<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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. / / ____
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
8 1/8% Series B Senior Debentures due
2009..................................... $400,000,000 100% $400,000,000 $121,213
</TABLE>
(1) Estimated for the sole purpose of computing the registration fee in
accordance with Rule 457(o).
------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION; DATED OCTOBER 16, 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 , 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 , 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 , 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 the
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.................................................................. 43
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 quarter
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 purpose of this Prospectus to the extent that a subsequent statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of any such person, a copy of any or all of the information incorporated
herein by reference other than exhibits to such information (unless such
exhibits are specifically incorporated by reference into such information). The
Company's principal executive
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>
<S> <C>
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 , 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
<PAGE>
<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
<PAGE>
<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."
</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 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
FINANCIAL RATIOS AND
OTHER DATA:
</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>
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 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
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Company will require significant additional financing, through debt and/or
equity issuances, to meet its 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
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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 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. Cable systems also
compete with the entities that make videotaped movies and programs available for
home rental. The 1992 Cable Act regulates the ownership by cable operators of
MMDS and SMATV. Under the
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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 was 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 ,
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 , 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-entered. 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 retendered 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 Department
101 Barclay Street, 21st Floor
New York, N.Y. 10286
Attention: Lucille Firrincieli
Facsimile Transmission: (212) 815-5915
Confirm by Telephone: (212) 815-5741
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 to 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
41
<PAGE>
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
42
<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 or 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
43
<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.
44
<PAGE>
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,
II-1
<PAGE>
if the Delaware General Corporation Law so requires, the payment of such
expenses incurred by a director or officer in advance of the final
disposition of a proceeding shall be made only upon receipt by the
corporation of an undertaking by or on behalf of such person to repay all
amounts so advanced if it shall ultimately be determined that such person is
not entitled to be indemnified by the corporation as authorized in this
Article or otherwise.
B. The right to indemnification and advancement of expenses conferred on
any person by this Article shall not limit the corporation from providing
any other indemnification permitted by law nor shall it be deemed exclusive
of any other right which any such person may have or hereafter acquire under
any statute, provision of the Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
C. The corporation may purchase and maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
The Company has entered into indemnification agreements with certain of its
officers and directors indemnifying such officers and directors from and against
certain expenses, liabilities or other matters referred to in or covered by
Section 145 of the Delaware General Corporation Law. The Company has also
entered into an agreement with Charles F. Dolan ("Mr. Dolan"), the Chairman of
the Company, pursuant to which Mr. Dolan has agreed to guarantee the Company's
obligation to indemnify its officers and directors to the fullest extent
permitted by Delaware law. In addition, subject to certain limitations, Mr.
Dolan has agreed to indemnify such officers and directors against any loss or
expense such person may incur in connection with any transaction involving Mr.
Dolan or entities affiliated with Mr. Dolan to the extent indemnification is not
provided by the Company. Any payment required to be made by Mr. Dolan pursuant
to such agreement will be reduced by any proceeds of insurance or reimbursement
under any other form of indemnification reimbursement available to such officer
or director. The Company maintains directors' and officers' liability insurance.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. The second paragraph of Article Ninth of the Company's Certificate of
Incorporation provides for such limitation of liability.
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<S> <C> <C>
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 (included on pages II-4 and II-5).
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.*
</TABLE>
- ------------------------
* To be filed by Amendment.
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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-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 16th day
of October, 1997.
CABLEVISION SYSTEMS CORPORATION
By: /s/ WILLIAM J. BELL
-----------------------------------------
Name: William J. Bell
Title: Vice Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William J. Bell, Robert S. Lemle and Barry J.
O'Leary, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
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 16, 1997.
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ JAMES L. DOLAN 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)
/s/ ANDREW B. ROSENGARD Senior Vice President and
- ------------------------------ Controller (Principal
Andrew B. Rosengard Accounting Officer)
/s/ CHARLES F. DOLAN Chairman of the Board of
- ------------------------------ Directors
Charles F. Dolan
/s/ MARC A. LUSTGARTEN Vice Chairman and Director
- ------------------------------
Marc A. Lustgarten
/s/ ROBERT P. MAY Chief Operating Officer and
- ------------------------------ Director
Robert P. May
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ ---------------------------
<S> <C>
/s/ ROBERT S. LEMLE Executive Vice President,
- ------------------------------ General Counsel,
Robert S. Lemle Secretary and Director
/s/ SHEILA A. MAHONY Senior Vice President and
- ------------------------------ Director
Sheila A. Mahony
/s/ JOHN TATTA Director and Chairman of
- ------------------------------ the Executive Committee
John Tatta
/s/ PATRICK F. DOLAN Director
- ------------------------------
Patrick F. Dolan
/s/ FRANCIS F. RANDOLPH, JR. Director
- ------------------------------
Francis F. Randolph, Jr.
/s/ DANIEL C. SWEENEY Director
- ------------------------------
Daniel C. Sweeney
/s/ CHARLES D. FERRIS Director
- ------------------------------
Charles D. Ferris
/s/ RICHARD H. HOCHMAN Director
- ------------------------------
Richard H. Hochman
/s/ VICTOR ORISTANO Director
- ------------------------------
Victor Oristano
/s/ VINCENT TESE Director
- ------------------------------
Vincent Tese
</TABLE>
II-5
<PAGE>
EXHIBIT 12.1
CABLEVISION SYSTEMS CORPORATION
COMPUTATION OF DEFICIENCY OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
<S> <C> <C> <C> <C> <C> <C> <C>
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
<CAPTION>
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Loss from continuing operations.............. $ (167,966) $ (160,476) $ (332,079) $ (317,458) $ (315,151) $ (246,782) $ (250,503)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
ADD:
Fixed charges per (B) below.................. 159,843 136,845 278,437 322,054 269,627 238,109 199,691
Amortization of previously capitalized
interest..................................... 0 0 0 0 0 0 0
DEDUCT
Interest capitalized during period........... 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings for computation purposes (A).......... $ (8,123) $ (23,631) $ (53,642) $ 4,596 $ (45,524) $ (8,673) $ (50,842)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges:
Interest on Indebtedness, expensed or
capitalized, including amortization of debt
expense.................................... 153,785 132,099 268,177 313,850 263,299 232,434 194,628
Portion of rents representative of the interest
factor....................................... 6,058 4,746 10,260 8,204 6,328 5,675 5,033
---------- ---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges for computation purposes (B)..... $ 159,843 $ 136,845 $ 278,437 $ 322,054 $ 269,627 $ 238,109 $ 199,661
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Deficiency of earnings available to cover fixed
charges...................................... $ (167,966) $ (160,476) $ (332,079) $ (317,458) $ (315,151) $ (246,782) $ (250,503)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
EXECUTION COPY
- --------------------------------------------------------------------------------
Exhibit 4.1
CABLEVISION SYSTEMS CORPORATION
8 1/8% Senior Debentures due 2009
--------------------------------
Registration Rights Agreement
--------------------------------
Dated: August 26, 1997
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated August 26, 1997, between
CABLEVISION SYSTEMS CORPORATION, a Delaware corporation (the "Company"), and
BEAR, STEARNS & CO. INC., MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED and MORGAN STANLEY & CO. INCORPORATED as the initial
purchasers (the "Initial Purchasers") of the Securities referred to below
pursuant to the Purchase Agreement dated August 21, 1997, between the Initial
Purchasers and the Company, in connection with the issuance of $300,000,000
aggregate principal amount of the Company's 81/8% Senior Debentures due 2009
(the "Securities") pursuant to the Indenture, dated as of August 15, 1997,
between the Company and The Bank of New York, trustee (the "Indenture").
In consideration of the foregoing, the parties hereto agree as
follows:
1. Certain Definitions.
As used in this Agreement, the following defined terms shall have the
following meanings:
"best efforts" with respect to the Company shall mean the Company's
best efforts except that such term shall mean reasonable best efforts in
the event and to the extent that the Company could satisfy the standard for
the issuance of a Suspension Notice pursuant to the third paragraph of
Section 5 hereof.
"Business Day" shall mean any day except (i) a Saturday, Sunday or
other day in The City of New York on which banks are required or authorized
to close or (ii) any other day on which the SEC is closed.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
<PAGE>
2
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement of the Company pursuant to the provisions of Section
2(a) hereof on Form S-4 (or, if applicable, on another appropriate form),
and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Securities" shall mean the 8 1/8% Series B Senior Debentures
due 2009 issued by the Company under the Indenture as Exchange Securities
(as defined therein), to be offered to Holders of Securities pursuant to
the Exchange Offer.
"Holder" shall mean, individually, each of the Initial Purchasers, for
so long as they own any Registrable Securities, and any of the Initial
Purchasers' successors, assigns and direct and indirect transferees who
become registered owners of Registrable Securities.
"Indenture" shall have the meaning set forth in the preamble.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
Purchase Agreement" shall mean the Purchase Agreement dated August 21,
1997 between the Company and the Initial Purchasers, providing for the
initial purchase and sale of the Securities.
"Registrable Securities" shall mean the Securities; provided, however,
that any such Securities shall cease to be Registrable Securities upon the
earlier to occur of the date on which (i) the Exchange Offer has been
consummated, (ii) a Registration Statement with respect to such Securities
shall have been declared effective under the Securities Act and such
Securities shall have been disposed of pursuant to such
<PAGE>
3
Registration Statement, provided, that Securities not disposed of pursuant
to an effective Shelf Registration Statement shall cease to be Registrable
Securities two years from the date such Shelf Registration Statement is
declared effective by the SEC, or such longer period as the Company's
obligation to keep such Shelf Registration Statement effective is extended
in accordance with Section 5 hereof, (iii) such Registrable Securities have
been sold to the public pursuant to Rule 144(k) (or any similar provision
then in force, but not Rule 144A) under the Securities Act, or (iv) such
Registrable Securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky
laws, (iii) all expenses of any Persons acting on behalf of the Company in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto and other documents reasonably relating to the
performance of and compliance with this Agreement by the Company, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the
Company and, in connection with a Shelf Registration Statement, the fees
and disbursements of one counsel for the Holders (which counsel shall be
selected by the Majority Holders and shall be reasonably acceptable to the
Company), and (vi) any fees and expenses of the independent public
accountants of the Company, including the expenses of any special audits or
"cold comfort" letters (in connection with a Shelf Registration) required
by or necessary to such performance and compliance, but excluding
underwriting discounts and commissions, fees and expenses and transfer
taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any Exchange Offer Registration
Statement or Shelf Registration Statement.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) hereof
which covers all of the Registrable Securities on an appropriate form under
Rule 4l5 under the Securities Act,
<PAGE>
4
or any similar rule that may be adopted by the SEC and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities and
the Exchange Securities under the Indenture.
"Underwritten Registration or Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to one or more
Underwriters (as hereinafter defined) for reoffering to the public.
2. Registration Under the Securities Act.
(a) Exchange Offer Registration. The Company shall, for the benefit
of the Holders of the Securities, file an Exchange Offer Registration Statement
with respect to Exchange Securities within 60 days after the Closing Time and
use its best efforts to cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act within 180 days after the Closing
Time. Upon such Exchange Offer Registration Statement becoming effective under
the Securities Act, the Company shall offer the Exchange Securities in return
for surrender of the Securities. The Exchange Offer shall remain open for not
less than 30 days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to Holders of the Securities. For the
Securities surrendered to the Company under the Exchange Offer, the Holder will
receive Exchange Securities having an aggregate principal amount equal to that
of the surrendered Securities. Interest on the Exchange Securities shall accrue
from the last maturity date of any interest installment on which interest was
paid on the Security so surrendered (or the Exchange Securities, as the case may
be or, if no interest has been paid on the Securities, from August 26, 1997).
The Company shall commence the Exchange Offer by mailing the related Exchange
Offer Prospectus and accompanying documents to each Holder stating, in addition
to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities validly
tendered will be accepted for exchange;
(ii) the date of acceptance for exchange (which shall be a Business
Day no earlier than 30 days nor later than 40 days (unless otherwise
required by applicable law) from the date such notice is mailed) (the
"Exchange Date");
(iii) that any Registrable Security not tendered will remain
outstanding and shall accrue interest at the initial rate borne by the
Securities and, other than Registrable Securities referred to in Section
2(b)(iii) below, will not retain any rights under this Registration Rights
Agreement;
<PAGE>
5
(iv) that Holders electing to have a Registrable Security exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Security, together with letters of transmittal, to the
institution and at the address (located in the Borough of Manhattan, City
of New York) specified in the notice prior to the close of business on the
Business Day immediately preceding the Exchange Date; and
(v) that Holders will be entitled to withdraw the election, not later
than the close of business on the Business Day immediately preceding the
Exchange Date, by sending to the institution and at the address (located in
the Borough of Manhattan, City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the number of shares of Registrable Securities delivered for
exchange, and a statement that such Holder is withdrawing its election to
have such Registrable Securities exchanged.
On the Exchange Date, the Company shall:
(i) accept for exchange Registrable Securities tendered and not
validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company, and issue and mail to each Holder or such Holder's nominee, for
the Registrable Securities so surrendered, new Exchange Securities having
an aggregate liquidation preference equal to that of the Registrable
Securities surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above, and in accordance with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. Consummation of the Exchange Offer shall not be subject to
any conditions, other than that the Exchange Offer does not, and consummation of
the Exchange Offer will not, violate applicable law or any applicable
interpretation of the staff of the SEC. The Company shall inform the Initial
Purchasers of the names and addresses of the Holders to whom the Exchange Offer
is made, and the Initial Purchasers shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
(b) Shelf Registration. In the event that (i) the Company determines
that the Exchange Offer Registration provided in Section 2(a) above is not
available or may not be consummated because it would violate applicable law or
the applicable interpretations of the SEC staff, (ii) the Exchange Offer is not
for any other reason consummated within 180 days after the Closing Time, or
(iii) following the consummation of the Exchange Offer a Registration Statement
must be filed and a Prospectus must be delivered by the Initial Purchasers in
connection with any offering or sale of Registrable Securities because such
Registrable Securities represent an unsold allotment of the Registrable
Securities purchased by the Initial Purchasers from the Company, unless the
Company has previously done so, the Company will (a) file as soon as practicable
after such determination or date, as the case may
<PAGE>
6
be, a Shelf Registration Statement providing for the sale by the Holders of all
of the Registrable Securities, (b) use its best efforts to have such Shelf
Registration Statement declared effective by the SEC and (c) keep the Shelf
Registration Statement continuously effective until the second anniversary of
the Closing Time or such shorter period which will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement. In the event the Company is
required to file a Shelf Registration Statement solely as a result of the
matters referred to in clause (iii) of the preceding sentence, the Company shall
file and have declared effective by the SEC both an Exchange Offer Registration
Statement pursuant to Section 2(a) with respect to all Registrable Securities
and a Shelf Registration Statement (which may be a combined Registration
Statement with the Exchange Offer Registration Statement) with respect to offers
and sales of Registrable Securities held by the Initial Purchasers after
completion of the Exchange Offer. The Company further agrees, if necessary, to
supplement or amend the Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the 1933 Act or by any other
rules and regulations thereunder for shelf registration, and the Company agrees
to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with any registration pursuant to Section 2(a) or 2(b) hereof.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume.
3. Participation of Broker-Dealers in Exchange Offer.
(a) The SEC staff has taken the position that any broker-dealer that
receives Exchange Securities for its own account in the Exchange Offer in
exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a "Participating Broker-Dealer") may
be deemed to be an "underwriter" within the meaning of the Securities Act and
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities.
The Company understands that it is the SEC staff's position that if
the Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating
<PAGE>
7
Broker-Dealers may resell the Exchange Securities, without naming the
Participating Broker-Dealers or specifying the amount of Exchange Securities
owned by them, such Prospectus may be delivered by Participating Broker-Dealers
and other Persons, if any, subject to similar prospectus delivery requirements
to satisfy their prospectus delivery obligation under the Securities Act in
connection with resales of Exchange Securities for their own accounts, so long
as the Prospectus otherwise meets the requirements of the Securities Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the SEC staff
recited in Section 3(a) above; provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 5(i), for a period exceeding 90 days
after the last Exchange Date (as such period may be extended pursuant to
the penultimate paragraph of Section 5 of this Agreement) and Participating
Broker-Dealers shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection with the
resales contemplated by this Section 3; and
(ii) the application of the Shelf Registration procedures set forth in
Section 5 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the SEC staff or the Securities Act
and the rules and regulations thereunder, will be in conformity with the
reasonable request to the Company by the Initial Purchasers or with the
reasonable request in writing to the Company by one or more broker-dealers
who certify to the Initial Purchasers and the Company in writing that they
anticipate that they will be Participating Broker-Dealers; and provided
further that, in connection with such application of the Shelf Registration
procedures set forth in Section 5 to an Exchange Offer Registration, the
Company shall be obligated (x) to deal only with one entity representing
the Participating Broker-Dealers, which shall be one of the Initial
Purchasers unless they collectively elect not to act as such
representative, (y) to pay the fees and expenses of only one counsel
representing the Participating Broker-Dealers, which shall be counsel to
the Initial Purchasers unless such counsel elects not to so act and (z) to
cause to be delivered only one, if any, "cold comfort" letter with respect
to the Prospectus in the form existing on the last Exchange Date and with
respect to each subsequent amendment or supplement, if any, effected during
the period specified in clause (i) above; provided, that the provisions of
clauses (y) and (z) of this Section 3(b)(ii) shall apply only if one or
more Participating Broker-Dealers holding at least $10,000,000 principal
amount of Registrable Securities shall request that the provisions of this
<PAGE>
8
Agreement as they relate to a Shelf Registration also apply to an Exchange
Offer Registration Statement for the disposition of Exchange Securities by
Participating Broker-Dealers.
4. Liquidated Damages.
In the event that, for any reason, either (i) the Exchange Offer
Registration Statement is not filed with the SEC on or prior to the 60th
calendar day following the Closing Time or (ii) the Exchange Offer is not
consummated or a Shelf Registration Statement is not declared effective on or
prior to the 180th calendar day following the Closing Time, the interest rate
borne by the Securities shall be increased by one-quarter of one percent per
annum for the first 30 days following such 60-day period in the case of (i)
above, or the first 90 days following such 180-day period in the case of (ii)
above. Such interest rate will increase by an additional one-quarter of one
percent per annum at the beginning of each subsequent 30-day period in the case
of (i) above, or 90-day period in the case of (ii) above, up to a maximum
aggregate increase of one percent per annum. Upon (x) the filing of the
Exchange Offer Registration Statement or (y) the consummation of the Exchange
Offer or the effectiveness of a Shelf Registration Statement, as the case may
be, the interest rate borne by the Securities will be reduced to the original
interest rate.
5. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statement pursuant to Sections 2(a) and 2(b) hereof, the Company
shall:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form (x) shall be selected
by the Company and (y) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution as the Company is so advised of
by the selling Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and include
(including through incorporation by reference) all financial statements
required by the SEC to be filed therewith, and the Company shall use its
best efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to such Registration Statement as may be necessary to keep such
Registration Statement in compliance with the Securities Act; and cause the
Prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities and to each underwriter of Registrable Securities,
if any, without charge, as many copies of the Prospectus, including each
preliminary
<PAGE>
9
prospectus, and any amendment or supplement thereto and such other
documents as such Holder or Underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable
Securities;
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions as any Holder of
Registrable Securities covered by such Shelf Registration Statement and or
any Underwriter shall reasonably request in writing by the time the
applicable Shelf Registration Statement is declared effective by the SEC,
and do any and all other acts and things which may be reasonably necessary
or advisable to enable such Holder or Underwriter to consummate the
disposition in each such designated jurisdiction, provided, however, that
the Company shall not be required to (i) qualify generally to do business
as a foreign corporation or as a broker-dealer in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(d), (ii)
consent to general service of process in any such jurisdiction or (iii)
subject itself to taxation in any such jurisdiction;
(e) in the case of a Shelf Registration, promptly notify each Holder
and, if requested by such Holder, confirm such advice in writing (i) when
such Shelf Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii) of
the issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of such Shelf Registration Statement or the
initiation of any proceedings for that purpose, (iii) if, between the
effective date of such Shelf Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, and (iv) of the happening of any event
during the period such Shelf Registration Statement is effective which
makes any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement promptly and
shall provide notice to each Holder of the withdrawal of any such order as
promptly as practicable;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of such
Shelf Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends;
<PAGE>
10
and enable such Registrable Securities to be in such denominations and
registered in such names as the selling Holders may reasonably request at
least two business days prior to the closing of any sale of Registrable
Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 5(e)(iv) hereof, use its best efforts to
prepare a supplement or post-effective amendment to such Shelf Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(j) in the case of a Shelf Registration Statement, enter into and
deliver all such customary agreements, documents and take such other
actions (including causing the delivery of opinions of counsel and
"comfort" letters of independent certified public accountants) as are
reasonably required to expedite or facilitate the disposition of
Registrable Securities;
(k) in the case of a Shelf Registration, upon reasonable notice make
available for inspection by a representative of the Holders of the
Registrable Securities, any Underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and any attorney or
accountant designated by the Selling Holders, at reasonable times and in a
reasonable manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by
any such representative, Underwriter, attorney or accountant in connection
with a Shelf Registration Statement; provided, however, that such
representatives, attorneys or accountants shall be acceptable to the
Company in its judgment reasonably exercised and shall agree to enter into
a written confidentiality agreement mutually acceptable to the Company and
the Underwriters regarding any records, information or documents that are
designated by the Company as confidential unless such records, information
or documents are available to the public or disclosure of such records,
information or documents is required by court or administrative order after
the exhaustion of appeals therefrom and to use such information obtained
pursuant to this provision only in connection with the transaction for
which such information was obtained, and not for any other purpose;
(1) in the case of a Shelf Registration, provide copies of any
Prospectus, any amendment to any applicable Shelf Registration Statement or
amendment or supplement to any Prospectus or any document which is to be
incorporated by reference into such Shelf Registration Statement or any
Prospectus after initial filing of such Shelf Registration Statement, a
reasonable time prior to the filing of any such Prospectus, amendment,
supplement or document, to the Initial Purchasers on behalf of the Holders
and Underwriters, if any, and except with respect to a Shelf
<PAGE>
11
Registration filed pursuant to Section 2(b)(iii) not file any such document
in a form to which the Initial Purchasers on behalf of the Holders or
Underwriters, if any, shall reasonably object; and make the representatives
of the Company as shall be reasonably requested by the Holders or the
Initial Purchasers on behalf of such Holders available for discussion of
such document; provided that the requirements of this paragraph shall not
apply to the Company's annual report on Form 10-K, its Quarterly Reports on
Form 10-Q, its current reports on Form 8-K or any other documents filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (the
"Exchange Act Documents"); and further provided that the Company shall
promptly notify Holders of the filing of any Exchange Act Documents except
for such Exchange Act Documents specifically related to the offering of
other securities and not to the Registrable Securities;
(m) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of any
Registration Statement; and
(n) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Debentures, cooperate with the Trustee and the Holders to effect
such changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and execute, and use its
best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required
to be filed with the SEC to enable the Indenture to be so qualified in a
timely manner.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in a Shelf Registration) require each
Holder to furnish to the Company information regarding the Holder and the
proposed distribution by such Holder of any Registrable Securities as the
Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any (i) notice from the Company of the happening of any
event of the kind described in Section 5(e)(ii) or (iv) hereof, (ii) notice from
the Company that it is in possession of material information that has not been
disclosed to the public and the Company reasonably deems it to be advisable not
to disclose such information in a registration statement or (iii) notice from
the Company that it is in the process of a registered offering of securities and
the Company reasonably deems it to be advisable to temporarily discontinue
disposition of Registrable Securities pursuant to the Shelf Registration
Statement (in each case, such notice being hereinafter referred to as a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to any Shelf Registration Statement and shall
not be entitled to the benefits provided under Section 6 hereof with respect to
any sales made by it in contravention of this paragraph, until such Holder's
receipt
<PAGE>
12
of the copies of the supplemented or amended Prospectus contemplated by Section
5(i) or a notice in accordance with Section 5(f) hereof that any order
suspending the effectiveness of the Shelf Registration Statement has been
withdrawn, or, in the case of (ii) or (iii) above, until further notice from the
Company that disposition of Registrable Securities may resume, provided that
(except with respect to a Shelf Registration filed pursuant to Section
2(b)(iii)) such further notice will be given within 90 days of the Suspension
Notice in the case of (ii) above and within 120 days of the Suspension Notice in
the case of (iii) above, and provided further that in the case of (ii) and (iii)
above that any Suspension Notice must be based upon a good faith determination
of the Board of Directors of the Company or the Executive Committee thereof that
such Notice is necessary; and, if so directed by the Company, such Holder will
deliver to the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. If the Company shall give any such notice to suspend
the disposition of Registrable Securities pursuant to any Shelf Registration
Statement, the Company shall extend the period during which such Shelf
Registration Statement shall be maintained effective pursuant to this Agreement
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 the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions or received notice that any order suspending dispositions of
the Securities has been withdrawn.
Each Holder will furnish to the Company such information regarding
such Holder and the distribution of such Registrable Securities as the Company
may from time to time reasonably request in writing, but only to the extent that
such information is required in order to comply with the Securities Act or any
relevant state securities or Blue Sky law or obligation. Each Holder of
Registrable Securities as to which any registration is being effected agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
happening of any event, in either case as a result of which any Prospectus
relating to such registration contains an untrue statement of a material fact
regarding such Holder or the distribution of such Registrable Securities or
omits to state any material fact regarding such Holder or the distribution of
such Registrable Securities required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and to furnish to the Company promptly any additional
information required to correct and update any previously furnished information
or required such that such prospectus shall not contain, with respect to such
holder or the distribution of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
6. Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless each Holder and
each Person, if any, who controls any Holder within the meaning of Section 15 of
the Securities Act as follows:
<PAGE>
13
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including fees and disbursements of counsel chosen by any Holder),
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, claim,
damage, liability or expense to the extent it arises out of an untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any Holder
expressly for use in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
The foregoing indemnity with respect to any untrue statement contained
in or any omission from a preliminary prospectus shall not inure to the benefit
of any Holder (or any Person controlling such Holder) from whom the Person
asserting any such loss, liability, claim, damage or expense purchased any of
the Securities that are the subject thereof if the Company shall sustain the
burden of proving that such Person was not sent or given a copy of the
Prospectus (or the Prospectus as amended or supplemented) (in each case
exclusive of the documents from which information is incorporated by reference)
at or prior to the written confirmation of the sale of such Securities to such
Person and the untrue statement contained in or the omission from such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
<PAGE>
14
(b) Each Holder severally agrees to indemnify and hold harmless the
Company, its directors, officers and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in Section 6(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly for use in the
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
under this indemnity agreement. An indemnifying party may participate at its
own expense in the defense of such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction, arising out of
the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 6 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Holders shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the Company and
one or more of the Holders; provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holders, such parties shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect (i) the relative
benefits received by the Company on the one hand and the Holders on the other
hand, from the offering of the Exchange Securities or Registrable Securities
included in such offering, and (ii) the relative fault of the Company on the one
hand and the Holders on the other, with respect to the statements or omissions
which resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations. The
Company and the Holders of the Registrable Securities agree that it would not be
just and equitable if contribution pursuant to this Section 6 were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the relevant equitable considerations. For purposes
of this Section 6, each Person, if any, who controls a Holder within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as such Holder, and each director of the Company,
<PAGE>
15
each officer of the Company who signed the Registration Statement, and each
Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Company.
7. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell such
Registrable Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
(the "Underwriters") that will administer the offering will be selected by the
Majority Holders of the Registrable Securities included in such offering;
provided that such Underwriters must be reasonably acceptable to the Company and
of a reputation comparable to that of the Initial Purchasers.
8. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into nor
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority of the issued and outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or departure;
provided, however, no amendment, modification or supplement, waiver or consent
with respect to the provisions of Section 6 hereof shall be effective as against
any Holder of Registrable Securities unless consented to in writing by such
Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 8(c); (ii) if to the Company, initially at One Media Crossways,
Woodbury, New York 11797, Attention: General Counsel, and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 8(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to any courier guaranteeing overnight
delivery.
<PAGE>
16
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at The Bank
of New York, Corporate Trust Department, 101 Barclay Street, 21st Floor, New
York, New York 10286, Attention: Lucille Firrincieli.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(e) Enforcement by Initial Purchasers. The Initial Purchasers shall
have the right to directly enforce the agreements made hereunder between the
Company, on the one hand, and the Holders, on the other hand, to the extent they
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder, provided, however, that such right of direct
enforcement shall terminate upon consummation of an Exchange Offer.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
<PAGE>
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CABLEVISION SYSTEMS CORPORATION
By:___________________________________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
BEAR, STEARNS & CO. INC.
By_________________________________
Name:
Title:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By__________________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By__________________________________
Name:
Title:
<PAGE>
Exhibit 4.2
EXECUTION COPY
- --------------------------------------------------------------------------------
CABLEVISION SYSTEMS CORPORATION,
Issuer,
to
THE BANK OF NEW YORK,
Trustee
-----------------------
Indenture
Dated as of August 15, 1997
-----------------------
$400,000,000
8 1/8% Senior Debentures due 2009
8 1/8% Series B Senior Debentures due 2009
- --------------------------------------------------------------------------------
<PAGE>
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of August 15, 1997
Trust Indenture
Act Section Indenture Section
Section 310(a)(1) .................................... 608
(a)(2) .................................... 608
(b) .................................... 607, 609
Section 311(a) .................................... 612
(b) .................................... 612
Section 312(a) .................................... 607
(b) .................................... 607
(c) .................................... 701
Section 313 .................................... 702
Section 314(a) .................................... 703
(a)(4) .................................... 1013
(c)(1) .................................... 103
(c)(2) .................................... 103
(e) .................................... 103
Section 315(b) .................................... 601
Section 316(a)(last
sentence) .................................... 101 ("Outstanding")
(a)(1)(A) .................................... 502, 512
(a)(1)(B) .................................... 513
(b) .................................... 508
(c) .................................... 105(d)
Section 317(a)(1) .................................... 503
(a)(2) .................................... 504
(b) .................................... 1003
Section 318(a) .................................... 108
- --------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
<PAGE>
TABLE OF CONTENT
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions................................... 1
Acquired Indebtedness............................... 2
Affiliate........................................... 2
Agent Members....................................... 2
Annualized Operating Cash Flow...................... 2
Average Life........................................ 2
Bank Credit Agreement............................... 2
Banks............................................... 3
Board of Directors.................................. 3
Board Resolution.................................... 3
Book-Entry Security................................. 3
Business Day........................................ 3
Capital Stock....................................... 3
Capitalized Lease Obligation........................ 3
Cash Flow Ratio..................................... 3
CNYC Agreement...................................... 3
Commission.......................................... 4
Common Stock........................................ 4
Company............................................. 4
Company Request or Company Order.................... 4
Consolidated Net Tangible Assets.................... 4
Corporate Trust Office.............................. 4
corporation......................................... 4
Cumulative Cash Flow Credit......................... 4
Cumulative Interest Expense......................... 5
Debt................................................ 5
Default............................................. 6
Depository.......................................... 6
Disqualified Stock.................................. 6
Event of Default.................................... 6
Exchange Act........................................ 6
Exchange Offer...................................... 6
Exchange Offer Registration Statement............... 6
Exchange Securities................................. 6
- ---------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
ii Page
generally accepted accounting principles............ 6
Global Security..................................... 7
guarantee........................................... 7
Holder.............................................. 7
Indebtedness........................................ 7
Indenture........................................... 7
Initial Purchasers.................................. 8
Initial Securities.................................. 8
Interest Payment Date............................... 8
Interest Swap Obligations........................... 8
Investment.......................................... 8
Lease............................................... 8
Letter of Credit.................................... 8
Lien................................................ 8
Mandatorily Redeemable Preferred Stock.............. 9
Maturity............................................ 9
Officers' Certificate............................... 9
Operating Cash Flow................................. 9
Opinion of Counsel.................................. 9
Outstanding......................................... 10
Paying Agent........................................ 10
Permitted Liens..................................... 10
Person.............................................. 13
Physical Security................................... 13
Predecessor Security................................ 13
Preferred Stock..................................... 13
Qualified Institutional Buyer or QIB................ 13
Receivables and Related Assets...................... 13
Refinancing Indebtedness............................ 13
Registered Securities............................... 14
Registration Rights Agreement....................... 14
Regular Record Date................................. 14
Regulation S Global Security........................ 14
Responsible Officer................................. 14
Restricted Payment.................................. 14
Restricted Security................................. 15
Restricted Subsidiary............................... 15
Rule 144A Global Security........................... 16
Securities Act...................................... 16
Securities Issue Date............................... 16
Securitization Subsidiary........................... 16
Security" and "Securities........................... 16
Security Register and Security Registrar............ 16
Senior Indebtedness................................. 16
<PAGE>
iii Page
Shelf Registration Statement............................... 17
Special Record Date........................................ 17
Stated Maturity............................................ 17
Stock Payment.............................................. 17
subsidiary................................................. 17
Subsidiary................................................. 17
Trust Indenture Act........................................ 17
Trustee.................................................... 17
Unrestricted Subsidiary.................................... 18
Voting Stock............................................... 18
Section 102. Other Definitions.................................... 18
Section 103. Compliance Certificates and Opinions................. 18
Section 104. Form of Documents Delivered to Trustee............... 19
Section 105. Acts of Holders...................................... 20
Section 106. Notices, Etc. to Trustee and Company................. 21
Section 107. Notice to Holders; Waiver............................ 21
Section 108. Conflict of Any Provision of Indenture with Trust
Indenture Act....................................... 22
Section 109. Effect of Headings and Table of Contents............. 22
Section 110. Successors and Assigns............................... 22
Section 111. Separability Clause.................................. 22
Section 112. Benefits of Indenture................................ 22
Section 113. Governing Law........................................ 23
Section 114. Legal Holidays....................................... 23
Section 115. No Recourse Against Others........................... 23
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally; Incorporation of Form in Indenture.. 23
Section 202. Form of Face of Security............................. 24
Section 203. Form of Reverse of Security.......................... 26
Section 204. Form of Trustee's Certificate of Authentication...... 30
Section 205. Form of Legend on Restricted Securities.............. 31
Section 206. Form of Legend for Book-Entry Securities............. 32
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms...................................... 33
Section 302. Denominations........................................ 33
Section 303. Execution, Authentication, Delivery and Dating....... 34
Section 304. Temporary Securities................................. 35
<PAGE>
iv Page
Section 305. Registration, Registration of Transfer and Exchange..... 36
Section 306. Mutilated, Destroyed, Lost and Stolen Securities........ 37
Section 307. Payment of Interest; Interest Rights Preserved.......... 38
Section 308. Persons Deemed Owners................................... 39
Section 309. Cancellation............................................ 39
Section 310. Computation of Interest................................. 40
Section 311. Registration Rights of Holders of Initial Securities.... 40
Section 312. CUSIP Numbers........................................... 40
Section 313. Book-Entry Provisions for Global Securities............. 40
Section 314. Special Transfer Provisions............................. 42
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture................. 45
Section 402. Application of Trust Money.............................. 46
ARTICLE FIVE
REMEDIES
Section 501. Events of Default....................................... 46
Section 502. Acceleration of Maturity; Rescission.................... 48
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................ 49
Section 504. Trustee May File Proofs of Claim........................ 50
Section 505. Trustee May Enforce Claims Without Possession of
Securities............................................. 51
Section 506. Application of Money Collected.......................... 51
Section 507. Limitation on Suits..................................... 51
Section 508. Unconditional Right of Holders to Receive Principal
and Interest........................................... 52
Section 509. Restoration of Rights and Remedies...................... 52
Section 510. Rights and Remedies Cumulative.......................... 53
Section 511. Delay or Omission Not Waiver............................ 53
Section 512. Control by Holders...................................... 53
Section 513. Waiver of Past Defaults................................. 53
Section 514. Undertaking for Costs................................... 54
Section 515. Waiver of Stay, Extension or Usury Laws................. 54
<PAGE>
v Page
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.......................................... 55
Section 602. Certain Rights of Trustee................................... 55
Section 603. Not Responsible for Recitals or Issuance of Securities...... 56
Section 604. May Hold Securities......................................... 57
Section 605. Money Held in Trust......................................... 57
Section 606. Compensation and Reimbursement.............................. 57
Section 607. Conflicting Interests....................................... 58
Section 608. Corporate Trustee Required; Eligibility..................... 58
Section 609. Resignation and Removal; Appointment of Successor........... 58
Section 610. Acceptance of Appointment by Successor...................... 60
Section 611. Merger, Conversion, Consolidation or Succession to
Business................................................... 60
Section 612. Preferential Collection of Claims Against Company........... 61
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Disclosure of Names and Addresses of Holders................ 61
Section 702. Reports by Trustee.......................................... 61
Section 703. Reports by Company.......................................... 61
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms........ 62
Section 802. Successor Substituted....................................... 63
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.......... 63
Section 902. Supplemental Indentures with Consent of Holders............. 64
Section 903. Execution of Supplemental Indentures........................ 65
Section 904. Effect of Supplemental Indentures........................... 65
Section 905. Conformity with Trust Indenture Act......................... 65
Section 906. Reference in Securities to Supplemental Indentures.......... 66
ARTICLE TEN
<PAGE>
vi Page
COVENANTS
Section 1001. Payment of Principal and Interest............................ 66
Section 1002. Maintenance of Office or Agency.............................. 66
Section 1003. Money for Security Payments to Be Held in Trust.............. 67
Section 1004. Corporate Existence.......................................... 68
Section 1005. Payment of Taxes and Other Claims............................ 68
Section 1006. Maintenance of Properties.................................... 68
Section 1007. Limitation on Indebtedness................................... 69
Section 1008. Limitation on Liens.......................................... 69
Section 1009. Limitation on Restricted Payments............................ 69
Section 1010. Limitation on Investments in Unrestricted Subsidiaries and
Affiliates........................................................... 71
Section 1011. Transactions with Affiliates................................. 71
Section 1012. Provision of Financial Statements............................ 71
Section 1013. Statement as to Compliance................................... 72
Section 1014. Waiver of Certain Covenants.................................. 72
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. No Right of Redemption....................................... 73
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
Section 1201. Option to Effect Defeasance or Covenant Defeasance........... 73
Section 1202. Defeasance and Discharge..................................... 73
Section 1203. Covenant Defeasance.......................................... 74
Section 1204. Conditions to Defeasance or Covenant Defeasance.............. 74
Section 1205. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions............................. 76
Section 1206. Reinstatement................................................ 77
TESTIMONIUM................................................................. 73
SIGNATURES AND SEALS........................................................ 73
ACKNOWLEDGMENTS............................................................. 73
<PAGE>
vii Page
EXHIBIT A List of Restricted Subsidiaries
EXHIBIT B Form of Registration Rights Agreement
<PAGE>
INDENTURE dated as of August 15, 1997 between Cablevision Systems
Corporation, a Delaware corporation (hereinafter called the "Company"), and
The Bank of New York, a state banking corporation duly incorporated and
existing under the laws of the State of New York, trustee (hereinafter called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
8 1/8% Senior Debentures due 2009 (hereinafter called the "Initial
Securities") and its 8 1/8% Series B Senior Debentures due 2009 (the "Exchange
Securities," and together with the Initial Securities, the "Securities"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture;
Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Exchange Offer Registration Statement (as defined
herein) or, under certain circumstances, the effectiveness of the Shelf
Registration Statement (as defined herein), this Indenture will be subject
to, and shall be governed by, the provisions of the Trust Indenture Act that
are required to be part of this Indenture and shall to the extent applicable
be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE>
2
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles and except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States as of the date
hereof; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing
at the time such Person is merged with or into the Company or a Subsidiary or
becomes a Subsidiary 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.
"Agent Members" shall have the meaning set forth in Section 313.
"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.
"Bank Credit Agreement" means the Fifth Amended and Restated Credit
Agreement, dated as of September 5, 1996, among the Company, the Restricted
Subsidiaries party thereto, the Banks party thereto, Toronto Dominion
(Texas), Inc. as agent for the Banks, and Bank of Montreal, Chicago Branch,
The Bank of New York, The Bank of Nova Scotia, The Canadian Imperial Bank of
Commerce and NationsBank of Texas, N.A., as co-agents for the Banks, as in
effect on the date hereof and as such agreement may be amended or replaced
from time to time.
<PAGE>
3
"Banks" means the lenders from time to time who are parties to the
Bank Credit Agreement.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Book-Entry Security" means a Security represented by a Global
Security and registered in the name of the nominee of the Depository.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New
York are authorized or obligated by law, regulation or executive order to
close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of such Person's capital stock whether now Outstanding or issued after the
date of this Indenture, including, without limitation, all Common Stock,
Preferred Stock and Disqualified Stock.
"Capitalized Lease Obligation" means any obligation of a Person to
pay rent or other amounts under a lease with respect to any property (whether
real, personal or mixed) acquired or leased by such Person and used in its
business that is required to be accounted for as a liability on the balance
sheet of such Person in accordance with generally accepted accounting
principles and the amount of such Capitalized Lease Obligation shall be the
amount so required to be accounted for as a liability.
"Cash Flow Ratio" means, as at any date, the ratio of (i) the sum of
the aggregate outstanding principal amount of all Indebtedness of the Company
and the 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.
"CNYC Agreement" means the Purchase and Reorganization 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.
<PAGE>
4
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all
shares, interests and participations (however designated and whether voting
or non-voting) in such Person's common equity, whether now Outstanding or
issued after the date of this Indenture, and includes, without limitation,
all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person. To the extent necessary to
comply with the requirements of the provisions of Trust Indenture Act
Sections 310 through 317 as they are applicable to the Company, the term
"Company" shall include any other obligor with respect to the Securities for
the purposes of complying with such provisions.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company (i) by its Chairman, a Vice Chairman,
its President or a Vice President and (ii) by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the
Trustee; provided, however, that such written request or order may be signed
by any two of the officers or directors listed in clause (i) above in lieu of
being signed by one of such officers or directors listed in such clause (i)
and one of the officers listed in clause (ii) above.
"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 generally accepted accounting principles, less (b) the amount thereof
constituting goodwill and other intangible assets as calculated in accordance
with generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at 101 Barclay Street, 21st Floor, New York, New York 10286.
"corporation" includes corporations, associations, partnerships,
limited liability companies, companies and business trusts.
"Cumulative Cash Flow Credit" means the sum of
<PAGE>
5
(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, whose good faith determination shall be conclusive) at the date
of receipt by the Company.
"Cumulative Interest Expense" means, for the period commencing on
July 1, 1988 and ending on the last day of the most recent month preceding
the proposed Restricted Payment for which financial information is available,
the aggregate of the interest expense of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in
accordance with generally accepted accounting principles, including interest
expense attributable to Capitalized Lease Obligations.
"Debt" with respect to any Person means, without duplication, any
liability, whether or not contingent, (i) in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereto), but excluding
reimbursement obligations under any surety bond, (ii) representing the
balance deferred and unpaid of the purchase price of any property (including
pursuant to Capitalized Lease Obligations), except any such balance that
constitutes a trade payable, (iii) under Interest Swap Agreements (as defined
in the Bank Credit Agreement) entered into pursuant to the Bank Credit
Agreement, (iv) under any other agreement related to the fixing of interest
rates on any Indebtedness, such as an interest swap, cap or collar agreement
(if and to the extent any of the foregoing liabilities would appear as a
liability upon a balance sheet of such Person prepared on a consolidated
basis in accordance with generally accepted accounting principles) or (v)
guarantees of items of other Persons which would be included within this
definition for such other Persons (whether or not the guarantee would appear
on such balance sheet). "Debt" does not include (i) Disqualified Stock, (ii)
any liability for
<PAGE>
6
federal, state 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).
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Book-Entry Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a
clearing agency registered under the Exchange Act.
"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
Securities.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer by the Company to the Holders of
the Initial Securities to exchange all of the Initial Securities for Exchange
Securities, as provided for in the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that (i) such
Exchange Securities shall not contain terms with respect to transfer
restrictions and shall be registered under the Securities Act, and (ii)
certain provisions relating to an increase in the stated rate of interest
thereon shall be eliminated) that are issued and exchanged for the Initial
Securities in accordance with the Exchange Offer, as provided for in the
Registration Rights Agreement and this Indenture.
"generally accepted accounting principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied,
which are in effect as of the date hereof.
<PAGE>
7
"Global Security" means one or more Securities evidencing all or a
part of the Securities to be issued as Book-Entry Securities, issued to the
Depository in accordance with Section 303 and bearing the legend prescribed
in Section 206 and, in the case of a Restricted Security, the legend
prescribed in Section 205.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation or (ii) an agreement, direct or indirect,
contingent or otherwise, providing assurance of the payment or performance
(or payment of damages in the event of non-performance) of any part or all of
such obligation, including, without limiting the foregoing, the payment of
amounts drawn down by letters of credit. Notwithstanding anything herein to
the contrary, a guarantee shall not include any agreement solely because such
agreement creates a Lien on the assets of any Person. The amount of a
guarantee shall be deemed to be the maximum amount of the obligation
guaranteed for which the guarantor could be held liable under such guarantee.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"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", as defined in and pursuant to the CNYC
Agreement, payable by a Subsidiary and guaranteed by the Company as a result
of the acquisition of Cablevision of NYC, shall not be deemed to be
"Indebtedness" so long as the Company and such Subsidiary are permitted to
make such payment in one or more classes of the Company's Capital Stock
(other than Disqualified Stock) pursuant to the terms of the CNYC Agreement
and the Company and the Restricted Subsidiaries are prohibited from making
such payment in cash, debt securities, Disqualified Stock or any combination
thereof pursuant to the terms of any mortgage, indenture, credit agreement or
other instrument that secures or evidences Indebtedness for money borrowed or
guaranteed by the Company or a Restricted Subsidiary in an aggregate amount
of $10,000,000 or more; provided that, for purposes of the definition of
"Indebtedness" (including the term "Debt" to the extent incorporated in such
definition) and for purposes of the definition of Event of Default, the term
"guarantee" shall not be interpreted to extend to a guarantee under which
recourse is limited to the Capital Stock of an entity that is not a
Restricted Subsidiary.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
<PAGE>
8
"Initial Purchasers" means Bear, Stearns & Co. Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated.
"Initial Securities" has the meaning specified in the recitals to
this Indenture.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Interest Swap Obligations" means, with respect to any Person, the
obligations of such Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic
payments made by such Person calculated by applying a fixed or a floating
rate of interest on the same notional amount.
"Investment" means any advance, loan, account receivable (other than
an account receivable arising in the ordinary course of business) or other
extension of credit (excluding, however, accrued and unpaid interest in
respect of any advance, loan or other extension of credit) or any capital
contribution to (by means of transfers of property to others, or payments for
property or services for the account or use of others, or otherwise), any
purchase or ownership of any stocks, bonds, notes, debentures or other
securities (including, without limitation, any interests in any partnership,
joint venture or joint adventure) of, or any bank accounts with or guarantee
of any Indebtedness or other obligations of, any Unrestricted Subsidiary or
Affiliate that is not a Subsidiary; provided that (i) the term "Investment"
shall not include any transaction that would otherwise constitute an
Investment of the Company or a Subsidiary to the extent that the
consideration provided by the Company or such Subsidiary in connection
therewith shall consist of 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.
"Lease" means any capital lease, operating lease, equipment lease,
real property lease or other lease.
"Letter of Credit" means any letter of credit executed by a bank in
favor of the Company as beneficiary.
"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
<PAGE>
9
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.
"Maturity" when used with respect to any Security means the date on
which the principal of and interest on such Security becomes due and payable
as therein or herein provided whether at the Stated Maturity, by declaration
of acceleration or otherwise.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the President, a Vice President or the Treasurer
of the Company and (ii) the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee; provided, however, that such
certificate may be signed by two of the officers or directors listed in
clause (i) above in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in clause (ii) above.
"Operating Cash Flow" means, for any period, the sum of the
following for the Company and the Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with generally accepted
accounting principles (except for the amortization of deferred installation
income which shall be excluded from the calculation of Operating Cash Flow
for all purposes of this Indenture): (i) aggregate operating revenues minus
(ii) aggregate operating expenses (including technical, programming, sales,
selling, general and administrative expenses and salaries and other
compensation, net of amounts allocated to Affiliates, paid to any general
partner, director, officer or employee of the Company or any Restricted
Subsidiary, but excluding interest, depreciation and amortization and the
amount of non-cash compensation in respect of the Company's employee
incentive stock programs for such period (not to exceed in the aggregate for
any calendar year 7% of the Operating Cash Flow for the previous calendar
year) and, to the extent otherwise included in operating expenses, any losses
resulting from a writeoff or writedown of Investments by the Company or any
Restricted Subsidiary in Affiliates). For purposes of determining Operating
Cash Flow, there shall be excluded all management fees until actually paid to
the Company or any Restricted Subsidiary in cash.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
<PAGE>
10
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or purchase
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities;
(c) Securities, except to the extent provided in Sections 1202 and
1203, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Twelve; and
(d) Securities paid pursuant to Section 306, Securities in exchange
for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands the Securities are valid obligations of the Company;
provided, however, that, in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
direction, consent or waiver hereunder, Securities owned by the Company or
any other obligor upon the Securities, or any Affiliate of the Company, or
such other obligor, shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, direction, consent or waiver, only Securities
which the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Permitted Liens" means the following types of Liens:
(a) Liens existing on the date of this Indenture;
<PAGE>
11
(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 securing
Indebtedness under the Bank Credit Agreement or any renewal or replacement
of the Bank Credit Agreement;
(e) Liens granted in favor of the Company or any Restricted
Subsidiary;
(f) Liens securing the Securities;
(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
<PAGE>
12
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;
(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 Capitalized Lease Obligations) upon any fixed or
capital assets acquired after the date of this 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
<PAGE>
13
(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.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Physical Security" shall have the meaning set forth in Section 303.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for a mutilated security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of such Person's preferred or preference stock, whether now Outstanding or
issued after the date of this Indenture, and includes, without limitation,
all classes and series of preferred or preference stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"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
Securities, so long as any such new Indebtedness (i) is made subordinate to
the Securities 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
<PAGE>
14
refinanced or (B) any date of redemption at the option of the holder of the
Indebtedness being refinanced.
"Registered Securities" means Securities issued or sold in a
transaction pursuant to an effective registration statement under the
Securities Act of 1933, as amended, as contemplated in the Registration
Rights Agreement, and any Exchange Security subsequently issued in exchange
for or upon transfer of any such Security.
"Registration Rights Agreement" means the Registration Rights
Agreement dated August 26, 1997 among the Company and the Initial Purchasers,
a form of which Registration Rights Agreement is attached hereto as Exhibit C.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the January 31 or July 31 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Regulation S Global Security" shall have the meaning set forth in
Section 303.
"Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant secretary, any assistant treasurer, any
trust officer or assistant trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers or assigned by the Trustee to administer corporate
trust matters at its Corporate Trust Office and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payment" means
(a) any Stock Payment by the Company or a Restricted Subsidiary;
(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 Securities; 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,
purchase, defease or 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
Securities shall not be a Restricted Payment if either (i) after giving
effect thereto, the ratio of the Senior Indebtedness of
<PAGE>
15
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 Securities.
Notwithstanding the foregoing, Restricted Payments shall not include (x)
payments by any Restricted Subsidiary to the Company or any other Restricted
Subsidiary or (y) any Investment or designation of a Restricted Subsidiary as
an Unrestricted Subsidiary permitted under Section 1010.
"Restricted Security" shall have the meaning set forth in Section 205.
"Restricted Subsidiary" means any Subsidiary, whether existing on
the date hereof or created subsequent hereto, designated from time to time by
the Company as a "Restricted Subsidiary" and the initial Restricted
Subsidiaries designated by the Company are set forth on Exhibit A; 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
<PAGE>
16
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 Section 1010.
"Rule 144A Global Security" shall have the meaning set forth in
Section 303.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Issue Date" means August 26, 1997 with respect to the
Initial Securities and the date of original issuance of the Exchange
Securities with respect to the Exchange Securities.
"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.
"Security" and "Securities" have the meaning set forth in the second
paragraph of this Indenture, such terms to include both the Initial
Securities and the Exchange Securities.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means, with respect to any Person, all
principal of 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 Securities,
(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
<PAGE>
17
Subsidiary 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.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee for the
payment of any Defaulted Interest pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"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 or retirement 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.
"subsidiary" means, as to a particular parent entity at any time,
any entity of which more than 50% of the Outstanding Voting Stock or other
equity interest entitled ordinarily to vote in the election of the directors
or other governing body (however designated) of such entity is at the time
beneficially owned or controlled directly or indirectly by such parent
corporation, by one or more such entities or by such parent corporation and
one or more such entities.
"Subsidiary" means any subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and as in force at the date as of which this instrument was
executed, except as provided in Section 905; provided, however, that, in the
event that the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
<PAGE>
18
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" means any Capital Stock having voting power under
ordinary circumstances to vote in the election of a majority of the directors
of a corporation (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
Section 102. Other Definitions.
Term Defined
in Section
"Act"......................................................... 105
"Bankruptcy Law".............................................. 501
"covenant defeasance"......................................... 1203
"Custodian"................................................... 501
"defeasance".................................................. 1202
"Defaulted Interest".......................................... 307
"incorporated provision"...................................... 108
"redesignation of a Restricted Subsidiary".................... 1010
"Restricted Security"......................................... 205
"Security Register"........................................... 305
"Security Registrar".......................................... 305
"successor"................................................... 801
"U.S. Government Obligations"................................. 1204
Section 103. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have been complied with, except that, in the case of any such application or
request as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
<PAGE>
19
Every certificate or opinion (other than the certificates required
by Section 1013) with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
<PAGE>
20
Section 105. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Trust Indenture Act Section
315) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 105.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so.
Notwithstanding Trust Indenture Act Section 316(c), any such record date
shall be the record date specified in or pursuant to such Board Resolution,
which shall be a date not more than 30 days prior to the first solicitation
of Holders generally in connection therewith and no later than the date such
solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Securities then
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Securities then Outstanding shall be computed as of such record
date; provided that no such request, demand, authorization, direction,
notice, consent, waiver or other Act by the Holders on such record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
<PAGE>
21
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, suffered or omitted to be done by the Trustee,
any Paying Agent or the Company in reliance thereon, whether or not notation
of such action is made upon such Security.
Section 106. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder, the agents of the Banks or the Company
shall be sufficient for every purpose hereunder if made, given, furnished or
delivered, in writing, to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Trustee Administration; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or delivered in writing to the Company addressed to
it c/o Cablevision Systems Corporation, One Media Crossways, Woodbury,
New York 11797, Attention: Secretary, or at any other address previously
furnished in writing to the Trustee by the Company.
Section 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when
mailed to a Holder in the aforesaid manner shall be conclusively deemed to
have been received by such Holder whether or not actually received by such
Holder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
<PAGE>
22
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any
event as required by any provision of this Indenture, then any method of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
Section 108. Conflict of Any Provision of Indenture with Trust
Indenture Act.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Trust Indenture Act
Sections 310 to 318, inclusive, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this
Indenture by operation of such Trust Indenture Act Sections, such imposed
duties or incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
<PAGE>
23
Section 113. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
conflicts of laws principles.
Section 114. Legal Holidays.
In any case where any Interest Payment Date, any date established
for payment of Defaulted Interest pursuant to Section 307, or any Maturity
with respect to any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, or date established for payment of
Defaulted Interest pursuant to Section 307, or Maturity, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date, or date established for payment of Defaulted Interest
pursuant to Section 307, or Maturity, as the case may be, to the next
succeeding Business Day.
Section 115. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder by accepting
any of the Securities waives and releases all such liability.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally; Incorporation of Form in Indenture.
The Securities and the Trustee's certificate of authentication with
respect thereto shall be in substantially the forms set forth in this
Article, with such appropriate legends, insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may
have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to comply with the rules of
any securities exchange or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of
the Securities. Any portion of the text of any Security may be set forth on
the reverse thereof, with an appropriate
<PAGE>
24
reference thereto on the face of the Security. Each Security shall be dated
the date of its authentication.
The definitive Securities shall be typewritten, printed,
lithographed, engraved or otherwise produced or produced by any combination
of these methods or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
Section 202. Form of Face of Security.
CABLEVISION SYSTEMS CORPORATION
8 1/8% [SERIES B]* SENIOR DEBENTURE DUE 2009
No. $
_____ _____________
CUSIP No.
_____________
Cablevision Systems Corporation, a Delaware corporation (herein
called the "Company", which term includes any successor entity under this
Indenture hereinafter referred to), for value received, hereby promises to
pay to _________________ or registered assigns the principal sum of ______
Dollars on August 15, 2009, at the office or agency of the Company referred
to below, and to pay interest thereon on February 15 and August 15 in each
year from the Securities Issue Date or from the most recent Interest Payment
Date to which interest has been paid or duly provided for at the rate of
8 1/8% per annum until the principal hereof is paid or duly provided for, and
(to the extent lawful) to pay on demand interest on any overdue interest at
the rate borne by the Securities from the date of the Interest Payment Date
on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for.
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement, dated as of August 26, 1997 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that either (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") with respect to an
exchange offer (the "Exchange Offer") for this Initial Security is not filed
with the Securities and Exchange Commission (the "Commission") on or prior to
October 25, 1997 or (ii) the Exchange Offer is not consummated or a registration
statement under the Securities Act with respect to resales of this Security (the
"Shelf Registration Statement") is not declared effective by the Commission on
or prior to February 22, 1998, in either case in accordance with the
Registration Rights Agreement, the aforesaid interest
rate borne by this
- --------------------
* Include only for Exchange Securities.
<PAGE>
25
Security shall be increased by one-quarter of one percent per annum for the
first 30 days following October 25, 1997 in the case of (i) above, or the
first 90 days following February 22, 1998 in the case of (ii) above. Such
interest rate will increase by an additional one-quarter of one percent per
annum at the beginning of each subsequent 30-day period in the case of (i)
above, or 90-day period in the case of (ii) above, up to a maximum aggregate
increase of one percent per annum. Upon (x) the filing of a registration
statement with respect to the Exchange Offer or (y) the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, the interest rate borne by this Security will be reduced to 8 1/8
per annum.]**
If any interest has accrued on this Security in respect of any
period prior to the issuance of this Security, such interest will be payable
in respect of such period at the rate or rates borne by the Predecessor
Security surrendered in exchange for this Security from time to time during
such period. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the January 31 or July 31 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for, and interest
on such defaulted interest at the interest rate borne by this Security, to
the extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than 10 days prior to such Special Record Date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payment of the principal of and interest on
this Security will be made at the office or agency of the Company maintained
for that purpose in The City of New York, or at such other office or agency
of the Company as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed
to the address of the Person entitled thereto as such address shall appear on
the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
_____________________________
** Include only for Initial Securities.
<PAGE>
26
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under this
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CABLEVISION SYSTEMS CORPORATION
By
______________________________
Attest:
By
___________________________
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company designated as its 8 1/8% [Series B]* Senior Debentures due 2009
(herein called the "Securities"), limited (except as otherwise provided in
this Indenture referred to below) in aggregate principal amount to
$400,000,000, which may be issued under an indenture (herein called the
"Indenture") dated as of August 15, 1997, between the Company and The Bank of
New York, trustee (herein called the "Trustee", which term includes any
successor trustee under this Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and
immunities thereunder of the Company, the Trustee, the holders of the Senior
Indebtedness and the Holders of the Securities, and of the terms upon which
the Securities are, and are to be, authenticated and delivered.
[This Security is exchangeable under certain circumstances as provided
in the Indenture for the Company's 8 1/8% Series B Senior Debentures due 2009
(herein called the "Exchange Securities", issued under the Indenture. Unless
the context otherwise requires, the Securities and Exchange Securities shall
constitute one series for all purposes under the Indenture, including without
limitation amendments and waivers.]**
_________________________
* Include only for Exchange Securities.
** Include only for Initial Securities.
<PAGE>
27
This Security is not subject to redemption at the option of the
Company prior to Maturity.
If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with
the effect provided in this Indenture.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
This Security does not have the benefit of any sinking fund
obligations.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the
Security Register of the Company, upon surrender of this Security for
registration of transfer at the office or agency of the Company maintained
for such purpose in The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
<PAGE>
28
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to pay all documentary, stamp or similar issue or transfer taxes
or other governmental charges payable in connection with any registration of
transfer or exchange.
Prior to the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflicts of laws
principles thereof.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Certificate of Transfer **
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
this Security to
______________________________________________________________________________
(Please typewrite or print name and taxpayer identification number)
______________________________________________________________________________
(Please typewrite or print address)
and hereby irrevocably constitutes and appoints
_________________________________ his attorney to transfer the same on the
books of the Company, with full power of substitution in the premises.
** Include only for Initial Securities.
<PAGE>
29
In connection with any transfer of all or any portion of the
Security evidenced by this certificate for as long as such Security is a
Restricted Security, the undersigned confirms that such Security is being
transferred:
/ / (a) Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act");
or
/ / (b) Pursuant to offers and sales to non-U.S. Persons that occur
outside the United States within the meaning of Regulation S under
the Securities Act;
Unless one of the boxes above is checked, the Trustee will refuse to
register all or any portion of the Security evidenced by this certificate in
the name of any person other than the registered holder thereof (or hereof);
provided, however, that the Trustee may, in its sole discretion, register the
transfer of such Security if it has received such certifications, legal
opinions and/or other information as it has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act of 1933, as amended.
Dated:
Signature
__________________________
_________________________
NOTE: The signature to this assignment must correspond with the name as
written upon the face of this Security in every particular, without
alteration or enlargement, or any change whatever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A (including the
information specified in Rule 144(d)(4)) or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:___________________ ______________________________________
To be signed by an executive officer
<PAGE>
30
SCHEDULE OF EXCHANGES FOR DEFINITIVE SECURITIES
The following exchanges of a part of this Security in global form for
definitive Securities or of definitive Securities for a part of this Security
in global form have been made:
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Security authorized
Principal Principal in global form signatory of
Amount of Amount of following such Trustee or
Date of this Security this Security decrease (or Securities
Exchange in global form in global form increase) Custodian
________ ______________ ______________ _______________ ____________
Section 204. Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By____________________
Authorized Signatory
Dated:
Section 205. Form of Legend on Restricted Securities.
During the period beginning on August 26, 1997 and ending on the later
of August 26, 1999 and the date two years after the last date on which the
Company or any Affiliate of the Company was the owner of an Initial Security
(or any Predecessor Security), any such Initial Security issued or owned during
the period set forth above, as the case may be, and any Initial Security issued
upon registration of transfer of, or in exchange for, or in lieu of, such
Initial Security shall be deemed a "Restricted Security" and shall be subject
to the restrictions on transfer provided in the legend set forth below;
provided, however, that
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31
the term "Restricted Security" shall not include (a) any Initial Security
which is issued upon transfer of, or in exchange for, any Initial Security
which is not a Restricted Security or (b) any Initial Security as to which
such restrictions on transfer have been terminated in accordance with Section
314 or (c) any Exchange Security issued pursuant to an Exchange Offer. Any
Restricted Security shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION.THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF ORIGINAL ISSUE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE DEBENTURES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; PROVIDED THAT THE COMPANY SHALL HAVE THE RIGHT PRIOR
TO ANY SUCH OFFER, SALE PLEDGE OR TRANSFER (i) PURSUANT TO CLAUSE (D)
OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION (IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY) OF COUNSEL SATISFACTORY TO THE
COMPANY, AND CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
THE COMPANY, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS
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32
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY.
Section 206. Form of Legend for Book-Entry Securities.
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the
case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF
THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK 10041) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND SUCH CERTIFICATE ISSUED IN EXCHANGE
FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
33
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $400,000,000,
except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 303, 304, 305, 306 or 906.
The Initial Securities shall be known and designated as the "8 1/8%
Senior Debentures due 2009" and the Exchange Securities shall be known and
designated as the "8 1/8% Series B Senior Debentures due 2009" of the
Company. Their Stated Maturity shall be August 15, 2009, and they shall bear
interest at the rate of 8 1/8% per annum (except as otherwise provided for in
the form of Security) from the Security Issue Date, or the most recent
Interest Payment Date to which interest has been paid or duly provided for on
a given Security or a Security surrendered in exchange for such Security, as
the case may be, payable on February 15, 1998 and semiannually thereafter on
February 15 and August 15 in each year and at said Stated Maturity, until the
principal thereof is paid or duly provided for. The initial Interest Payment
Date for any Security shall be the first February 15 or August 15 occurring
after the Security Issue Date for such Security. The Initial Securities and
the Exchange Securities shall rank pari passu.
The principal of and interest on the Securities shall be payable at
the office or agency of the Company maintained for such purpose in The City
of New York, or at such other office or agency of the Company as may be
maintained for such purpose; provided, however, that, at the option of the
Company, cash interest may be paid by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Security
Register.
The Securities are not subject to redemption at the option of the
Company.
At the election of the Company, the entire indebtedness represented
by the Securities or certain of the Company's obligations and covenants and
certain Events of Default thereunder may be defeased as provided in Article
Twelve.
The Securities will be senior unsecured obligations of the Company
and will rank pari passu in right of payment with all existing and future
unsubordinated indebtedness of the Company.
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34
Section 302. Denominations.
The Securities shall be issauble only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by any one
of the following: its Chairman, one of its Vice Chairmen, its President or
one of its Vice Presidents and attested by one of its Vice Presidents or its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities
or did not hold such offices at the date of such Securities.
The Trustee shall (upon Company Order) authenticate and deliver
Securities for original issue in an aggregate principal amount of up to
$400,000,000.
Each Security shall be dated the date of its authentication.
No Security endorsed thereon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears
on such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of one
of its duly authorized signatories, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey,
transfer, lease or otherwise dispose of substantially all of its properties
and assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the successor Person which shall have received a conveyance,
transfer, Lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article Eight, any
of the Securities authenticated or delivered prior to such consolidation,
merger, conveyance, transfer, Lease or other disposition may, from time to
time, at the request of the successor Person, be exchanged for other
Securities executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for
<PAGE>
35
such exchange and of like principal amount; and the Trustee, upon written
order of the successor Person, shall authenticate and deliver Securities as
specified in such request for the purpose of such exchange. If Securities
shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section 303 in exchange or substitution for
or upon registration of transfer of any Securities, such successor Person, at
the option of any Holder but without expense to such Holder, shall provide
for the exchange of all Securities at the time Outstanding held by such
Holder for Securities authenticated and delivered in such new name.
Except as described below, the Securities will be deposited with, or
on behalf of, the Depository, and registered in the name of the Depository or
the nominee of the Depository in the form of one or more global note
certificates (each a "Rule 144A Global Security"), for credit to the
respective accounts of the beneficial owners of the Securities represented
thereby. The Rule 144A Global Securities shall bear the legend set forth in
Section 206 and, in the case of Restricted Securities, the legend set forth
in Section 205.
Securities purchased by persons outside the United States pursuant
to sales in accordance with Regulation S under the Securities Act shall be
deposited with, or on behalf of, the Depository, and registered in the name
of the Depository or the nominee of the Depository in the form of one or more
global note certificates (each a "Regulation S Global Security"), for credit
to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), provided
that upon such deposit all such Securities shall be credited to or through
accounts maintained at the Depository by or on behalf of the Euroclear System
or Cedel Bank, S.A. Securities represented by a Regulation S Global Security
will not be exchangeable for Securities in registered definitive form (each a
"Physical Security") until the expiration of the "40-day restricted period"
within the meaning of Rule 903(c)(3) of Regulation S under the Securities
Act. The Regulation S Global Securities shall bear the legend set forth in
Section 206 and, in the case of Restricted Securities, the legend set forth
in Section 205.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are typewritten, printed, lithographed, engraved
or otherwise produced or produced by any combination of these methods, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive
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36
Securities, the temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the office or agency
of the Company designated for such purpose pursuant to Section 1002, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided. Such
Security Register shall distinguish between Initial Securities and Exchange
Securities.
Except as otherwise described in this Article Three, upon surrender
for registration of transfer of any Security at the office or agency of the
Company designated pursuant to Section 1002 for such purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations and of a like
aggregate principal amount upon surrender of the Securities to be exchanged
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive; provided that no exchange of Initial Securities for Exchange
Securities shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission, the Trustee shall have
received an Officers' Certificate confirming that the Exchange Offer
Registration Statement has been declared effective by the Commission and the
Initial Securities to be exchanged for the Exchange Securities shall be
cancelled by the Trustee.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the
same debt, and (subject to the provisions in the Initial Securities regarding
the payment of additional interest) entitled to the
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37
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer, or for exchange, shall (if so required by the Company or the
Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
Every Restricted Security shall be subject to, and no transfer shall
be made other than in accordance with, the restrictions on transfer provided
in the legend set forth on the form of the face of each Restricted Security
and the restrictions set forth in this Article Three, and the Holder of each
Restricted Security, by such Holder's acceptance thereof, agrees to be bound
by such restrictions on transfer.
The Security Registrar shall notify the Company of any proposed
transfer of a Restricted Security to any Person.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to pay all documentary, stamp or similar issue or transfer taxes
or other governmental charges that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 303, 304 or 906 not involving any transfer.
The Company shall not be required to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business
15 days before an Interest Payment Date and ending on the close of business
on such Interest Payment Date.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them
to save each of them and any agent of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by
a bona fide purchaser, the Company shall execute and upon Company Order the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a
replacement Security of like tenor and principal amount, and bearing a number
not contemporaneously outstanding.
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38
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section
306, the Company may require the payment of a sum sufficient to pay all
documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section 306 in
lieu of any destroyed, lost or stolen Security shall constitute a contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.
The provisions of this Section 306 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. The initial Interest Payment Date for any Security shall be the
first February 15 or August 15 occurring after the Securities Issue Date for
such Security.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the interest rate borne by the Securities, to the
extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest"), shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder; and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be
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39
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Subsection
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date. In the name and at the
expense of the Company, the Trustee shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Subsection,
such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307, each
Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308. Persons Deemed Owners.
Prior to the time of due presentment for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and
(subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
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Section 309. Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as provided in this
Section 309, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by the
Company pursuant to a Company Order, provided, however, that the Trustee
shall not be required to destroy such cancelled Securities.
Section 130. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 311. Registration Rights of Holders of Initial Securities.
Pursuant to the terms of the Registration Rights Agreement, holders
of Initial Securities, if any, shall be entitled to the benefits of the
Registration Rights Agreement.
Section 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use) in addition to serial numbers, and, if so, the Trustee
shall use such "CUSIP" numbers in addition to serial numbers in notices of
repurchase as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
repurchase and that reliance may be placed only on the serial or other
identification numbers printed on the Securities, and any such repurchase
shall not be affected by any defect in or omission of such "CUSIP" numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP"
numbers.
Section 313. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as
set forth in Section 206 and, in the case of Restricted Securities in the
form of Global Securities, Section 205.
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Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner
of the Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in a Rule 144A Global
Security may be transferred or exchanged for interests in a Regulation S
Global Security, and interests of beneficial owners in a Regulation S Global
Security may be transferred or exchanged for interests in a Rule 144A Global
Security, in each case in accordance with the rules and procedures of the
Depository and the provisions of Section 314. Interests of beneficial owners
in the Global Securities may be transferred or exchanged for Physical
Securities in accordance with the rules and procedures of the Depository and
the provisions of Section 314.
In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depository notifies the Company that it is unwilling or
unable to continue as a depository for such Global Security or if at any time
the Depository ceases to be a clearing agency registered under the Exchange
Act, and a successor depository is not appointed by the Company within 90
days, (ii) there shall have occurred and be continuing an Event of Default
with respect to the Securities represented by such Global Security or (iii)
the Company at any time determines not to have Securities represented by a
Global Security.
Except as provided above, any Security authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, any
Global Security, whether pursuant to this Section 313, Section 304, 305, 306
or 906 or otherwise, shall also be a Global Security and bear the legend
specified in Section 206.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Security Registrar shall (if one or more Physical
Securities are to be issued) reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal
to the principal amount of the beneficial interest in the Global Security to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver,
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42
one or more Physical Securities of like tenor and principal amount of
authorized denominations.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global
Securities shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depository in exchange
for its beneficial interest in the Global Securities, an equal aggregate
principal amount of Physical Securities of like tenor of authorized
denominations.
(e) Any Physical Security delivered in exchange for an interest in a
Global Security pursuant to paragraph (b) or (c) of this Section 313 shall,
except as otherwise provided by clause (1)(x) of paragraph (a) and by
paragraph (d) of Section 314, bear the legend set forth in Section 205.
(f) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 314. Special Transfer Provisions.
(a) Transfers to Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer of a
Restricted Security to any non-U.S. person:
(1) the Security Registrar shall register the transfer of any
Restricted Security if (x) the requested transfer is not prior to the
date which is two years (or such other period as may be prescribed by
Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original issue date of such
Security (or of any Predecessor Security) or the last day on which
the Company or any Affiliate of the Company was the owner of such
Security or any Predecessor Security or (y) the proposed transferee has
checked the box provided for on the form of Security stating, and has
provided to the Security Registrar such certifications, opinions and
other information as the Security Registrar may (and, if so directed by
the Company, shall) require, stating that such Security is being
transferred pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act; and
(2) the Security Registrar shall register the transfer of any
Restricted Security if the proposed transferor is an Agent Member
holding a beneficial interest in a Rule 144A Global Security, upon
receipt by the Security Registrar of (x) the
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43
certificate, if any, required by paragraph (1) above and (y)
instructions given in accordance with the Depository's and the
Security Registrar's procedures;
whereupon the Security Registrar shall reflect on its books and records the
date of such transfer and (A) (if the transfer involves a transfer of a
beneficial interest in a Rule 144A Global Security) a decrease in the
principal amount of such Rule 144A Global Security in an amount equal to the
principal amount to be transferred and (B) an increase in the principal
amount of a Regulation S Global Security in an amount equal to the principal
amount to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security
to a person purporting to be a QIB (excluding transfers to non-U.S. persons):
(1) the Security Registrar shall register the transfer of any
Restricted Security if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security
stating, or who has otherwise advised the Company and the Security
Registrar in writing, that the transfer has been made in compliance
with the exemption from registration under the Securities Act provided
under Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised
the Company and the Security Registrar in writing, that such transferee
represents and warrants that it is purchasing the Security for its own
account or an account with respect to which it exercises sole
investment discretion and that each of it and any such account is a
QIB within the meaning of Rule 144A and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the foregoing
representations in order to claim the exemption from registration
provided by Rule 144A; and
(2) the Security Registrar shall register the transfer of any
Restricted Security if the proposed transferee is an Agent Member, and
the Securities to be transferred consist of Physical Securities which
after transfer are to be evidenced by an interest in the Rule 144A
Global Security, upon receipt by the Security Registrar of instructions
given in accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall reflect on the Security
Register the date and an increase in the principal amount of the
Rule 144A Global Security in an amount equal to the principal amount
of the Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.
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(c) Other Transfers. If a Holder proposes to transfer a Security
pursuant to any exemption from the registration requirements of the
Securities Act other than as provided for by Sections 314(a) and 314(b), the
Security Registrar shall only register such transfer or exchange if such
transferor delivers to the Security Registrar and the Trustee an Opinion of
Counsel satisfactory to the Company and the Security Registrar that such
transfer is in compliance with the Securities Act and the terms of this
Indenture; provided that the Company may, based upon the opinion of its
counsel, instruct the Security Registrar by a Company Order not to register
such transfer in any case where the proposed transferee is not a QIB or a
non-U.S. person.
(d) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Restricted Securities, the Security Registrar
shall deliver only Securities that bear the legend set forth in Section 205
unless the circumstances contemplated by clause (a)(1)(x) of this Section 314
exist. By its acceptance of any Security bearing the legend set forth in
Section 205, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in such legend and
agrees that it will transfer such Security only as provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 313 or this
Section 314 for a period of two years, after which time such letters, notices
and other written communications shall at the written request of the Company
be delivered to the Company. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable prior written notice to the
Security Registrar.
(e) Termination of Restrictions. The restrictions imposed by this
Section 314 upon the transferability of any particular Restricted Security
shall cease and terminate (a) on the later of August 26, 1999 and two years
after the last date on which the Company or any Affiliate of the Company was
the owner of such Restricted Security (or any predecessor of such Restricted
Security) or (b) (if earlier) if and when such Restricted Security has been
sold pursuant to an effective registration statement under the Securities
Act. Any Restricted Security as to which such restrictions on transfer shall
have expired in accordance with their terms or shall have terminated may,
upon surrender of such Restricted Security for exchange to the Trustee or any
transfer agent in accordance with the provisions of Section 305, be exchanged
for a new Initial Security, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by Section 205. The
Company shall inform the Trustee in writing of (a) the effective date of any
registration statement registering the Initial Securities under the
Securities Act and (b) at the request of the Trustee, the date which is two
years after the last date on which the Company or any Affiliate of the
Company was the owner of a Restricted Security in the event that an Exchange
Offer has not been consummated.
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45
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to surviving rights of registration of transfer or exchange
of Securities herein expressly provided for) and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) either
(1) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable within one year,
and the Company, in the case of (i) or (ii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest to the date
of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (2) of
Subsection (a) of this Section 401, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any Security
when the same becomes due and payable and such default continues for a
period of 30 days;
(b) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon
acceleration or otherwise;
(c) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture, and the
Default continues for the period and after the notice, if any, specified
below;
(d) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or one of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or one of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or shall
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47
be created hereafter (but excluding any Indebtedness for the deferred
purchase price of property or services owed to the Person providing such
property or services as to which the Company or such Restricted Subsidiary
is contesting its obligation to pay the same in good faith and by proper
proceedings and for which the Company or such Restricted Subsidiary has
established appropriate reserves), and (i) either (A) such event of default
results from the failure to pay any such Indebtedness at final maturity or
(B) as a result of such event of default the maturity of such Indebtedness
has been accelerated prior to its expressed maturity and (ii) the principal
amount of such Indebtedness equals $10,000,000 or more or, together with
the principal amount of any such Indebtedness in default for failure to pay
principal at maturity or the maturity of which has been so accelerated,
aggregates $10,000,000 or more;
(e) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the
Company or any Restricted Subsidiary and either (i) an enforcement
proceeding shall have been commenced by any creditor upon such judgment
or (ii) such judgment remains undischarged and unbonded for a period
(during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such judgments exceeds $10,000,000;
(f) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing that it generally is unable to pay its
debts as the same become due; or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case
or proceeding,
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(ii) appoints a Custodian of the Company or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator or similar official
under any Bankruptcy Law.
A Default under Section 501(c) is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
principal amount of the Securities then Outstanding notify the Company and
the Trustee in writing, of the Default, and the Company does not cure the
Default within 60 days (30 days in the case of a Default under Section 801 or
1004) after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of
Default." Such notice to the Company shall be given by the Trustee if so
requested in writing by the Holders of 25% of the principal amount of the
Securities then Outstanding.
Section 502. Acceleration of Maturity; Rescission.
If an Event of Default (other than an Event of Default specified in
Section 501(f) or 501(g)) occurs and is continuing, the Trustee or the
Holders of at least 25% of the principal amount of the Initial Securities and
the Exchange Securities then Outstanding, voting together as a single class,
by written notice to the Company and the agents, if any, under the Bank
Credit Agreement (and to the Trustee if such notice is given by the Holders),
may, and the Trustee at the request of such Holders shall, declare all unpaid
principal of and accrued interest on all the Securities to be due and
payable, as specified below. Upon a declaration of acceleration, such
principal and accrued interest shall be due and payable 10 days after receipt
by the Company of such written notice given hereunder. If an Event of
Default specified in Section 501(f) or 501(g) with respect to the Company
occurs, the amounts described above shall ipso facto become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder. Upon payment of such principal and interest
all of the Company's obligations under the Securities and this Indenture,
other than obligations under Section 606, shall terminate.
The Holders of at least a majority in principal amount of the
Initial Securities and the Exchange Securities then Outstanding, voting
together as a single class, by written notice to the Trustee, may rescind an
acceleration and its consequences if (i) all existing Events of Default,
other than the non-payment of principal of or interest on the Securities
which have become due solely because of the acceleration, have been cured or
waived and
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(ii) the rescission would not conflict with any judgment or decree of a court
of competent jurisdiction.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Securities because an Event of
Default specified in Section 501(d) shall have occurred and be continuing,
such declaration of acceleration shall be automatically annulled if the
Indebtedness that is the subject of such Event of Default has been discharged
or the holders thereof have rescinded their declaration of acceleration in
respect of such Indebtedness, and written notice of such discharge or
rescission, as the case may be, shall have been given to the Trustee by the
Company and countersigned by the holders of such Indebtedness or a trustee,
fiduciary or agent for such holders, within 30 days after such declaration of
acceleration in respect of the Securities, and no other Event of Default has
occurred during such 30-day period which has not been cured or waived during
such period.
Notices by the Trustee to the agents under the Bank Credit Agreement
provided for herein shall be delivered or mailed to Toronto Dominion (Texas),
Inc., 909 Fannin Street, Suite 1700, Houston, Texas 77010, Attention: Agency
Department; and to any other person who hereafter becomes an agent under the
Bank Credit Agreement, provided the Trustee has been notified by the Company
or the Banks of the names and mailing addresses of such persons.
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(b) default is made in the payment of the principal of any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, with interest upon the overdue
principal and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest, at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of
the Holders under this Indenture by such appropriate private or judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
such rights.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any
proposal, plan of
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51
reorganization, arrangement, adjustment or composition or other similar
arrangement affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name and as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 606;
SECOND: To the payment of the amounts then due and unpaid
upon the Securities for principal and interest, in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and interest; and
THIRD: The balance, if any, to the Company.
Section 507. Limitation on Suits.
No Holder of any Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
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(b) the Holders of not less than 25% in principal amount of the
Initial Securities and the Exchange Securities then Outstanding, voting
together as a single class, shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture except in the
manner provided in this Indenture and for the equal and ratable benefit of
all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest on
such Security on the respective due dates expressed in such Security and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
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53
Section 510. Rights and Remedies Cumulative.
Except as provided in Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the Initial
Securities and the Exchange Securities then Outstanding, voting together as a
single class, shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or expose the Trustee to personal liability, and
(b) subject to the provisions of Trust Indenture Act Section 315, the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 513. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Initial
Securities and the Exchange Securities then Outstanding, voting together as a
single class, may on behalf of the Holders of all the Securities waive any
past Default or Event of Default hereunder and its consequences, except a
Default or Event of Default
(a) in the payment of the principal of or interest on any Security, or
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54
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 514
shall not apply to any suit instituted by the Trustee, to any suit instituted
by any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Initial Securities and the Exchange Securities then
Outstanding, voting together as a single class, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest
on any Security on or after the respective Stated Maturities expressed in
such Security; provided that neither this Section 514 nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or
to make such an assessment in any suit instituted by the Company.
Section 515. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such
law had been enacted.
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ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
Within 90 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, notice of such Default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest
of the Holders; and provided further that, in the case of any default or
breach of the character specified in Section 501(d), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.
Section 602. Certain Rights of Trustee.
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
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56
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder; and
(h) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Section 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities. The Trustee shall not be accountable
for the use or application by the Company of Securities or the proceeds
thereof, except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the Securities and perform
its obligations hereunder and that the statements to be made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein.
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57
Section 604. May Hold Securities.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner
or pledgee of Securities and, subject to Trust Indenture Act Sections 310(b)
and 311, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar or such other
agent.
Section 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed in writing with the Company.
Section 606. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as
shall be agreed to in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify each of the Trustee or any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim,
liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section 606, the Trustee shall have a Lien prior to the Securities
upon all property and funds
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held or collected by the Trustee as such, except funds held in trust for the
benefit of Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(f) or 501(g), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services will be intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 606 shall survive the termination of
this Indenture.
Section 607. Conflicting Interests.
(a) The Trustee shall comply with the provisions of Section 310(b) of
the Trust Indenture Act.
(b) The indenture dated as of February 15, 1993, for the Company's
9 7/8% Senior Subordinated Debentures due 2013, the indenture dated as of
April 1, 1993, for the Company's 9 7/8% Debentures due 2023 and the
indenture dated as of November 1, 1995, for the Company's 9 1/4% Senior
Subordinated Debentures due 2005, the Company's 9 7/8% Senior Subordinated
Debentures due 2006 and the Company's 10 1/2% Senior Subordinated Debentures
due 2016, shall be deemed to be specifically described herein for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder qualified or to be
qualified under Trust Indenture Act Section 310(a)(1) and which shall have a
combined capital and surplus of at least $25,000,000 to the extent there is
such an institution eligible and willing to serve. If the Trustee publishes
reports of condition at least annually, pursuant to law or to the
requirements of Federal, State, Territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section
608, the combined capital and surplus of the Trustee shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 608, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered
to the Trustee and the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the removed Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, the Holder of any Security who has
been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with Section 610, become the successor Trustee and
supersede the successor Trustee appointed by
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the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders of the Securities and so accepted appointment, the
Holder of any Security who has been a bona fide Holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office.
Section 610. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee,
provided, however, that the retiring Trustee shall continue to be entitled to
the benefit of Section 606(c); but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 611. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such
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61
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
Section 612. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor under the Securities), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee or any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the
Holders in accordance with Trust Indenture Act Section 312, regardless of the
source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a
request made under Trust Indenture Act Section 312.
Section 702. Reports by Trustee.
Within 60 days after April ____ of each year commencing with the
first April ____ after the Security Issue Date, the Trustee shall transmit by
mail to all Holders, as their names and addresses appear in the Security
Register, as provided in Trust Indenture Act Section 313(c), a brief report
dated as of such April ____ if required by Trust Indenture Act Section 313(a).
Section 703. Reports by Company.
The Company shall:
(a) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations
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62
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934; or, if the Company is not required to file information, documents or
reports pursuant to either of such Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, in the manner and to the extent provided in Trust
Indenture Act Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 703 as may be required by rules
and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate or merge with or into, or sell,
assign, transfer, lease, convey, or otherwise dispose of all or substantially
all of its assets to, any Person, unless:
(a) the Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment,
transfer, Lease, conveyance or disposition shall have been made, is a
corporation organized and existing under the laws of the United States,
any state thereof or the District of Columbia and shall assume by
supplemental indenture hereto all the obligations of the Company under
the Securities and this Indenture;
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(b) immediately before and immediately after such transaction, and
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(c) immediately after such transaction, and after giving effect
thereto, the Person formed by or surviving any such consolidation or
merger, or to which such sale, assignment, transfer, Lease or conveyance
or disposition shall have been made (the "successor"), shall have a Cash
Flow Ratio not in excess of 9 to 1; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, or transfer and such supplemental indenture, if
one is required by this Section 801, comply with this Section 801 and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Cash Flow Ratio for purposes of this Section 801 shall be computed
as if any such successor were the Company.
Section 802. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
Lease or conveyance or other disposition of all or substantially all of the
assets, of the Company in accordance with Section 801, the successor Person
formed by such consolidation or into which the Company is merged or to which
such sale, assignment, transfer, Lease, conveyance or other disposition is
made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein. When a successor
assumes all the obligations of its predecessor under this Indenture and the
Securities, the predecessor will be released from those obligations,
provided that in the case of a transfer by Lease, the predecessor corporation
shall not be released from the payment of principal and interest on the
Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or
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more indentures supplemental hereto in form satisfactory to the Trustee,
for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein or in the Securities
conferred upon the Company;
(c) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that, in each case, such
provisions shall not adversely affect the interests of the Holders in any
material respect;
(d) to secure the Securities, if the Company so elects;
(e) to make any changes necessary to qualify this Indenture under
the Trust Indenture Act in connection with the Exchange Offer or the
Shelf Registration Statement; or
(f) to make any other change that does not adversely affect the
rights of any Holder.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Initial Securities and the Exchange
Securities then Outstanding, voting together as a single class, by Act of
such Holders delivered to the Company and the Trustee and the Company, each
when authorized by a Board Resolution, and the Trustee may enter into one or
more indentures supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of waiving or modifying in any manner the rights of the Holders
under this Indenture; provided, however, that no such supplemental indenture,
amendment or waiver shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon, or change the coin or currency
in which the principal of any Security or the
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interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof; or
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(c) modify any of the provisions of this Section 902 or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Trust Indenture Act Section 315(a) through 315(d)
and Section 602 hereof) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain, in The City of New York, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. If the Corporate Trust Office is located
in New York City, then it shall be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency
for one or more of such purposes. The Company will give prompt written notice
to the Trustee of any change in the location of any such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all such purposes, and
may from time to time rescind such designation; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such
office or agency.
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Section 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of or interest on any of
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum in same day
funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) sufficient to pay the
principal or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal or interest and (unless
such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of or
interest on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
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Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest
on any Security and remaining unclaimed for two years after such principal or
interest has become due and payable shall be paid to the Company on Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Restricted Subsidiary of the Company and
the corporate rights (charter and statutory), corporate licenses and
corporate franchises of the Company and its Restricted Subsidiaries, except
where a failure to do so, singly or in the aggregate, is not likely to have a
materially adverse effect upon the business, assets, financial condition or
results of operations of the Company and the Restricted Subsidiaries taken as
a whole determined on a consolidated basis in accordance with generally
accepted accounting principles; provided that the Company shall not be
required to preserve any such existence (except of the Company), right,
license or franchise if the Board of Directors, or of the Restricted
Subsidiary concerned, shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company or such
Restricted Subsidiary and that the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 1005. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments
and governmental charges levied or imposed upon it or any Subsidiary or upon
the income, profits or property of the Company or any of its Subsidiaries and
(b) all material lawful claims for labor, materials and supplies, which, if
unpaid, might by law become a lien upon the property of the Company or any
Restricted Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Section 1006. Maintenance of Properties.
The Company shall cause all material properties owned by or leased
to it or any Restricted Subsidiary of the Company and necessary in the
conduct of its business or the business of such Restricted Subsidiary to be
maintained and kept in normal condition, repair
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and working order, ordinary wear and tear excepted; provided that nothing in
this Section 1006 shall prevent the Company or any Restricted Subsidiary of
the Company from discontinuing the use, operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors or the Restricted
Subsidiary concerned, or of any officer (or other agent employed by the
Company or any Restricted Subsidiary of the Company) of the Company or such
Restricted Subsidiary having managerial responsibility for any such property,
desirable in the conduct of the business of the Company or any Restricted
Subsidiary of the Company and if such discontinuance or disposal is not
adverse in any material respect to the Holders.
The Company shall provide or cause to be provided, for itself and
any Restricted Subsidiaries of the Company, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured
against by corporations similarly situated and owning like properties in the
same general areas in which the Company or such Restricted Subsidiaries
operate.
Section 1007. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, incur, create, issue, assume,
guarantee or otherwise become liable for, contingently or otherwise, or
become responsible for the payment of, contingently or otherwise, any
Indebtedness (other than Indebtedness between or among any of the Company and
Restricted Subsidiaries) unless, after giving effect thereto, the Cash Flow
Ratio shall be less than or equal to 9 to 1.
Section 1008. Limitation on Liens.
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 this Indenture or
hereafter acquired, or any income, profits or proceeds therefrom, or assign
or otherwise 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 Securities, the Securities 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 Securities are equally and ratably secured.
Section 1009. Limitation on Restricted Payments.
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
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consequence of such Restricted Payment or (b) immediately after giving effect
to such Restricted Payment, the aggregate of all Restricted Payments that
shall have been made on or after July 1, 1988 would exceed the sum of:
(i) $25,000,000, plus
(ii) an amount equal to the difference between (A) the Cumulative
Cash Flow Credit and (B) 1.2 multiplied by Cumulative Interest
Expense.
For purposes of this Section 1009, the amount of any Restricted
Payment, if other than cash, shall be based upon fair market value as
determined by the Board of Directors, whose good faith determination shall be
conclusive.
The foregoing provisions of this Section 1009 shall not prevent (i)
the payment of any dividend within 60 days after the date of declaration
thereof, if at such date of declaration such payment complied with the
provisions or this Section 1009; (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 of the proceeds of a sale (within one year before or
180 days after such retirement, redemption, purchase, defeasance 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 Section 1009, all amounts expended
pursuant to clauses (i) and (iii) of this paragraph shall be included and all
amounts expended or received pursuant to clause (ii) of this paragraph shall
be excluded; provided, however, that amounts paid pursuant to clause (i) of
this paragraph shall be included only to the extent that such amounts were
not previously included in calculating Restricted Payments.
For the purposes of this Section 1009, the net proceeds from the
issuance of shares of Capital Stock of the Company upon conversion of
Indebtedness shall be deemed to be an amount equal to (i) the accreted value
of such Indebtedness on the date of such conversion and (ii) the additional
consideration, if any, received by the Company upon such conversion thereof,
less any cash payment on account of fractional shares (such consideration, if
in property other than cash, to be determined by the Board of Directors,
<PAGE>
71
whose good faith determination shall be conclusive). If the Company makes a
Restricted Payment which, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted
under the requirements of this Section 1009, such Restricted Payment shall be
deemed to have been made in compliance with this Section 1009 notwithstanding
any subsequent adjustments made in good faith to the Company's financial
statements affecting Cumulative Cash Flow Credit or Cumulative Interest
Expense for any period.
Section 1010. Limitation on Investments in Unrestricted
Subsidiaries and Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) make any Investment or (ii) allow
any Restricted Subsidiary to become an Unrestricted Subsidiary (a
"redesignation of a Restricted Subsidiary"), in each case unless (a) no
Default or Event of Default shall have occurred and be continuing or shall
occur as a consequence of such Investment or such redesignation of a
Restricted Subsidiary and (b) after giving effect thereto, the Cash Flow
Ratio shall be less than or equal to 9 to 1.
The foregoing provisions of this Section 1010 shall not prohibit (i)
any renewal or reclassification of any Investment existing on the date hereof
or (ii) trade credit extended on usual and customary terms in the ordinary
course of business.
Section 1011. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to or purchase any property or assets from, or enter into any
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, an Affiliate of the Company that is not a Subsidiary, 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 shall make a
good faith determination that the terms of such transaction are, taken as a
whole, no less favorable to the Company or such Subsidiary, as the case may
be, than those which might be available in a comparable transaction with an
unrelated Person. For purposes of clarification, this Section 1011 shall not
apply to any Restricted Payments permitted by Section 1009.
Section 1012. Provision of Financial Statements.
(a) The Company shall supply without cost to each Holder of the
Securities, and file with the Trustee (if not otherwise filed with the
Trustee pursuant to Section 703) within 30 days after the Company is required
to file the same with the Commission, copies of the annual reports and
quarterly reports and of the information, documents and other reports which
the Company may be required to file with the
<PAGE>
72
Commission pursuant to Section 13(a), 13(c) or 15(d) of the Securities
Exchange Act of 1934.
(b) If the Company is not required to file with the Commission such
reports and other information referred to in Section 1012(a), the Company
shall furnish without cost to each Holder of the Securities and file with the
Trustee (i) within 140 days after the end of each fiscal year after August
26, 1997, annual reports containing the information required to be contained
in Items 1, 2, 3, 6, 7, 8 and 9 of Form 10-K promulgated under the Exchange
Act, or substantially the same information required to be contained in
comparable items of any successor form, and (ii) within 75 days after the end
of each of the first three fiscal quarters of each fiscal year, quarterly
reports containing the information required to be contained in Form 10-Q
promulgated under the Exchange Act, or substantially the same information
required to be contained in any successor form.
(c) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Restricted
Security, the Company will promptly furnish or cause to be furnished such
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto) to such Holder or to a prospective
purchaser of such Security designated by such holder, as the case may be, in
order to permit compliance by such holder with Rule 144A under the Securities
Act.
Section 1013. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year ending after August 26, 1997, a brief certificate of
its principal executive officer, principal financial officer or principal
accounting officer stating whether, to such officer's knowledge, the Company
is in compliance with all covenants and conditions under this Indenture. For
purposes of this Section 1013, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
Section 1014. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1007 through 1012 if, before or
after the time for such compliance, the Holders of a majority in aggregate
principal amount of the Outstanding Securities, by Act of such Holders, waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
<PAGE>
73
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. No Right of Redemption.
The Securities are not subject to redemption at the option of the
Company.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
Section 1201. Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either Section 1202 or Section
1203 be applied to all Outstanding Securities upon compliance with the
conditions set forth below in this Article Twelve.
Section 1202. Defeasance and Discharge.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities, which shall thereafter be deemed
to be "Outstanding" only for the purposes of Section 1205 and the other
Sections of this Indenture referred to in (A) and (B) below, and to have
satisfied all its other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A)
the rights of Holders of Outstanding Securities to receive solely from the
trust fund described in Section 1204 and as more fully set forth in such
Section, payments in respect of the principal of and interest on such
Securities when such payments are due, (B) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith and (D) this Article
Twelve. Subject to compliance with this Article Twelve, the Company may
exercise its option under this Section 1202 notwithstanding the prior
exercise of its option under Section 1203 with respect to the Securities.
<PAGE>
74
Section 1203. Covenant Defeasance.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203, the Company shall be released from its
obligations under any covenant contained in Article Eight and in Sections
1004 through 1012 with respect to the Outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder (it being understood that such Securities
shall not be deemed Outstanding for financial accounting purposes). For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default
under Section 501(c), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon
the Company's exercise under Section 1201 of the option applicable to Section
1203, Sections 501(c) through 501(e) shall not constitute Events of Default.
Section 1204. Conditions to Defeasance or Covenant Defeasance.
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 608 who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (A) cash in U.S. Dollars
in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day
before the due date of any payment, cash in U.S. Dollars in an
amount, or (C) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of and interest on the Outstanding Securities on the
Stated Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or analogous
<PAGE>
75
payments applicable to the Outstanding Securities on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities; provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to said payments with respect to the
Securities. For this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Subsection 501(f) or 501(g) is concerned, at
any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the
Company is a party or by which it is bound.
(4) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States stating that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling
or (y) since August 26, 1997, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance
and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if
such defeasance had not occurred.
<PAGE>
76
(5) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States to the effect that the Holders of the Outstanding
Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant defeasance and will
be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred.
(6) In the case of an election under either Section 1202 or
1203, the Company shall represent to the Trustee that the deposit
made by the Company pursuant to its election under Section 1202 or
1203 was not made by the Company with the intent of preferring the
Holders over other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding creditors of the
Company or others.
(7) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United
States, each stating that all conditions precedent provided for
relating to either the defeasance under Section 1202 or the covenant
defeasance under Section 1203 (as the case may be) have been
complied with.
Section 1205. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Outstanding Securities shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by law. Money and
U.S. Government Obligations so held in trust are not subject to Article
Twelve.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money
<PAGE>
77
or U.S. Government Obligations held by it as provided in Section 1204 which,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 1204(1)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
Section 1206. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203, as the case may be, by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 1202 or
1203, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1202 or 1203, as
the case may be; provided, however, that, if the Company makes any payment of
principal of or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
* * * * *
<PAGE>
This Indenture may be signed in any number of counterparts with the
same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
CABLEVISION SYSTEMS CORPORATION
By:
----------------------------
Title:
Attest:
- ------------------------
Title:
THE BANK OF NEW YORK
By:
---------------------------
Title:
<PAGE>
EXHIBIT A
List of Restricted Subsidiaries
A-R Cable Services - NY, Inc.
Arsenal MSub 2, Inc.
Cable Science Corporation
Cablevision Area 9 Corporation
Cablevision Fairfield Corporation
Cablevision Finance Corporation
Cablevision Finance Limited Partnership
Cablevision Lightpath, Inc.
Cablevision MFR, Inc.
Cablevision of Boston, Inc.
Cablevision of Brookline Limited Partnership
Cablevision of Brookline, Inc.
Cablevision of Connecticut Corporation
Cablevision of Connecticut Limited Partnership
Cablevision of Hudson County, Inc.
Cablevision of Michigan, Inc.
Cablevision of Monmouth, Inc.
Cablevision of New Jersey, Inc.
Cablevision of New York City - Master L.P.
Cablevision of New York City - Phase I L.P.
Cablevision of Newark
Cablevision Systems Brookline Corporation
Cablevision Systems Dutchess Corporation
Cablevision Systems East Hampton Corporation
Cablevision Systems Great Neck Corporation
Cablevision Systems Huntington Corporation
Cablevision Systems Islip Corporation
Cablevision Systems Long Island Corporation
Cablevision Systems New York City Corporation
Cablevision Systems of Southern Connecticut Limited Partnership
Cablevision Systems Suffolk Corporation
Cablevision Systems Westchester Corporation
Cablevision Systems of Southern Connecticut Limited Partnership
Communications Development Corporation
CSC Acquisition - MA, Inc.
CSC Acquisition - NY, Inc.
CSC Acquisition Corporation
CSC Gateway Corporation
NYC GP Corp.
NYC LP Corp.
Petra Cablevision Corporation
<PAGE>
A-2
Samson Cablevision Corp.
Suffolk Cable Corporation
Suffolk Cable of Shelter Island, Inc.
Suffolk Cable of Smithtown, Inc.
<PAGE>
EXHIBIT B
Form of Registration Rights Agreement
<PAGE>
EXHIBIT 5
[LETTERHEAD OF SULLIVAN & CROMWELL]
October 16, 1997
Cablevision Systems Corporation
One Media Crossways
Woodbury, New York 11797
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of $400,000,000 principal amount of 8 1/8% Series B Senior
Debentures due 2009 (the "Securities") of Cablevision Systems Corporation, a
Delaware corporation (the "Company"), we, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion.
Upon the basis of such examination, we advise you that, in our
opinion, when the Registration Statement has become effective under the Act
and the Securities have been duly executed and authenticated in accordance
with the Indenture relating to the Securities and issued and delivered as
contemplated in the Registration Statement, the
<PAGE>
Cablevision Systems Corporation -2-
Securities will constitute valid and legally binding obligations of the
Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of
the State of Delaware, and we are expressing no opinion as to the effect of
the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to
be responsible, and we have assumed that the Indenture has been duly
authorized, executed and delivered by the Trustee thereunder, an assumption
which we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading
"Validity of New Debentures" in the Prospectus. In giving such consent, we
<PAGE>
Cablevision Systems Corporation -3-
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 12.1
CABLEVISION SYSTEMS CORPORATION
COMPUTATION OF DEFICIENCY OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
<S> <C> <C> <C> <C> <C> <C> <C>
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
<CAPTION>
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Loss from continuing operations.............. $ (167,966) $ (160,476) $ (332,079) $ (317,458) $ (315,151) $ (246,782) $ (250,503)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
ADD:
Fixed charges per (B) below.................. 159,843 136,845 278,437 322,054 269,627 238,109 199,691
Amortization of previously capitalized
interest..................................... 0 0 0 0 0 0 0
DEDUCT
Interest capitalized during period........... 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings for computation purposes (A).......... $ (8,123) $ (23,631) $ (53,642) $ 4,596 $ (45,524) $ (8,673) $ (50,842)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges:
Interest on Indebtedness, expensed or
capitalized, including amortization of debt
expense.................................... 153,785 132,099 268,177 313,850 263,299 232,434 194,628
Portion of rents representative of the interest
factor....................................... 6,058 4,746 10,260 8,204 6,328 5,675 5,033
---------- ---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges for computation purposes (B)..... $ 159,843 $ 136,845 $ 278,437 $ 322,054 $ 269,627 $ 238,109 $ 199,661
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Deficiency of earnings available to cover fixed
charges...................................... $ (167,966) $ (160,476) $ (332,079) $ (317,458) $ (315,151) $ (246,782) $ (250,503)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
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 Form S-4.
KPMG Peat Marwick LLP
Jericho, New York
October 9, 1997
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
--------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------------
CABLEVISION SYSTEMS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 11-2776686
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Media Crossways
Woodbury, New York 11797
(Address of principal executive offices) (Zip code)
--------------------------
8 1/8% Series B Senior Debentures due 2009
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 3rd day of October, 1997.
THE BANK OF NEW YORK
By: /s/ Thomas E. Tabor
--------------------------------
Name: Thomas E. Tabor
Title: Assistant Treasurer
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,a member of the Federal Reserve
System, at the close of business June 30, 1997, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........... $ 7,769,502
Interest-bearing balances .................................... 1,472,524
Securities:
Held-to-maturity securities .................................. 1,080,234
Available-for-sale securities ................................ 3,046,199
Federal funds sold and Securities purchased under
agreements to resell.......................................... 3,193,800
Loans and lease financing receivables:
Loans and leases, net of unearned income ..................... 35,352,045
LESS: Allowance for loan and lease losses .................... 625,042
LESS: Allocated transfer risk reserve......................... 429
Loans and leases, net of unearned income, allowance,
and reserve ................................................ 34,726,574
Assets held in trading accounts ................................ 1,611,096
Premises and fixed assets (including capitalized leases)........ 676,729
Other real estate owned ........................................ 22,460
Investments in unconsolidated subsidiaries and associated
companies .................................................... 209,959
Customers' liability to this bank on acceptances outstanding ... 1,357,731
Intangible assets .............................................. 720,883
Other assets ................................................... 1,627,267
-----------
Total assets ................................................... $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices .......................................... $26,875,596
Noninterest-bearing .......................................... 11,213,657
Interest-bearing ............................................. 15,661,939
In foreign offices, Edge and Agreement subsidiaries,
and IBFs ................................................... 16,334,270
Noninterest-bearing .......................................... 596,369
Interest-bearing ............................................. 15,737,901
Federal funds purchased and Securities sold under
agreements to repurchase...................................... 1,583,157
Demand notes issued to the U.S. Treasury ....................... 303,000
Trading liabilities ............................................ 1,308,173
Other borrowed money:
With remaining maturity of one year or less .................. 2,383,570
With remaining maturity of more than one year
through three years ........................................ 0
With remaining maturity of more than three years ............. 20,679
Bank's liability on acceptances executed and outstanding ....... 1,377,244
Subordinated notes and debentures .............................. 1,018,940
Other liabilities .............................................. 1,732,792
-----------
Total liabilities .............................................. 52,937,421
-----------
EQUITY CAPITAL
Common stock ................................................... 1,135,284
Surplus ........................................................ 731,319
Undivided profits and capital reserves ......................... 2,721,258
Net unrealized holding gains (losses) on
available-for-sale securities ................................ 1,948
Cumulative foreign currency translation adjustments ............ ( 12,272)
-----------
Total equity capital ........................................... 4,577,537
-----------
Total liabilities and equity capital ........................... $57,514,958
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Alan R. Griffith Directors
J. Carter Bacot
