indebtedness
incurred under this clause (s) as permitted by clause (t) below (and
successive refinancings thereof), may not exceed 15% of the Company's
Consolidated Net Tangible Assets as of the last day of the Company's most
recently completed fiscal year for which financial information is available;
and
(t) any extension, renewal or replacement, in whole or in part, of any
Lien described in the foregoing clauses (a) through (s); PROVIDED that any
such extension, renewal or replacement shall be no more restrictive in any
material respect than the Lien so extended, renewed or replaced and shall
not extend to any additional property or assets.
"RECEIVABLES AND RELATED ASSETS" means (i) accounts receivable,
instruments, chattel paper, obligations, general intangibles, equipment and
other similar assets, including interests in merchandise or goods, the sale or
lease of which gives rise to the foregoing, related contractual rights,
guarantees, insurance proceeds, collections and other related assets, (ii)
equipment, (iii) inventory and (iv) proceeds of all of the foregoing.
"REFINANCING INDEBTEDNESS" means Indebtedness of the Company incurred to
redeem, repurchase, defease or otherwise acquire or retire for value other
Indebtedness that is subordinate in right of payment to the Debentures, so long
as any such new Indebtedness (i) is made subordinate to the Debentures at least
to the same extent as the Indebtedness being refinanced and (ii) does not have
(x) an Average Life less than the Average Life of the Indebtedness being
refinanced, (y) a final scheduled maturity earlier than the final scheduled
maturity of the Indebtedness being refinanced or (z) permit redemption at the
option of the holder earlier than the earlier of (A) the final scheduled
maturity of the Indebtedness being refinanced or (B) any date of redemption at
the option of the holder of the Indebtedness being refinanced.
"RESTRICTED PAYMENT" means
(a) any Stock Payment by the Company or a Restricted Subsidiary;
(b) any direct or indirect payment to redeem, purchase, defease or
otherwise acquire or retire for value, or permit any Restricted Subsidiary
to redeem, purchase, defease or otherwise acquire or retire for value, prior
to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company that is subordinate in right of
payment to the Debentures; PROVIDED, HOWEVER, that any direct or indirect
payment to redeem, purchase, defease or otherwise acquire or retire for
value, or permit any Restricted Subsidiary to redeem, repurchase, defease or
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otherwise acquire or retire for value, prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness that
is subordinate in right of payment to the Debentures shall not be a
Restricted Payment if either (i) after giving effect thereto, the ratio of
the Senior Indebtedness of the Company and the Restricted Subsidiaries to
Annualized Operating Cash Flow determined as of the last day of the most
recent month for which financial information is available is less than or
equal to 5 to 1 or (ii) such subordinate Indebtedness is redeemed,
purchased, defeased or otherwise acquired or retired in exchange for, or out
of, (x) the proceeds of a sale (within one year before or 180 days after
such redemption, purchase, defeasance, acquisition or retirement) of
Refinancing Indebtedness or capital stock of the Company or warrants, rights
or options to acquire capital stock of the Company or (y) any source of
funds other than the incurrence of Indebtedness; or
(c) any direct or indirect payment to redeem, purchase, defease or
otherwise acquire or retire for value any Disqualified Stock at its
mandatory redemption date or other maturity date if and to the extent that
Indebtedness is incurred to finance such redemption, purchase, defeasance or
other acquisition or retirement; PROVIDED, HOWEVER, that the redemption,
purchase, defeasance or other acquisition or retirement of Mandatorily
Redeemable Preferred Stock at its mandatory redemption or other maturity
date shall not be a Restricted Payment if and to the extent any Indebtedness
incurred to finance all or a portion of the purchase or redemption price
does not have a final scheduled maturity date, or permit redemption at the
option of the holder thereof, earlier than the final scheduled maturity of
the Debentures.
Notwithstanding the foregoing, Restricted Payments shall not include (x)
payments by any Restricted Subsidiary to the Company or any other Restricted
Subsidiary or (y) any Investment or designation of a Restricted Subsidiary as an
Unrestricted Subsidiary permitted under the "Limitation on Investments in
Unrestricted Subsidiaries and Affiliates" covenant.
"RESTRICTED SUBSIDIARY" means any subsidiary of the Company, whether
existing on the date of the Indenture or created subsequent thereto, designated
from time to time by the Company as a "RESTRICTED SUBSIDIARY"; PROVIDED,
HOWEVER, that no subsidiary that is not a Securitization Subsidiary can be or
remain so designated unless (i) at least 67% of each of the total equity
interest and the voting control of such subsidiary is owned, directly or
indirectly, by the Company or another Restricted Subsidiary and (ii) such
subsidiary is not restricted, pursuant to the terms of any loan agreement, note,
indenture or other evidence of indebtedness, from (a) paying dividends or making
any distribution on such subsidiary's capital stock or other equity securities
or paying any Indebtedness owed to the Company or to any Restricted Subsidiary,
(b) making any loans or advances to the Company or any Restricted Subsidiary or
(c) transferring any of its properties or assets to the Company or any
Restricted Subsidiary (it being understood that a financial covenant any of the
components of which are directly impacted by the taking of the action (e.g., the
payment of a dividend) itself (such as a minimum net worth test) would be deemed
to be a restriction on the foregoing actions, while a financial covenant none of
the components of which is directly impacted by the taking of the action (e.g.,
the payment of a dividend) itself (such as a debt to cash flow test) would not
be deemed to be a restriction on the foregoing actions); and PROVIDED, FURTHER,
that the Company may, from time to time, redesignate any Restricted Subsidiary
as an Unrestricted Subsidiary in accordance with the provisions of the
"Limitation on Investments in Unrestricted Subsidiaries and Affiliates"
covenant.
"SECURITIZATION SUBSIDIARY" means a Restricted Subsidiary that is
established for the limited purpose of acquiring and financing Receivables and
Related Assets and engaging in activities ancillary thereto; PROVIDED that (i)
no portion of the Indebtedness of a Securitization Subsidiary is guaranteed by
or is recourse to the Company or any other Restricted Subsidiary (other than
recourse for customary representations, warranties, covenants and indemnities,
none of which shall relate to the collectibility of the Receivables and Related
Assets) and (ii) none of the Company or any other Restricted Subsidiary has any
obligation to maintain or preserve such Securitization Subsidiary's financial
condition.
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"SENIOR INDEBTEDNESS" means, with respect to any Person, all principal of
(premium, if any) and interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such
Person whether or not a claim for post filing interest is allowed in such
proceedings) with respect to all Indebtedness of such Person; PROVIDED that
Senior Indebtedness shall not include (i) any Indebtedness of such Person that,
by its terms or the terms of the instrument creating or evidencing such
Indebtedness, is expressly subordinate in right of payment to the Debentures,
(ii) any guarantee of Indebtedness of any subsidiary of such Person if recourse
against such guarantee is limited to the capital stock or other equity interests
of such subsidiary, (iii) any obligation of such Person to any subsidiary of
such Person or, in the case of a Restricted Subsidiary, to the Company or any
other subsidiary of such Person or, in the case of a Restricted Subsidiary, to
the Company or any other subsidiary of the Company or (iv) any Indebtedness of
such Person (and any accrued and unpaid interest in respect thereof) which is
subordinate or junior in any respect to any other Indebtedness or other
obligation of such Person.
"STOCK PAYMENT" means, with respect to any Person, the payment or
declaration of any dividend, either in cash or in property (except dividends
payable in common stock or common shares of capital stock of such Person), or
the making by such Person of any other distribution, on account of any shares of
any class of its capital stock, now or hereafter outstanding, or the redemption,
purchase, retirement or other acquisition for value by such Person, directly or
indirectly, of any shares of any class of its capital stock, now or hereafter
outstanding, other than the redemption, purchase, defeasance or other
acquisition or retirement for value of any Disqualified Stock at its mandatory
redemption date or other maturity date.
"UNRESTRICTED SUBSIDIARY" means any subsidiary of the Company which is not
a Restricted Subsidiary.
CERTAIN COVENANTS OF THE COMPANY
The Indenture contains, among others, the following covenants:
LIMITATION ON INDEBTEDNESS. The Indenture provides that the Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly
incur, create, issue, assume, guarantee or otherwise become liable for,
contingently or otherwise, or become responsible for the payment of,
contingently or otherwise, any Indebtedness (other than Indebtedness between or
among any of the Company and Restricted Subsidiaries) unless, after giving
effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1.
At June 30, 1997, such Cash Flow Ratio was approximately 5.9 to 1.
LIMITATION ON RESTRICTED PAYMENTS. The Indenture provides that the Company
shall not, and shall not permit any Restricted Subsidiary to, make any
Restricted Payment if (a) at the time of such proposed Restricted Payment, a
Default or Event of Default shall have occurred and be continuing or shall occur
as a consequence of such Restricted Payment or (b) immediately after giving
effect to such Restricted Payment, the aggregate of all Restricted Payments that
shall have been made on or after July 1, 1988 would exceed the sum of:
(i) $25,000,000, plus
(ii) an amount equal to the difference between (A) the Cumulative Cash
Flow Credit and (B) 1.2 multiplied by Cumulative Interest Expense.
For purposes of the "Limitation on Restricted Payments" covenant, the amount
of any Restricted Payment, if other than cash, shall be based upon fair market
value as determined by the Board of Directors of the Company, whose good faith
determination shall be conclusive.
The foregoing provisions do not prevent: (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at such date of
declaration such payment complied with the above provisions; (ii) the
retirement, redemption, purchase, defeasance or other acquisition of any shares
of the Company's capital stock or warrants, rights or options to acquire capital
stock of the Company, in exchange for, or out
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of the proceeds of a sale (within one year before or 180 days after such
retirement, redemption, purchase or other acquisition) of, other shares of the
Company's capital stock or warrants, rights or options to acquire capital stock
of the Company; and (iii) the redemption of, or payments of cash dividends on,
the Company's 8% Series C Cumulative Preferred Stock (the "Series C Preferred
Stock") outstanding on January 1, 1997, which redemptions or dividends are
provided for by the terms of the Series C Preferred Stock in effect on such date
(or the redemption of or payment of cash dividends on any security of the
Company issued in exchange for or upon the conversion of such Series C Preferred
Stock; PROVIDED that the aggregate amount payable pursuant to the terms of such
security is no greater than the aggregate amount payable pursuant to the terms
of the Series C Preferred Stock). For purposes of determining the aggregate
permissible amount of Restricted Payments in accordance with clause (b) of the
first paragraph of this covenant, all amounts expended pursuant to clauses (i)
and (iii) of this paragraph shall be included and all amounts expended or
received pursuant to clause (ii) of this paragraph shall be excluded; PROVIDED,
HOWEVER, that amounts paid pursuant to clause (i) of this paragraph shall be
included only to the extent that such amounts were not previously included in
calculating Restricted Payments.
For the purposes of the foregoing provisions, the net proceeds from the
issuance of shares of capital stock of the Company upon conversion of
Indebtedness shall be deemed to be an amount equal to (i) the accreted value of
such Indebtedness on the date of such conversion and (ii) the additional
consideration, if any, received by the Company upon such conversion thereof,
less any cash payment on account of fractional shares (such consideration, if in
property other than cash, to be determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive). If the Company
makes a Restricted Payment which, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted under
the requirements of this covenant, such Restricted Payment shall be deemed to
have been made in compliance with this covenant notwithstanding any subsequent
adjustments made in good faith to the Company's financial statements affecting
Cumulative Cash Flow Credit or Cumulative Interest Expense for any period.
LIMITATION ON INVESTMENTS IN UNRESTRICTED SUBSIDIARIES AND AFFILIATES. The
Indenture provides that the Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, (i) make any Investment or
(ii) allow any Restricted Subsidiary to become an Unrestricted Subsidiary (a
"redesignation of a Restricted Subsidiary"), in each case unless (a) no Default
or Event of Default shall have occurred and be continuing or shall occur as a
consequence of such Investment or such redesignation of a Restricted Subsidiary,
and (b) after giving effect thereto, the Cash Flow Ratio shall be less than or
equal to 9 to 1.
The foregoing provisions of this covenant shall not prohibit (i) any renewal
or reclassification of any Investment existing on the date hereof or (ii) trade
credit extended on usual and customary terms in the ordinary course of business.
TRANSACTIONS WITH AFFILIATES. The Indenture provides that the Company shall
not, and shall not permit any of its subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to or purchase any property
or assets from, or enter into any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, an Affiliate of the Company
that is not a subsidiary of the Company, having a value, or for consideration
having a value, in excess of $10,000,000 individually or in the aggregate unless
the Board of Directors of the Company shall make a good faith determination that
the terms of such transaction are, taken as a whole, no less favorable to the
Company or such subsidiary, as the case may be, than those which might be
available in a comparable transaction with an unrelated Person. For purposes of
clarification, this provision shall not apply to Restricted Payments permitted
under "Limitation on Restricted Payments."
LIMITATION ON LIENS. The Indenture provides that the Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien of any kind, except for Permitted
Liens, on or with respect to any of its property or assets, whether owned at the
date of the Indenture or thereafter acquired, or any income, profits or proceeds
therefrom, or assign or otherwise
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convey any right to receive income thereon, unless (x) in the case of any Lien
securing Indebtedness that is subordinated in right of payment to the
Debentures, the Debentures are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Lien and (y) in the case of any
other Lien, the Debentures are equally and ratably secured.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture: (a) default for 30
days in payment of interest on the Debentures; (b) default in payment of
principal, of the Debentures at maturity, upon acceleration or otherwise; (c)
failure to comply with any other covenant or agreement of the Company, continued
for 60 days (or, with respect to certain covenants or agreements, 30 days) after
written notice as provided in the Indenture; (d) default or defaults under any
mortgage, indenture or instrument which secures or evidences any Indebtedness
for money borrowed or guaranteed by the Company or a Restricted Subsidiary in
any aggregate amount of $10,000,000 or more (but excluding any Indebtedness for
the deferred purchase price of property or services owed to the Person providing
such property or services as to which the Company or such Restricted Subsidiary
is contesting its obligation to pay the same in good faith and by proper
proceedings and for which the Company or such Restricted Subsidiary has
established appropriate reserves) which result from the failure to pay such
Indebtedness at final maturity or which has resulted in the acceleration of such
Indebtedness; (e) the entry of a final judgment or final judgments for the
payment of money by a court or courts of competent jurisdiction against the
Company or any Restricted Subsidiary in an aggregate amount exceeding
$10,000,000, which remain undischarged and unbonded for a period (during which
execution shall not be effectively stayed) of 60 days or as to which an
enforcement proceeding has been commenced by any creditor; and (f) certain
events of bankruptcy, insolvency or reorganization.
If an Event of Default (other than as specified in (f) above) shall occur
and be continuing under the Indenture, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the outstanding New Debentures
and Old Debentures, voting together as a single class, by written notice to the
Company (and to the Trustee if such notice is given by the Holders), may declare
all the unpaid principal of and interest on the Debentures to be due and payable
as provided in the Indenture. Upon a declaration of acceleration, such principal
and accrued interest shall be due and payable ten days after receipt by the
Company of such written notice. No action on the part of the Trustee or any
Holder of the Debentures is required for such acceleration if an Event of
Default specified in (f) above shall occur and be continuing. The Holders of at
least a majority in principal amount of the New Debentures and Old Debentures,
voting together as a single class, then outstanding may rescind an acceleration
and its consequences if (i) all existing Events of Default, other than the
non-payment of principal of or interest on the Debentures which have become due
solely because of the acceleration, have been cured or waived and (ii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. A declaration of acceleration because of an Event of
Default specified in clause (d) of the preceding paragraph would be
automatically annulled if the Indebtedness referred to therein were discharged,
or the Holders thereof rescinded their declaration of acceleration referred to
therein, within 30 days after the acceleration of the Debentures and no other
Event of Default had occurred and not been cured or waived during such period.
The Holders of a majority in principal amount of New Debentures and Old
Debentures, voting together as a single class, outstanding also have the right
to waive certain past defaults under the Indenture.
No Holder of any Debenture issued under the Indenture has any right to
institute any proceeding with respect to the Debentures, such Indenture or for
any remedy thereunder, unless (i) such Holder has previously given to the
Trustee written notice of a continuing Event of Default under the Indenture,
(ii) the Holders of at least 25% in principal amount of the outstanding New
Debentures and Old Debentures, voting together as a single class, issued under
the Indenture have made written request and offered reasonable indemnity to the
Trustee to institute such proceeding as Trustee under the Indenture, and (iii)
the Trustee has not received from the Holders of a majority in principal amount
of the outstanding New Debentures and Old Debentures, voting together as a
single class, a direction inconsistent with such
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request and the Trustee has failed to institute such proceeding within 60 days
after receipt of such notice. Such limitations do not apply, however, to a suit
instituted by a Holder of a Debenture for the enforcement of payment of the
principal of or interest on such Debenture on or after the respective due dates
expressed in such Debenture.
During the existence of an Event of Default, the Trustee is required to
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee
is not under any obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in principal amount of the outstanding New Debentures and Old
Debentures, voting together as a single class, have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee under the
Indenture.
The Company is required to furnish to the Trustee an annual statement as to
the performance by the Company of its obligations under the Indenture and as to
any default in such performance.
SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE DEBENTURES
The Indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Debentures, as expressly
provided for in the Indenture) as to all outstanding Debentures when either (i)
all such Debentures theretofore authenticated and delivered (except lost, stolen
or destroyed Debentures which have been replaced or paid) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable by it
under the Indenture or (ii) all such Debentures not theretofore delivered to the
Trustee for cancellation (a) have become due and payable, or (b) will become due
and payable within one year, and the Company has irrevocably deposited or caused
to be deposited with the Trustee funds in an amount sufficient to pay the entire
indebtedness on such Debentures not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of deposit (if such
Debentures are then due and payable) or to the applicable maturity date, and the
Company has paid all other sums payable by it under the Indenture.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture or the Debentures may be made
by the Company and the Trustee with the consent of the Holders of not less than
a majority in aggregate principal amount of the outstanding New Debentures and
Old Debentures, voting together as a single class; PROVIDED, HOWEVER, that no
such modification or amendment may, without the consent of the Holder of each
outstanding New Debenture and Old Debenture, (i) change the stated maturity of
the principal of, or any installment of interest on, any Debentures, (ii) reduce
the principal amount of or interest on, the Debentures, (iii) change the coin or
currency in which any Debenture or the interest thereon is payable, (iv) impair
the right to institute suit for the enforcement of any payment on or with
respect to the Debentures after the stated maturity, (v) reduce the percentage
in principal amount of outstanding Debentures necessary to waive compliance with
certain provisions of the Indenture or to waive certain defaults, or (vi) modify
any of the provisions relating to supplemental indentures requiring the consent
of Holders or relating to the waiver of past defaults, except to increase the
percentage of outstanding Debentures required for such actions or to provide
that certain other provisions of the Indenture cannot be modified or waived
without the consent of the Holder of each New Debenture and Old Debenture
affected thereby.
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The Holders of a majority in aggregate principal amount of the New
Debentures and Old Debentures, voting together as a single class, then
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, any Person, unless: (i) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or disposition shall have been made
shall be a corporation organized and existing under the laws of the United
States, any State thereof or the District of Columbia, and shall assume by a
supplemental indenture all the obligations of the Company under the Debentures
and the Indenture; (ii) immediately before and immediately after such
transaction, after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing; and (iii) immediately after such transaction,
and after giving effect thereto, the Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease or
conveyance or disposition shall have been made, shall have a Cash Flow Ratio not
in excess of 9 to 1.
DEFEASANCE
The Company at any time may terminate all of its obligations with respect to
the Debentures ("defeasance"), except for certain obligations, including those
regarding the Defeasance Trust (as defined below) and obligations to register
the transfer or exchange of the Debentures, to replace mutilated, destroyed,
lost or stolen Debentures and to maintain agencies in respect of the Debentures.
The Company may also at any time terminate its obligations under the covenants
set forth in the Indenture, which are described under "Certain Covenants of the
Company" above, and any omission to comply with such obligations shall not
constitute a Default or an Event of Default with respect to the Debentures
("covenant defeasance").
In order to exercise either defeasance or covenant defeasance, (i) the
Company must irrevocably deposit in trust, for the benefit of the Holders, with
the Trustee money or U.S. government obligations, or a combination thereof, in
such amounts as will be sufficient to pay the principal of and interest on the
Debentures to redemption or maturity (the "Defeasance Trust"), (ii) the Company
must deliver opinions of counsel to the effect that such Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred (in the case
of defeasance, such opinion must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable federal income tax laws), and
(iii) the Company must comply with certain other conditions.
GOVERNING LAW
The Indenture and the Old Debentures are, and the New Debentures will be,
governed by, and construed in accordance with, the laws of the State of New
York.
REGARDING THE TRUSTEE
BONY is the Trustee under the Indenture and the indentures relating to the
Company's existing senior subordinated indebtedness. BONY is a party to certain
credit agreements with the Company and its subsidiaries, including the Credit
Agreement, and is the Exchange Agent for the Exchange Offer. BONY may also
maintain other banking arrangements with the Company in the ordinary course of
business.
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BOOK-ENTRY DELIVERY AND FORM
The certificates representing the Old Debentures are, and for the New
Debentures will be, issued in fully registered form, without coupons. The Old
Debentures are, and the New Debentures will be, deposited with, or on behalf of,
DTC, and registered in the name of Cede & Co., as DTC's nominee in the form of
global Debenture certificates (the "Global Certificates").
REGISTRATION RIGHTS AGREEMENT
The Company is party to the Registration Rights Agreement with Bear, Stearns
& Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated, as the initial purchasers of the Old Debentures,
pursuant to which the Company has agreed, for the benefit of the holders of the
Old Debentures, to use its reasonable best efforts, at its cost, to file and
cause to become effective a registration statement with respect to the Exchange
Offer to exchange the Old Debentures for the New Debentures. Upon such
registration statement being declared effective, the Company has agreed to offer
the New Debentures in return for surrender of the Old Debentures. For each Old
Debenture surrendered to the Company under the Exchange Offer, the holder will
receive a New Debenture of equal principal amount. In the event that applicable
interpretations of the staff of the Commission do not permit the Company to
effect the Exchange Offer or under certain other circumstances, the Company has
agreed, at its cost, to use its reasonable best efforts to cause to become
effective the Shelf Registration Statement with respect to resales of the Old
Debentures and to keep such registration statement effective until August 26,
1999. The Company shall, in the event of such a shelf registration, provide to
each holder copies of the prospectus, notify each holder when the Shelf
Registration Statement for the Old Debentures has become effective and take
certain other actions as are required to permit resales of the Old Debentures.
In the event an Exchange Offer is not consummated or a Shelf Registration
Statement is not declared effective on or prior to April 26, 1998, then the
annual interest rate borne by the Old Debentures will be increased to 8 3/8%.
Thereafter, at the end of each 90-day period during which such Exchange Offer is
not consummated or such Shelf Registration Statement is not declared effective,
the annual interest rate borne by the Old Debentures will be increased by an
additional 0.25%. Upon consummation of such Exchange Offer or the effectiveness
of such Shelf Registration Statement, the interest rate borne by the Old
Debentures will revert to 8 1/8%.
In the event an Exchange Offer is consummated, the Company will not be
required under the Registration Rights Agreement to file the Shelf Registration
Statement to register any outstanding Old Debentures, and the interest rate on
such Old Debentures will remain at its initial level of 8 1/8%. The Exchange
Offer will be deemed to have been consummated upon the earlier to occur of (i)
the Company having exchanged New Debentures for all outstanding Old Debentures
(other than Old Debentures held by a Restricted Holder) pursuant to the Exchange
Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, New
Debentures for all Old Debentures that have been tendered and not withdrawn on
the date that is 30 days following the commencement of such Exchange Offer. In
such event, holders of Old Debentures seeking liquidity in their investment
would have to rely on exemptions to registration requirements under the
securities laws, including the Securities Act. See "Risk Factors."
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences applicable to the exchange of Old Debentures for New Debentures
pursuant to the Exchange Offer (the "Exchange") and the ownership and
disposition of New Debentures. This summary deals only with New Debentures held
as capital assets by holders who purchased Old Debentures at 100% of their
principal amount, and
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not with special classes of holders, such as dealers in securities or
currencies, banks, tax-exempt organizations, life insurance companies, persons
that hold New Debentures as a hedge (or hedged against) currency or interest
rate risks or that are part of a straddle or conversion transaction, or persons
whose functional currency is not the U.S. dollar. Investors who purchased the
Old Debentures at a price other than 100% of their principal amount should
consult their tax advisor as to the possible applicability to them of the
amortizable bond premium or market discount rules. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), its legislative history,
existing and proposed regulations thereunder, published rulings and court
decisions, all as currently in effect and all subject to change at any time,
perhaps with retroactive effect.
HOLDERS OF OLD DEBENTURES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING
THE CONSEQUENCES, IN THEIR PARTICULAR CIRCUMSTANCES, UNDER THE CODE AND THE LAWS
OF ANY OTHER TAXING JURISDICTION, OF THE EXCHANGE AND OWNERSHIP OF NEW
DEBENTURES.
EXCHANGE OFFER
For United States federal income tax purposes, the Exchange will be
disregarded and each New Debenture will be treated as a continuation of the
corresponding Old Debenture. Accordingly, holders will not recognize gain or
loss upon the Exchange.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST. Interest on a New Debenture will be taxable to a
United States Holder (as defined below), as ordinary income at the time it is
received or accrued, depending on the United States Holder's method of
accounting for tax purposes. A "United States Holder" is a beneficial owner that
is (i) a citizen or resident of the United States, (ii) a domestic corporation,
(iii) an estate the income of which is subject to United States federal income
tax without regard to its source or (iv) a trust if a United States court is
able to exercise primary supervision over administration of the trust and one or
more United States fiduciaries have authority to control all substantial
decisions of the trust.
PURCHASE, SALE, RETIREMENT AND OTHER DISPOSITION OF NEW DEBENTURES. A
United States Holder's tax basis in the New Debenture generally will be its cost
of its Old Debenture. Upon the sale, retirement or other disposition of a New
Debenture, a United States Holder will generally recognize gain or loss equal to
the difference between the amount realized (not including any amounts
attributable to accrued and unpaid interest) and the United States Holder's tax
basis in the New Debenture. Such gain or loss recognized on the sale or
retirement of a New Debenture will be long-term capital gain or loss if the
holding period of the New Debenture was more than one year. The holding period
of a New Debenture acquired by a United States Holder in the Exchange will
include the holding period of the corresponding Old Debenture.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder of a New Debenture who is (i) a nonresident alien individual or (ii) a
foreign corporation, partnership or estate or trust, in either case not subject
to United States federal income tax on a net income basis in respect of income
or gain from a New Debenture.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
(i) payments of principal, premium, if any, and interest by the Company
or any of its paying agents to any holder of a New Debenture that is a
United States Alien Holder will not be subject to United States federal
withholding tax if, in the case of interest, (a) the beneficial owner of the
New Debenture does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote, (b) the beneficial owner of the New Debenture is
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<PAGE>
not a controlled foreign corporation that is related to the Company through
stock ownership, and (c) either (A) the beneficial owner of the New
Debenture certifies to the Company or its agent, under penalties of perjury,
that it is not a United States Holder and provides its name and address or
(B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (a "financial institution") and certifies to the Company or its
agent under penalties of perjury that such statement has been received from
the beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof;
(ii) a United States Alien Holder of a New Debenture will not be a
subject to United States federal withholding tax on any gain realized on the
sale or exchange of a New Debenture; and
(iii) a New Debenture held by an individual who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for purposes of the United States federal estate
tax as a result of the individual's death if (a) the individual did not
actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote and (b) the
income on the New Debenture would not have been effectively connected with a
United States trade or business of the individual at the individual's death.
Recently proposed Internal Revenue Service Treasury regulations (the
"Proposed Regulations") would provide alternative methods for satisfying the
certification requirement described in clause (i)(c) above. The Proposed
Regulations also would require, with certain exceptions, in the case of New
Debentures held by a foreign partnership, that (x) the certification described
in clause (i)(c) above be provided by the partners rather than by the foreign
partnership and (y) the partnership provide certain information, including a
United States taxpayer identification number. A look-through rule generally
would apply in the case of tiered partnerships. The Proposed Regulations are
proposed to be effective for payments made after December 31, 1997. There can be
no assurance that the Proposed Regulations will be adopted or as to the
provisions that they will include if and when adopted in temporary or final
form.
BACKUP WITHHOLDING AND INFORMATION REPORTING
UNITED STATES HOLDERS. In general, information reporting requirements will
apply to payments of principal and interest on a New Debenture and the proceeds
of the sale of a New Debenture before maturity within the United States to
non-corporate United States Holders, and "backup withholding" at a rate of 31%
will apply to such payments if the United States Holder fails to provide an
accurate taxpayer identification number or is notified by the Internal Revenue
Service that it has failed to report all interest and dividends required to be
shown on its federal income tax returns.
UNITED STATES ALIEN HOLDERS. Under current law, information reporting on
Internal Revenue Service Form 1099 and backup withholding will not apply to
payments of principal and interest made by the Company or a paying agent to a
United States Alien Holder on a New Debenture; PROVIDED, the certification
described in clause (i)(c) under "United States Alien Holders" above is
received; and provided further that the payor does not have actual knowledge
that the Holder is a United States person. The Company or a paying agent,
however, may report (on Internal Revenue Service Form 1042S) payments of
interest on New Debentures. See the discussion above with respect to the rules
under the Proposed Regulations.
Payments of the proceeds from the sale by a United States Alien Holder of a
New Debenture made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payment. Payments of
the proceeds from the sale of a New Debenture to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or
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<PAGE>
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Debentures for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Debentures. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Debentures received in exchange for Old
Debentures where such Old Debentures were acquired as a result of market-making
activities or other trading activities. The Company has agreed that it will make
this Prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale for a period of 90 days from the date of
this Prospectus, or shorter period as will terminate when all Old Debentures
acquired by broker-dealers for their own accounts as a result of market-making
activities or other trading activities have been exchanged for New Debentures
and resold by such broker-dealers.
The Company will not receive any proceeds from any sale of New Debentures by
broker-dealers. New Debentures received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Debentures or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Debentures. Any
broker-dealer that resells New Debentures that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Debentures may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Debentures and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days from the date of this Prospectus, or such shorter
period as will terminate when all Old Debentures acquired by broker-dealers for
their own accounts as a result of market-making activities or other trading
activities have been exchanged for New Debentures and resold by such broker-
dealers, the Company will promptly send additional copies of this Prospectus and
any amendment or supplement to this Prospectus to any broker-dealer that
requests such documents in the Letter of Transmittal.
VALIDITY OF NEW DEBENTURES
The validity of the New Debentures will be passed upon for the Company by
Sullivan & Cromwell, New York, New York, counsel to the Company.
EXPERTS
The consolidated financial statements and schedule of the Company and its
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three-year period ended December 31, 1996 that are incorporated in this
Prospectus by reference have been incorporated herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of A-R Cable Services, Inc. and its
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three-year period ended December 31, 1996 that are incorporated in this
Prospectus by reference have been incorporated herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
rights to which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
The first paragraph of Article Ninth of the Company's Certificate of
Incorporation provides:
The corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, or by any successor thereto, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred
to in or covered by said section. Such right to indemnification shall
continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. The indemnification provided for herein
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise.
Article VIII of the By-Laws of the Company provides:
A. The corporation shall indemnify each person who was or is made a
party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or alleged
action in any other capacity while serving as a director, officer, employee
or agent, to the maximum extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than said law
permitted the corporation to provide prior to such amendment), against all
expense, liability and loss (including attorney's fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred by such person in connection with such
proceeding. Such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators. The right to
indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition;
provided that,
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if the Delaware General Corporation Law so requires, the payment of such
expenses incurred by a director or officer in advance of the final
disposition of a proceeding shall be made only upon receipt by the
corporation of an undertaking by or on behalf of such person to repay all
amounts so advanced if it shall ultimately be determined that such person is
not entitled to be indemnified by the corporation as authorized in this
Article or otherwise.
B. The right to indemnification and advancement of expenses conferred on
any person by this Article shall not limit the corporation from providing
any other indemnification permitted by law nor shall it be deemed exclusive
of any other right which any such person may have or hereafter acquire under
any statute, provision of the Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
C. The corporation may purchase and maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
The Company has entered into indemnification agreements with certain of its
officers and directors indemnifying such officers and directors from and against
certain expenses, liabilities or other matters referred to in or covered by
Section 145 of the Delaware General Corporation Law. The Company has also
entered into an agreement with Charles F. Dolan ("Mr. Dolan"), the Chairman of
the Company, pursuant to which Mr. Dolan has agreed to guarantee the Company's
obligation to indemnify its officers and directors to the fullest extent
permitted by Delaware law. In addition, subject to certain limitations, Mr.
Dolan has agreed to indemnify such officers and directors against any loss or
expense such person may incur in connection with any transaction involving Mr.
Dolan or entities affiliated with Mr. Dolan to the extent indemnification is not
provided by the Company. Any payment required to be made by Mr. Dolan pursuant
to such agreement will be reduced by any proceeds of insurance or reimbursement
under any other form of indemnification reimbursement available to such officer
or director. The Company maintains directors' and officers' liability insurance.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. The second paragraph of Article Ninth of the Company's Certificate of
Incorporation provides for such limitation of liability.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
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4.1 -- Registration Rights Agreement, dated August 26, 1997, between the Company and
Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley & Co. Incorporated.*
4.2 -- Indenture dated as of August 15, 1997 between the Company and Trustee.*
4.3 -- Form of 8 1/8% Series B Senior Debentures due 2009 (included in Exhibit 4.2).
5.1 -- Opinion of Sullivan & Cromwell.*
12.1 -- Computation of deficiency of earnings to fixed charges.*
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Sullivan & Cromwell (included in Exhibit 5.1).
24 -- Powers of Attorney.*
25 -- Statement of Eligibility of The Bank of New York.*
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
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- ------------------------
* Previously filed.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by any such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether or not
such indemnification is against public policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Oyster Bay and the State of New York, on the 30th day
of October, 1997.
CABLEVISION SYSTEMS CORPORATION
By: /s/ WILLIAM J. BELL
-----------------------------------------
Name: William J. Bell
Title: Vice Chairman
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on October 30, 1997.
SIGNATURE TITLE
- ------------------------------ ---------------------------
* Chief Executive Officer and
- ------------------------------ Director (Principal
James L. Dolan Executive Officer)
/s/ WILLIAM J. BELL Vice Chairman and Director
- ------------------------------ (Principal Financial
William J. Bell Officer)
* Senior Vice President and
- ------------------------------ Controller (Principal
Andrew B. Rosengard Accounting Officer)
* Chairman of the Board of
- ------------------------------ Directors
Charles F. Dolan
* Vice Chairman and Director
- ------------------------------
Marc A. Lustgarten
* Chief Operating Officer and
- ------------------------------ Director
Robert P. May
* Executive Vice President,
- ------------------------------ General Counsel,
Robert S. Lemle Secretary and Director
* Senior Vice President and
- ------------------------------ Director
Sheila A. Mahony
* Director and Chairman of
- ------------------------------ the Executive Committee
John Tatta
* Director
- ------------------------------
Patrick F. Dolan
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SIGNATURE TITLE
- ------------------------------ ---------------------------
* Director
- ------------------------------
Francis F. Randolph, Jr.
* Director
- ------------------------------
Daniel G. Sweeney
* Director
- ------------------------------
Charles D. Ferris
* Director
- ------------------------------
Richard H. Hochman
* Director
- ------------------------------
Victor Oristano
* Director
- ------------------------------
Vincent Tese
*By: /S/ WILLIAM J. BELL , as
Attorney-in-Fact
-------------------------------------
William J. Bell
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Cablevision Systems Corporation
and A-R Cable Services, Inc.:
We consent to the use of our reports, incorporated herein by reference, and to
the references to our firm under the heading "Selected Financial Data" and
"Experts" in the prospectus and the Registration Statement of Cablevision
Systems Corporation on Amendment No. 1 to the Form S-4.
KPMG Peat Marwick LLP
Jericho, New York
October 29, 1997
<PAGE>
Exhibit 99.1
LETTER OF TRANSMITTAL
FOR
8 1/8% SENIOR DEBENTURES
OF
CABLEVISION SYSTEMS CORPORATION
PURSUANT TO THE
EXCHANGE OFFER
IN RESPECT OF
ALL OF ITS OUTSTANDING 8 1/8% SENIOR
DEBENTURES DUE 2009
FOR
8 1/8% SERIES B SENIOR DEBENTURES DUE 2009
---------------------
PURSUANT TO THE PROSPECTUS DATED NOVEMBER 3, 1997
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER
4, 1997 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS
OF OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE
BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offer Is:
THE BANK OF NEW YORK
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BY HAND OR OVERNIGHT DELIVERY: Facsimile Transmissions: BY REGISTERED OR CERTIFIED
(Eligible Institutions MAIL:
Only)
The Bank of New York The Bank of New York
101 Barclay Street (212) 571-3080 101 Barclay Street, 7E
Corporate Trust Services Window New York, New York 10286
Ground Level To Confirm by Telephone Attention: Reorganization
Attention: Reorganization or for Information Call: Section,
Section, Arwen Gibbons
Arwen Gibbons (212) 815-6333
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DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE
A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW DEBENTURES FOR THEIR OLD
DEBENTURES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW)
THEIR OLD DEBENTURES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
<PAGE>
By execution hereof, the undersigned acknowledges receipt of the Prospectus
(the "Prospectus"), dated November 3, 1997, of Cablevision Systems Corporation,
a Delaware corporation (the "Company"), which, together with this Letter of
Transmittal and the instructions hereto (the "Letter of Transmittal"),
constitute the Company's offer (the "Exchange Offer") to exchange $1,000
principal amount of its 8 1/8% Series B Senior Debentures due 2009 (the "New
Debentures") that have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement of which
the Prospectus constitutes a part, for each $1,000 principal amount of its
outstanding 8 1/8% Senior Debentures due 2009 (the "Old Debentures"), upon the
terms and subject to the conditions set forth in the Prospectus.
This Letter of Transmittal is to be used by Holders if: (i) certificates
representing Old Debentures are to be physically delivered to the Exchange Agent
herewith by Holders; (ii) tender of Old Debentures is to be made by book-entry
transfer to the Exchange Agent's account at The Depository Trust Company (the
"Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in
the Prospectus under "The Exchange Offer--Procedures for Tendering" by any
financial institution that is a participant in DTC and whose name appears on a
security position listing as the owner of Old Debentures (such participants,
acting on behalf of Holders, are referred to herein, together with such Holders,
as "Acting Holders"); or (iii) tender of Old Debentures is to be made according
to the guaranteed delivery procedures set forth in the Prospectus under "The
Exchange Offer--Procedures for Tendering." DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person: (i)
in whose name Old Debentures are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered Holder; or (ii) whose Old Debentures are held of record by DTC who
desires to deliver such Old Debentures by book-entry transfer at DTC.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Debentures must
complete this letter in its entirety.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Exchange Agent. See Instruction 6 herein.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD
DEBENTURES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
2
<PAGE>
List below the Old Debentures to which this Letter of Transmittal relates.
If the space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule to
this Letter of Transmittal. Tenders of Old Debentures will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
<TABLE>
<S> <C> <C>
DESCRIPTION OF OLD DEBENTURES
<CAPTION>
AGGREGATE
CERTIFICATE PRINCIPAL
NUMBER(S)* AMOUNT
(ATTACH SIGNED TENDERED (IF
NAME(S) AND ADDRESS(ES) OF HOLDER(S) LIST IF LESS
(PLEASE FILL IN, IF BLANK) NECESSARY) THAN ALL) **
<S> <C> <C>
TOTAL PRINCIPAL AMOUNT OF OLD DEBENTURES TENDERED
* Need not be completed by Holders tendering by book-entry transfer.
** Need not be completed by Holders who wish to tender with respect to all Old
Debentures listed. See Instruction 2.
</TABLE>
/ / CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Book-Entry Account No.: ________________________________________________
Transaction Code No.: ______________________________________________________
If Holders desire to tender Old Debentures pursuant to the Exchange Offer and
(i) certificates representing such Old Debentures are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Old Debentures or other required documents to
reach the Exchange Agent prior to the Expiration Date or (iii) the procedures
for book-entry transfer cannot be completed prior to the Expiration Date, such
Holders may effect a tender of such Old Debentures in
3
<PAGE>
accordance with the guaranteed delivery procedures set forth in the Prospectus
under "The Exchange Offer--Procedures for Tendering."
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Holder(s) of Old Debentures: ____________________________________
Window Ticket No. (if any): ________________________________________________
Date of Execution of
Notice of Guaranteed Delivery: _______________________________________________
Name of Eligible Institution that Guaranteed Delivery: _____________________
If Delivered by Book-Entry Transfer: _______________________________________
Name of Tendering Institution: _________________________________________
DTC Book-Entry Account No.: ____________________________________________
Transaction Code No.: __________________________________________________
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
DEBENTURES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD DEBENTURES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
4
<PAGE>
Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company, the above described aggregate
principal amount of the Company's 8 1/8% Senior Debentures due 2009 (the "Old
Debentures") in exchange for a like aggregate principal amount of the Company's
8 1/8% Series B Senior Debentures due 2009 (the "New Debentures") which have
been registered under the Securities Act upon the terms and subject to the
conditions set forth in the Prospectus dated November 3, 1997 (as the same may
be amended or supplemented from time to time, the "Prospectus"), receipt of
which is acknowledged, and in this Letter of Transmittal (which, together with
the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of the principal
amount of Old Debentures tendered in accordance with this Letter of Transmittal,
the undersigned sells, assigns and transfers to, or upon the order of, the
Company all right, title and interest in and to the Old Debentures tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent its agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company and as Trustee under the Indenture
for the Old Debentures and the New Debentures) with respect to the tendered Old
Debentures with full power of substitution to (i) deliver certificates for such
Old Debentures to the Company, or transfer ownership of such Old Debentures on
the account books maintained by DTC, together in either such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Company and (ii) present such Old Debentures for transfer on the books of
the Company and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Old Debentures, all in accordance with the terms of
the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full power
and authority to tender, sell, assign and transfer the Old Debentures tendered
hereby and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim, when the same are acquired by the Company. The
undersigned also acknowledges that this Exchange Offer is being made in reliance
upon an interpretation by the staff of the Securities and Exchange Commission
that the New Debentures issued in exchange for the Old Debentures pursuant to
the Exchange Offer may be offered for sale, resold and otherwise transferred by
holders thereof (other than any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such New Debentures are acquired in the ordinary
course of such holders business and such holders have no arrangement with any
person to participate in the distribution of such New Debentures. If the
undersigned is not a broker-dealer, the undersigned represents that it is not
engaged in, and does not intend to engage in, a distribution of the New
Debentures.
The undersigned will upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment and transfer of the Old Debentures tendered
hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Old Debentures when, and as if the Company has given
oral or written notice thereof to the Exchange Agent. If any tendered Old
Debentures are not accepted for exchange pursuant to the Exchange Offer for any
reason, certificates for any such unaccepted Old Debentures will be returned
(except as noted below with respect to tenders through DTC), without expense, to
the undersigned at the address shown below or at a different address shown below
or at a different address as may be indicated under "Special Issuance
Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned and every obligation under this Letter of Transmittal shall be
binding upon the undersigned's heirs, personal representatives, successors and
assigns.
5
<PAGE>
The undersigned understands that tenders of Old Debentures pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the certificates representing the New Debentures issued in exchange for
the Old Debentures accepted for exchange and return any Old Debentures not
tendered or not exchanged, in the name(s) of the undersigned (or in either such
event in the case of Old Debentures tendered by DTC, by credit to the account at
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please send the certificates representing the New Debentures
issued in exchange for the Old Debentures accepted for exchange and any
certificates for Old Debentures not tendered or not exchanged (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signatures, unless, in either event, tender is being made through
DTC. In the event that both "Special Issuance Instructions" and "Special
Delivery Instructions" are completed, please issue the certificates representing
the New Debentures issued in exchange for the Old Debentures accepted for
exchange and return any Old Debentures not tendered or not exchanged in the
name(s) of, and send said certificates to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Old Debentures from the name of the registered holder(s) thereof if the
Company does not accept for exchange any of the Old Debentures so tendered.
BY TENDERING OLD DEBENTURES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF CABLEVISION SYSTEMS CORPORATION, (II) ANY NEW DEBENTURES TO BE
RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY
PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF NEW DEBENTURES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE
UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES
NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF SUCH NEW DEBENTURES. BY TENDERING OLD DEBENTURES PURSUANT TO THE
EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD
DEBENTURES WHICH A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN
INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE
OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD
DEBENTURES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD
DEBENTURES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT
OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE
PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
DEBENTURES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS,
SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER"
WITHIN THE MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN
CONNECTION WITH RESALES OF NEW DEBENTURES RECEIVED IN EXCHANGE FOR OLD
DEBENTURES, WHERE SUCH OLD DEBENTURES WERE ACQUIRED BY SUCH PARTICIPATING
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
6
<PAGE>
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90
DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW
DEBENTURES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT
REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD DEBENTURES FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER"), BY TENDERING SUCH OLD DEBENTURES AND EXECUTING THIS LETTER OF
TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE
SALE OF NEW DEBENTURES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED
OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE NEW
DEBENTURES MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE
TO SUSPEND THE SALE OF THE NEW DEBENTURES, IT SHALL EXTEND THE 90-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE
THE PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW DEBENTURES BY THE NUMBER OF
DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE
TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED
COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF
THE NEW DEBENTURES OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY HAS GIVEN
NOTICE THAT THE SALE OF NEW DEBENTURES MAY BE RESUMED, AS THE CASE MAY BE.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
DEBENTURES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
OLD DEBENTURES AS SET FORTH IN SUCH BOX.
7
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF
OLD DEBENTURES REGARDLESS OF WHETHER OLD DEBENTURES ARE BEING PHYSICALLY
DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Debentures
exactly as their name(s) appear(s) on certificate(s) for Old Debentures or, if
tendered by a participant in DTC, exactly as such participant's name appears on
a security position listing as the owner of Old Debentures, or by person(s)
authorized to become registered Holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person
acting in a fiduciary or representative capacity, such person must set forth his
or her full title below under "Capacity" and submit evidence satisfactory to the
Company of such person's authority to so act. See Instruction 3 herein.
If the signature appearing below is not of the registered Holder(s) of the
Old Debentures, then the registered Holder(s) must sign a valid proxy.
<TABLE>
<S> <C>
X Date:
X Date:
Signature(s) of Holder(s) or Authorized
Signatory
Name(s): Address:
(Please Print) (Including Zip Code)
Capacity: Area Code and Telephone No.:
Social Security No.:
</TABLE>
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
________________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
________________________________________________________________________________
(Address (including zip code) and Telephone Number (including area code) of
Firm)
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Printed Name)
________________________________________________________________________________
(Title)
Date: ________________
8
<PAGE>
- ------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTION 4 HEREIN)
To be completed ONLY if certificates for Old Debentures in a principal
amount not tendered are to be issued in the name of, or the New Debentures
issued pursuant to the Exchange Offer are to be issued to the order of,
someone other than the person or persons whose signature(s) appear(s) within
this Letter of Transmittal or issued to an address different from that shown
in the box entitled "Description of Old Debentures" within this Letter of
Transmittal, or if Old Debentures tendered by book-entry transfer that are
not accepted for purchase are to be credited to an account maintained at
DTC.
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
(PLEASE PRINT)
__________________________________________________________________________
ZIP CODE
__________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 HEREIN)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 4 HEREIN)
To be completed ONLY if certificates for Old Debentures in a principal
amount not tendered or not accepted for purchase or the New Debentures
issued pursuant to the Exchange Offer are to be sent to someone other than
the person or persons whose signature(s) appear(s) within this Letter of
Transmittal or to an address different from that shown in the box entitled
"Description of Old Debentures" within this Letter of Transmittal.
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
(PLEASE PRINT)
__________________________________________________________________________
ZIP CODE
__________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 HEREIN)
- -----------------------------------------------------
9
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER AND THE SOLICITATION
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD DEBENTURES. The
certificates for the tendered Old Debentures (or a confirmation of a book-entry
transfer into the Exchange Agent's account at DTC of all Old Debentures
delivered electronically), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof and any other documents
required by this Letter of Transmittal must be received by the Exchange Agent at
its address set forth herein prior to 5:00 P.M., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Debentures, this
Letter of Transmittal and all other required documents to the Exchange Agent is
at the election and risk of the Holder and, except as otherwise provided below,
the delivery will be deemed made only when actually received by the Exchange
Agent. Instead of delivery by mail, it is recommended that the Holder use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Debentures
should be sent to the Company.
Holders who wish to tender their Old Debentures and (i) whose Old Debentures
are not immediately available or (ii) who cannot deliver their Old Debentures,
this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Old Debentures and
follow the guaranteed delivery procedures set forth in the Prospectus. Pursuant
to such procedures: (i) such tender must be made by or through an Eligible
Institution; (ii) prior to the Expiration Date, the Exchange Agent must have
received from the Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder of the Old Debentures, the
certificate number or numbers of such Old Debentures and the principal amount of
Old Debentures tendered, stating that the tender is being made thereby and
guaranteeing that, within five business days after the Expiration Date, this
Letter of Transmittal (or facsimile thereof) together with the certificate(s)
representing the Old Debentures (or a confirmation of electronic delivery of
book-entry delivery into the Exchange Agent's account at DTC) and any of the
required documents will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) such properly completed and executed Letter of
Transmittal (or facsimile hereof), as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all tendered Old
Debentures in proper form for transfer (or a confirmation of electronic mail
delivery of book-entry delivery into the Exchange Agent's account at DTC), must
be received by the Exchange Agent within five business days after the Expiration
Date, all as provided in the Prospectus under the caption "Guaranteed Delivery
Procedures." Any Holder of Old Debentures who wishes to tender his Old
Debentures pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior
to 5:00 P.M., New York City time, on the Expiration Date.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Debentures to
be properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS ARE AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
10
<PAGE>
ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Debentures will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Old Debentures not properly tendered or any Old Debentures the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any irregularities or
conditions of tender as to particular Old Debentures. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Debentures must be cured within such time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person shall be under any
duty to give notification of defects or irregularities with respect to tenders
of Old Debentures, nor shall any of them incur any liability for failure to give
such notification. Tenders of Old Debentures will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any Old
Debentures received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned without cost by the Exchange Agent to the tendering Holders of Old
Debentures, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
2. PARTIAL TENDERS; WITHDRAWAL RIGHTS. Tenders of Old Debentures will be
accepted in all denominations of $1,000 and integral multiples in excess
thereof. If less than the entire principal amount of any Old Debentures is
tendered, the tendering Holder should fill in the principal amount tendered in
the third column of the chart entitled "Description of Old Debentures." The
entire principal amount of Old Debentures delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Old Debentures is not tendered, Old Debentures for the
principal amount of Old Debentures delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated. If the entire principal
amount of all Old Debentures is not tendered, Old Debentures for the principal
amount of Old Debentures not tendered and a certificate or certificates
representing New Debentures issued in exchange of any Old Debentures accepted
will be sent to the Holder at his or her registered address, unless a different
address is provided in the appropriate box on this Letter of Transmittal or
unless tender is made through DTC, promptly after the Old Debentures are
accepted for exchange.
Except as otherwise provided herein, tenders of Old Debentures may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Debentures to be
withdrawn, the aggregate principal amount of Old Debentures to be withdrawn, and
(if Certificates for Old Debentures have been tendered) the name of the
registered holder of the Old Debentures as set forth on the certificate for the
Old Debentures, if different from that of the person who tendered such Old
Debentures. If certificates for the Old Debentures have been delivered or
otherwise identified to the Exchange Agent, then prior to the physical release
of such certificates for the Old Debentures, the tendering holder must submit
the serial numbers shown on the particular certificates for the Old Debentures
to be withdrawn and the signature on the notice of withdrawal must be guaranteed
by an Eligible Institution, except in the case of Old Debentures tendered for
the account of an Eligible Institution. If Old Debentures have been tendered
pursuant to the procedures for book-entry transfer set forth in the Prospectus
under "The Exchange Offer--Procedures for Tendering," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old
11
<PAGE>
Debentures, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Debentures may not be rescinded. Old Debentures
properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering."
3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is
signed by the registered Holder(s) of the Old Debentures tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Debentures without alternation, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder(s) of Old Debentures tendered and the certificate(s) for New
Debentures issued in exchange therefor is to be issued (or any untendered
principal amount of Old Debentures is to be reissued) to the registered Holder,
such Holder need not and should not endorse any tendered Old Debenture, nor
provide a separate bond power. In any other case, such holder must either
properly endorse the Old Debentures tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder(s) of any Old Debentures listed, such Old
Debentures must be endorsed or accompanied by appropriate bond powers signed as
the name of the registered Holder(s) appears on the Old Debentures.
If this Letter of Transmittal (or facsimile hereof) or any Old Debentures or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Debentures or signatures on bond powers required by this
Instruction 3 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal (or facsimile hereof) must be
guaranteed by an Eligible Institution unless the Old Debentures tendered
pursuant thereto are tendered (i) by a registered Holder (including any
participant in DTC whose name appears on a security position listing as the
owner of Old Debentures) who has not completed the box set forth herein entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" or (ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should
indicate, in the applicable spaces, the name and address to which New Debentures
or substitute Old Debentures for principal amounts not tendered or not accepted
for exchange are to be issued or sent, if different from the name and address of
the person signing this Letter of Transmittal (or in the case of tender of the
Old Debentures through DTC, if different from DTC). In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
5. IRREGULARITIES. The Company will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Debentures, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance of which, or exchange for which, may, in the view
of counsel to the Company, be unlawful. The Company also reserves the absolute
right, subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer--General" or any
conditions or irregularity in any tender of Old Debentures of any particular
holder whether or not similar conditions or irregularities are waived in the
case of other holders. The Company's interpretation of the terms and conditions
of the
12
<PAGE>
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Debentures will be deemed to
have been validly made until all irregularities with respect to such tender have
been cured or waived. The Company, any affiliates or assigns of the Company, the
Exchange Agent, or any other person shall not be under any duty to give
notification of any irregularities in tenders or incur any liability for failure
to give such notification.
6. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
7. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under United States federal
income tax law, a holder whose tendered Old Debentures are accepted for exchange
is required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Old Debentures
exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Debentures or of the last transferee appearing on the transfers attached
to, or endorsed on, the Old Debentures. If the Old Debentures are registered in
more than one name or are not in the name of the actual owner, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional United States Federal income tax.
Rather, the United States federal income tax liability of a person subject to
backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
13
<PAGE>
8. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive or modify specified conditions in the Exchange Offer in the case of any
Old Debentures tendered.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD DEBENTURES. Any tendering Holder
whose Old Debentures have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instruction.
10. SECURITY TRANSFER TAXES. Holders who tender their Old Debentures for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Debentures are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the Old
Debentures tendered, or if a transfer tax is imposed for any reason other than
the exchange of Old Debentures in connection with the Exchange Offer, then the
amount of any such transfer tax (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<S> <C> <C>
CERTIFICATE SURRENDERED OLD DEBENTURES TENDERED OLD DEBENTURES ACCEPTED
DELIVERY PREPARED BY CHECKED BY DATE
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C> <C>
PAYER'S NAME:
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number
DATING BELOW OR
Employer Identification
Number
DEPARTMENT OF THE PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I PART 3--
TREASURY CERTIFY THAT:
INTERNAL REVENUE
SERVICE
(1) The number shown on this form is my correct Taxpayer Awaiting TIN
Identification Number (or I am waiting for a number to / /
be issued to me) and
(2) I am not subject to backup withholding either
PAYER'S REQUEST FOR because I have not been notified by the Internal Revenue
TAXPAYER Service ("IRS") that I am subject to backup
IDENTIFICATION NUMBER withholding as a result of failure to report all
("TIN") AND interest or dividends, or the IRS has notified me
CERTIFICATION that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) in Part 2 above
if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on your
tax return. However, if after being notified by the IRS that you were
subject to backup withholding you received another notification from
the IRS stating that you are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE DATE
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF NEW DEBENTURES PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number within 60 days, 20 percent of all reportable payments
made to me thereafter will be withheld until I provide a number.
Signature _____________________________ Date ____________________________
15
<PAGE>
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY HAND OR OVERNIGHT DELIVERY: Facsimile Transmissions: BY REGISTERED OR CERTIFIED
(Eligible Institutions MAIL:
Only)
The Bank of New York The Bank of New York
101 Barclay Street (212) 571-3080 101 Barclay Street, 7E
Corporate Trust Services Window New York, New York 10286
Ground Level To Confirm by Telephone Attention: Reorganization
Attention: Reorganization or for Information Call: Section,
Section, Arwen Gibbons
Arwen Gibbons (212) 815-6333
</TABLE>
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF ANY AND ALL OUTSTANDING
8 1/8% SENIOR DEBENTURES DUE 2009
OF
CABLEVISION SYSTEMS CORPORATION
As set forth in the Prospectus, dated November 3, 1997 (the "Prospectus"),
of Cablevision Systems Corporation (the "Company"), in the accompanying Letter
of Transmittal and instructions thereto (the "Letter of Transmittal"), this form
or one substantially equivalent hereto must be used to accept the Company's
exchange offer (the "Exchange Offer") to purchase all of its outstanding 8 1/8%
Senior Debentures due 2009 (the "Old Debentures") if (i) certificates
representing the Old Debentures to be tendered for purchase and payment are not
lost but are not immediately available, (ii) time will not permit the Letter of
Transmittal, certificates representing such Old Debentures or other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date. This form may be delivered by an Eligible Institution by mail or hand
delivery or transmitted, via telegram, telex or facsimile, to the Exchange Agent
as set forth below. This Notice of Guaranteed Delivery may be delivered by hand,
overnight courier or mail, or transmitted by facsimile transmission, to the
Exchange Agent. See "The Exchange Offer--Procedures for Tendering" in the
Prospectus. In addition, in order to utilize the guaranteed delivery procedure
to tender Old Debentures pursuant to the Exchange Offer, a completed, signed and
dated Letter of Transmittal relating to the Old Debentures (or facsimile
thereof) must also be received by the Exchange Agent prior to 5:00 P.M., New
York City time, on the Expiration Date. All capitalized terms used herein but
not defined herein shall have the meanings ascribed to them in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 4,
1997 UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD
DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY
PRIOR TO THE EXPIRATION DATE.
<TABLE>
<S> <C> <C>
The Exchange Agent:
THE BANK OF NEW YORK
BY REGISTERED OR FACSIMILE TRANSMISSIONS: BY HAND OR OVERNIGHT DELIVERY:
CERTIFIED MAIL: (ELIGIBLE INSTITUTIONS ONLY)
The Bank of New York (212) 571-3080 The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 CONFIRM BY TELEPHONE: Corporate Trust Services
Attn: Reorganization Section, (212) 815-6335 Window
Arwen Gibbons Ground Level
New York, New York 10286
FOR INFORMATION CALL: Attention: Reorganization
(212) 815-6333 Section,
Arwen Gibbons
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSIONS OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Exchange Offer and the Letter of Transmittal,
receipt of which is hereby acknowledged, the aggregate principal amount of Old
Debentures set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus.
The undersigned understands that tenders of Old Debentures will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. The
undersigned understands that tenders of Old Debentures pursuant to the Exchange
Offer may not be withdrawn after 5:00 P.M., New York City time on the Business
Day prior to the Expiration Date. Tenders of Old Debentures may also be
withdrawn if the Exchange Offer is terminated without any such Old Debentures
being purchased thereunder or as otherwise provided in the Prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
PLEASE SIGN AND COMPLETE
<TABLE>
<S> <C>
Signature(s) of Registered Owner(s) or Authorized Name(s) of Registered Holder(s):
Signatory:
Principal Amount of Old Debentures Tendered: Address:
Certificate No(s). of Old Debentures (if available): Area Code and Telephone No.:
If Old Debentures will be delivered by book-entry
transfer at The Depository Trust Company, insert,
Depository Account No.:
Date:
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Old Debentures exactly as its (their) name(s) appear on
certificates for Old Debentures or on a security position listing as the owner
of Old Debentures, or by person(s) authorized to become registered Holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
Please print name(s) and address(es)
Name(s): __________________________________________________________________
__________________________________________________________________
Capacity: _________________________________________________________________
Address(es): ______________________________________________________________
______________________________________________________________
DO NOT SEND OLD DEBENTURES WITH THIS FORM. DEBENTURES SHOULD BE SENT TO THE
EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old
Debentures tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Debentures to the Exchange Agent's account at
The Depository Trust Company, pursuant to the procedures for book-entry transfer
set forth in the Prospectus, in either case together with one or more properly
completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and
any other required documents within five business days after the date of
execution of this Notice of Guaranteed Delivery.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND OLD DEBENTURES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD
SET FORTH ABOVE AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE
UNDERSIGNED.
<TABLE>
<S> <C>
Name of Firm:
---------------------------------------------------
Authorized Signature
Address: Name:
- --------------------------------------------------- Title:
Area Code and Telephone No.: Date:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD DEBENTURES WITH THIS FORM. CERTIFICATES
FOR OLD DEBENTURES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
