<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 4841 23-2417713
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
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MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------
COLIN H. HIGGIN, ESQUIRE
ADELPHIA COMMUNICATIONS CORPORATION
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
CARL E. ROTHENBERGER, JR., ESQUIRE
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
21ST FLOOR, 301 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8826
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES TO BE AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
9 1/4% Series B Senior
Notes Due 2002......... $325,000,000 100% $325,000,000 $98,485.00
</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(f)(1).
------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION
CROSS REFERENCE SHEET PURSUANT TO RULE 404(a) AND ITEM 501 OF REGULATION S-K,
SHOWING THE LOCATION IN THE PROSPECTUS OF THE INFORMATION REQUIRED TO BE
INCLUDED THEREIN IN ACCORDANCE WITH PART I OF FORM S-4.
<TABLE>
<CAPTION>
FORM S-4
ITEM NUMBER AND CAPTION LOCATION OR HEADING IN THE PROSPECTUS
---------------------------------------- -------------------------------------------
<S> <C> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus.. Forepart of Registration Statement; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus..................... Inside Front and Outside Back Cover Pages
of Prospectus
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information........... Forepart of Prospectus; Prospectus Summary;
Risk Factors; Selected Consolidated
Financial Data
4. Terms of the Transaction................ Prospectus Summary; The Exchange Offer;
Description of the Notes; Certain Federal
Income Tax Considerations; Risk Factors
5. Pro Forma Financial Information......... *
6. Material Contracts with Company Being
Acquired................................ *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters...................... Plan of Distribution
8. Interests of Named Experts and Counsel.. *
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................. *
10. Information with Respect to S-3
Registrants............................. Incorporation by Reference; Risk Factors;
Recent Developments; Selected Consolidated
Financial Data
11. Incorporation of Certain Information by
Reference............................... Incorporation by Reference
12. Information with Respect to S-2 or S-3
Registrants............................. *
13. Incorporation of Certain Information by
Reference............................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORM S-4
ITEM NUMBER AND CAPTION LOCATION OR HEADING IN THE PROSPECTUS
---------------------------------------- -------------------------------------------
<S> <C> <C>
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants....... *
15. Information with Respect to S-3
Companies............................... *
16. Information with Respect to S-2 or S-3
Companies............................... *
17. Information with Respect to Companies
Other Than S-3 or S-2 Companies......... *
18. Information if Proxies, Consents or
Authorizations are to be Solicited...... *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited
or in an Exchange Offer................. Incorporation by Reference; The Exchange
Offer
</TABLE>
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* Item is omitted because the answer is negative or the item is inapplicable.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOT SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 28, 1997
OFFER TO EXCHANGE
9 1/4% SERIES B SENIOR NOTES DUE 2002
FOR ANY AND ALL OUTSTANDING 9 1/4% SENIOR NOTES DUE 2002
OF
ADELPHIA COMMUNICATIONS CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
Adelphia Communications Corporation ("Adelphia", the "Company", the
"Registrant" or the "Issuer") hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), to exchange
$1,000 principal amount of 9 1/4% Series B Senior Notes due 2002 of the
Registrant (the "New Notes") for each $1,000 principal amount of the issued and
outstanding 9 1/4% Senior Notes due 2002 (the "Old Notes," and collectively
with the New Notes, the "Notes"). Interest on the Senior Notes is payable semi-
annually commencing April 1, 1998 with a final maturity date of October 1,
2002. As of the date of this Prospectus, $325,000,000 aggregate principal
amount of the Old Notes is outstanding. The terms of the New Notes and the Old
Notes are substantially identical in all material respects, except for certain
transfer restrictions and registration rights; and except that holders of Old
Notes are entitled to receive Liquidated Damages (as defined) if (a) the
Registrant fails to file any of the registration statements required by the
Registration Rights Agreement (as defined) on or before the date specified for
such filing, (b) any of such registration statements is not declared effective
by the Securities and Exchange Commission (the "Commission") on or prior to the
date specified for such effectiveness (the "Effectiveness Target Date"), (c)
the Registrant fails to consummate the Exchange Offer within 30 business days
of the Effectiveness Target Date with respect to the Exchange Offer
registration statement, or (d) a shelf registration statement or the
registration statement of which this Prospectus forms a part (the "Exchange
Offer Registration Statement") is declared effective but thereafter ceases to
be effective or usable in connection with resales of Transfer Restricted
Securities (as defined) during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (a) through (d) above is a
"Registration Default"). In the event of a Registration Default, the Registrant
is required to pay Liquidated Damages to each holder of Transfer Restricted
Securities for the period that the Registration Default continues, with respect
to the first 90-day period immediately following the occurrence of such
Registration Default, at a rate of 0.25% per annum on the principal amount of
Transfer Restricted Securities held by such holder. Such interest rate will
increase by an additional 0.25% per annum at the beginning of each subsequent
90-day period up to a maximum aggregate increase of 2.0% per annum until such
Registration Defaults have been cured, at which time the interest rate borne by
the Old Notes will be reduced to the original interest rate. See "Description
of the Notes-Registration Rights; Liquidated Damages."
(Continued on following page)
SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
-----------
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>
The Exchange Offer is being made to satisfy certain obligations of the
Registrant under the Registration Rights Agreement, dated as of September 25,
1997, among the Registrant and the Initial Purchaser (the "Registration Rights
Agreement"). Upon consummation of the Exchange Offer, holders of Old Notes
that were not prohibited from participating in the Exchange Offer and did not
tender their Old Notes will not have any registration rights under the
Registration Rights Agreement with respect to such nontendered Old Notes and,
accordingly, such Old Notes will continue to be subject to the restrictions on
transfer contained in the legend thereon.
Based on interpretations by the staff of the Commission with respect to
similar transactions, including no action letters, the Registrant believes
that the New Notes issued pursuant to the Exchange Offer in exchange for Old
Notes may be offered for resale, resold and otherwise transferred by any
holder of such New Notes (other than any such holder which is an "affiliate"
of the Registrant within the meaning of Rule 405 under the Securities Act of
1933, as amended (the "Securities Act")) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such New Notes are acquired in the ordinary course of such
holder's business, such holder has no arrangement or understanding with any
person to participate in the distribution of such New Notes and neither the
holder nor any other person is engaging in or intends to engage in a
distribution of the New Notes. Each broker-dealer that receives New Notes for
its own account in exchange for Old Notes must acknowledge that it will
deliver a prospectus in connection with any resale of its New Notes. A broker-
dealer who acquired Old Notes directly from the Registrant can not exchange
such Old Notes in the Exchange Offer. 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 the
New Notes received in exchange for the Old Notes acquired by the broker-dealer
as a result of market-making activities or other trading activities. The
Registrant has agreed that they will make this Prospectus available to any
broker-dealer for use in connection with any such resale for a period of 365
days after the Exchange Date (as defined) or, if earlier, until all
participating broker-dealers have so resold. See "Plan of Distribution."
The New Notes will evidence the same debt as the Old Notes and will be
entitled to the benefits of the Indenture (as defined). For a more complete
description of the terms of the New Notes, see "Description of the Notes."
There will be no cash proceeds to the Registrant from the Exchange Offer. The
New Notes will be senior unsecured indebtedness of Adelphia, will rank pari
passu in right of payment with other unsubordinated indebtedness of Adelphia
and senior in right of payment to all future subordinated indebtedness of
Adelphia. The operations of Adelphia are conducted through its subsidiaries
and, therefore, Adelphia is dependent on the earnings and cash flow of and
distributions from its subsidiaries to meet its debt obligations, including
its obligations with respect to the New Notes. Because the assets of its
subsidiaries constitute substantially all of the assets of Adelphia, and
because the subsidiaries will not guarantee the payment of principal of and
interest on the New Notes, the claims of holders of the New Notes effectively
will be subordinated to the claims of creditors of such entities. As of June
30, 1997, on a pro forma basis, after giving effect to the July Offerings, the
Offering and the Hyperion Offerings (all as hereinafter defined) and the
application of net proceeds therefrom, the New Notes would have been
effectively subordinated to $1.4 billion of indebtedness and redeemable
preferred stock of Adelphia's subsidiaries. As of June 30, 1997, the total
indebtedness of Adelphia's subsidiaries to banks and institutions, on a
consolidated basis, aggregated $1.5 billion.
The Old Notes were originally issued and sold on September 25, 1997 in an
offering of $325,000,000 aggregate principal amount (the "Offering," as
defined). The Offering was exempt from registration under the Securities Act
in reliance upon the exemptions provided by Rule 144A and Section 4(2) of the
Securities Act. Accordingly, the Old Notes may not be reoffered, resold or
otherwise pledged, hypothecated or transferred in the United States unless so
registered or unless an exemption from the registration requirements of the
Securities Act and applicable state securities laws is available.
The Registrant has not entered into any arrangement or understanding with
any person to distribute the New Notes to be received in the Exchange Offer,
and to the best of the Registrant's information and belief, each
2
<PAGE>
person participating in the Exchange Offer is acquiring the New Notes in its
ordinary course of business and has no arrangement or understanding with any
person to participate in the distribution of the New Notes to be received in
the Exchange Offer. Any person participating in the Exchange Offer who does
not acquire the Exchange Notes in the ordinary course of business: (i) cannot
rely on the above referenced no action letters; (ii) cannot tender its Old
Notes in the Exchange Offer; and (iii) must comply with the registration and
prospectus delivery requirements of the Securities Act.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange. However, the Exchange Offer
is subject to certain customary conditions which may be waived by the Company.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
1997, unless extended (as it may be so extended, the "Expiration Date"),
provided that the Exchange Offer shall not be extended beyond 30 business days
from the date of this Prospectus. The date of acceptance for exchange of the
Old Notes for the New Notes (the "Exchange Date") will be the first business
day following the Expiration Date or as soon as practicable thereafter. Old
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date; otherwise such tenders are irrevocable.
Prior to this Exchange Offer, there has been no public market for the Notes.
The Old Notes have traded on the PORTAL Market. If a market for the New Notes
should develop, the New Notes could trade at a discount from their initial
offering price. The Company does not intend to apply for listing of the New
Notes on any securities exchange or in any automated quotation system. There
can be no assurance that an active trading market for the New Notes will
develop.
----------------
AVAILABLE INFORMATION
The Company has filed with the Commission in Washington, D.C. a Registration
Statement on Form S-4 under the Securities Act with respect to the Exchange
Offer. This Prospectus, which is part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Exchange Offer, reference is made to such Registration
Statement and the exhibits and schedules filed as part thereof. The
Registration Statement and the exhibits and schedules thereto filed with the
Commission may be inspected without charge at the Public Reference Section of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and will also be available for inspection and copying
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048, and the Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or any
portion of the Registration Statement may be obtained from the Public
Reference Section of the Commission upon payment of certain prescribed fees.
Electronic registration statements made through the Electronic Data Gathering,
Analysis, and Retrieval system are publicly available through the Commission's
Web site (http://www.sec.gov), which is maintained by the Commission and which
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE REGISTRANT ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES LAWS OF SUCH JURISDICTION.
3
<PAGE>
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") are
incorporated herein by reference: (a) Annual Report on Form 10-K for the
fiscal year ended March 31, 1997 which incorporates, in Items 7 and 8 to such
Form 10-K, portions of Amendment No. 2 to Registration Statement No. 333-19327
of Olympus Communications, L.P. and Olympus Capital Corporation on Form S-4
(the "Form 10-K"); (b) Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997 (the "Form 10-Q"); (c) Adelphia's amendment to Form 10-K filed
July 29, 1997 (the "Form 10-K/A"); (d) Adelphia's definitive proxy statement
dated September 8, 1997, with respect to the Annual Meeting held September 29,
1997; (e) Adelphia's Current Reports on Form 8-K for the events dated May 1,
1997, June 12, 1997, June 23, 1997, July 7, 1997, July 24, 1997, August 27,
1997, September 19, 1997 and September 25, 1997; and (f) the descriptions of
the Company's Common Stock contained in the registration statements filed
under Section 12(g) of the Exchange Act, including any amendments or reports
for the purpose of updating such descriptions.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the respective date of filing of each such
document. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other 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.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
MICHAEL C. MULCAHEY, DIRECTOR OF ACCOUNTING AND ASSISTANT TREASURER, ADELPHIA
COMMUNICATIONS CORPORATION, MAIN AT WATER STREET, COUDERSPORT, PA 16915,
TELEPHONE NUMBER 814-274-9830. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN 5 BUSINESS DAYS PRIOR TO
THE EXPIRATION OF THE EXCHANGE OFFER.
4
<PAGE>
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the more detailed
information and financial statements appearing in this Prospectus or
incorporated by reference herein. The Private Securities Litigation Reform Act
of 1995 provides a "safe harbor" for forward-looking statements. Certain
information included or incorporated by reference in this Prospectus, including
Management's Discussion and Analysis of Financial Condition and Results of
Operations, is forward-looking, such as information relating to the effects of
future regulation, future capital commitments and the effects of competition.
Such forward-looking information involves important risks and uncertainties
that could significantly affect expected results in the future from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. These risks and uncertainties include, but are not limited to,
uncertainties relating to economic conditions, acquisitions and divestitures,
government and regulatory policies, the pricing and availability of equipment,
materials, inventories and programming, technological developments and changes
in the competitive environment in which the Company operates. Persons
participating in this Exchange Offer are cautioned that such statements are
only predictions and that actual events or results may differ materially. In
evaluating such statements, persons participating in this Exchange Offer should
specifically consider the various factors which could cause actual events or
results to differ materially from those indicated by such forward looking
statements. Persons participating in this Exchange Offer should carefully
consider the factors set forth herein under the caption "Risk Factors."
THE COMPANY
Adelphia Communications Corporation is the seventh-largest cable television
operator in the United States. As of June 30, 1997, cable television systems
owned or managed by the Company (the "Systems") in the aggregate passed
2,707,625 homes and served 1,907,715 basic subscribers. John J. Rigas, the
Chairman, President, Chief Executive Officer and founder of Adelphia, has owned
and operated cable television systems since 1952.
The Company's owned cable systems (the "Company Systems") are located in ten
states and are organized into seven regional clusters: Western New York,
Virginia, Western Pennsylvania, New England, Eastern Pennsylvania, Ohio and
Coastal New Jersey. The Company Systems are located primarily in suburban areas
of large and medium-sized cities within the 50 largest television markets. As
of June 30, 1997, the Company Systems passed 1,610,384 homes and served
1,176,846 basic subscribers.
The Company also provides, for a fee, management and consulting services to
certain partnerships and certain corporations engaged in the ownership and
operation of cable television systems (the "Managed Partnerships"). John J.
Rigas and certain members of his immediate family, including entities they own
or control (collectively the "Rigas Family") have substantial ownership
interests in the Managed Partnerships. As of June 30, 1997, cable systems (the
"Managed Systems") owned by the Managed Partnerships passed 426,529 homes and
served 303,428 basic subscribers.
In addition to its wholly owned cable operations, Adelphia has other
significant investments, including:
OLYMPUS COMMUNICATIONS, L.P.
The Company owns a 50% voting interest and nonvoting Preferred Limited
Partnership interests entitling the Company to a 16.5% preferred return in
Olympus Communications, L.P. ("Olympus"). Olympus is a joint venture limited
partnership between the Company and subsidiaries of FPL Group, Inc. (together
with its subsidiaries, "FPL Group"). FPL Group is one of the largest public
utility holding companies in the United States supplying, through its principal
subsidiary, electric service throughout most of the east and lower west
5
<PAGE>
coasts of Florida. Olympus operates the largest contiguous cable system in
Florida and is located in some of the fastest-growing markets in Florida. As of
June 30, 1997, the Olympus systems passed 670,712 homes and served 427,441
basic subscribers. Olympus is not a subsidiary of Adelphia or FPL Group. The
Company's investment in Olympus is accounted for under the equity method of
accounting. On November 12, 1996, Olympus realized proceeds of $195,500,000
upon the issuance of $200,000,000 in aggregate principal amount of 10 5/8%
Senior Notes due November 15, 2006. The net proceeds from such offering were
used to reduce outstanding bank borrowings of Olympus' subsidiaries.
HYPERION TELECOMMUNICATIONS, INC.
The Company owns an 88% interest in Hyperion Telecommunications, Inc.
("Hyperion"), a leading competitive local exchange carrier ("CLEC") that
designs, constructs, operates and manages state-of-the-art, fiber optic
networks and facilities. Hyperion operates one of the largest CLECs in the
United States based upon route miles and buildings connected. As of June 30,
1997, Hyperion managed and operated 17 networks (excluding five under
construction), which served 35 cities and had approximately 3,640 route miles,
connecting approximately 1,603 buildings. Hyperion offers switched services,
including local dial tone, in 13 markets and expects to begin offering local
dial tone in the remainder of its operating networks by the end of 1997.
Hyperion is consolidated in Adelphia's financial results and is currently an
unrestricted subsidiary of Adelphia for purposes of Adelphia's indentures. On
April 15, 1996, Hyperion realized net proceeds of approximately $168,600,000
upon the issuance of $329,000,000 in aggregate principal amount of 13% Senior
Discount Notes (the "Hyperion Senior Notes") due April 15, 2003 and 329,000
warrants to purchase an aggregate of 613,427 shares of common stock of Hyperion
expiring April 1, 2001. Net proceeds from such offering were used to repay a
portion of outstanding indebtedness owed to Adelphia and to fund capital
expenditures, working capital requirements, operating losses, pro rata
investments in operating companies and pro rata equity investments. Hyperion
also recently completed offerings of $250,000,000 in aggregate principal amount
of 12 1/4% Senior Secured Notes due 2004 and $200,000,000 aggregate liquidation
preference of 12 7/8% Senior Exchangeable Redeemable Preferred Stock due 2007.
See "--Recent Developments."
EMPIRE SPORTS NETWORK AND BUFFALO SABRES NHL FRANCHISE AND MARINE MIDLAND ARENA
Empire Sports Network ("Empire") is a majority-owned subsidiary of Adelphia
operating a regional sports television network serving western and central New
York. Empire's most popular programming is the Buffalo Sabres (the "Sabres")
NHL team games and related coverage. Adelphia has made $31,000,000 of preferred
equity investments and loans to Niagara Frontier Hockey, L.P. ("Niagara L.P.")
which holds the NHL Sabres franchise. The Company's investment in Niagara L.P.
is accounted for under the cost method. Niagara L.P. also holds a two-thirds
interest in the Marine Midland Arena complex, a recently opened $130,000,000
sports and entertainment facility capable of seating 18,500 people with 60
luxury suites. The complex holds a right of first refusal for hosting all arena
events in Buffalo.
Adelphia was incorporated in Delaware on July 1, 1986 for the purpose of
reorganizing five cable television companies, then principally owned by the
Rigas Family, into a holding company structure in connection with the initial
public offering of Adelphia's Class A Common Stock. The Company's executive
offices are located at Main at Water Street, Coudersport, Pennsylvania 16915,
and its telephone number is (814) 274-9830.
RECENT DEVELOPMENTS
Adelphia Offering of Senior Notes Due 2002. On September 25, 1997, Adelphia
announced the sale of $325,000,000 aggregate principal amount of 9 1/4% Senior
Notes due 2002 (the "Notes") in a private placement exempt from registration
(the "Offering"). The Notes are the subject of the within described Exchange
Offer. Of the net proceeds of approximately $321,250,000 from the Offering, at
least $208,000,000 will be used by Adelphia to purchase, redeem or otherwise
retire a portion of the outstanding 12 1/2% Senior Notes due 2002 of Adelphia,
approximately $12,000,000 will be used for a redemption premium and the
remainder will be
6
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contributed to Adelphia subsidiaries and used to repay revolving credit
facilities of such subsidiaries, all of which may be reborrowed and used for
the general corporate purposes of such subsidiaries.
Hyperion Offering of Senior Exchangeable Redeemable Preferred Stock. On
October 9, 1997, Hyperion issued $200,000,000 aggregate liquidation preference
of 12 7/8% Senior Exchangeable Redeemable Preferred Stock due 2007 (the "Senior
Preferred Stock") primarily to qualified institutional investors in a private
placement (the "Hyperion Preferred Stock Offering"). The net proceeds of
approximately $194,500,000 from this issuance will be used to fund the
acquisition of increased ownership interests in certain of Hyperion's networks,
for capital expenditures, including the construction and expansion of new and
existing networks, and for general corporate and working capital purposes of
Hyperion. Pending such uses, the net proceeds will be invested in cash, short-
term liquid investments and other cash equivalents. Through October 15, 2002,
dividends on the Senior Preferred Stock may be paid, at Hyperion's option, in
cash or additional shares of Senior Preferred Stock.
Hyperion Offering of Senior Secured Notes. On August 27, 1997, Hyperion and
the Company announced the sale of $250,000,000 aggregate principal amount of 12
1/4% Senior Secured Notes due 2004 of Hyperion (the "Hyperion Senior Secured
Notes") in a private placement exempt from registration (the "Hyperion Note
Offering" and, together with the Hyperion Preferred Stock Offering, the
"Hyperion Offerings"). Hyperion secured the Hyperion Senior Secured Notes
through the pledge of the common stock of certain of its wholly-owned
subsidiaries. Of the net proceeds of the Hyperion Note Offering of
approximately $243,300,000, $83,500,000 was placed in an escrow account to
provide for payment in full when due of the first six scheduled interest
payments on the Hyperion Senior Secured Notes, with the remainder of the net
proceeds to be used to fund the acquisition of increased ownership interests in
certain of its networks, the continued expansion of its networks, and working
capital.
$150 Million Adelphia Offering of Notes and $150 Million Adelphia Offering of
Exchangeable Preferred Stock. On July 7, 1997, Adelphia announced the sale of
(i) $150,000,000 aggregate principal amount of 10 1/2% Senior Notes due 2004 to
institutional investors in reliance on Rule 144A, and (ii) 13% Series A
Cumulative Exchangeable Preferred Stock (the "Exchangeable Preferred Stock")
with an aggregate liquidation preference of $150,000,000 to institutional
investors in reliance on Rule 144A and to an affiliate of the family of John
Rigas, Chairman of Adelphia (such offerings collectively, with the Convertible
Preferred Stock Offering (as defined), the "July Offerings"). The Rigas family
affiliate subsequently sold its Exchangeable Preferred Stock in a private
transaction.
Adelphia also announced the sale of perpetual Series C Cumulative Convertible
Preferred Stock (the "Convertible Preferred Stock") with an aggregate
liquidation preference of $100,000,000 in a private placement to the Rigas
family affiliate and Telesat Cablevision, Inc. ("Telesat"), a wholly owned
subsidiary of FPL Group, Inc., a New York Stock Exchange company (the
"Convertible Preferred Stock Offering"). The Convertible Preferred Stock
accrues dividends at the rate of 8 1/8% of the liquidation preference per
annum, and is convertible at $8.48 per share into an aggregate of 11,792,450
shares of Class A Common Stock of Adelphia. The Convertible Preferred Stock is
redeemable at the option of Adelphia after three years from the date of
issuance at a premium declining to par. The net proceeds of $393,500,000 from
the July Offerings were used to repay Notes of Subsidiaries to institutions of
$284,000,000 plus a prepayment premium of approximately $11,000,000 and to
repay Notes of Subsidiaries to banks of approximately $98,500,000.
Acquisition of Cable Systems. On June 20, 1997, Adelphia acquired cable
systems from Booth Communications Company (the "Booth Acquisition") serving
25,800 subscribers in the Virginia cities of Blacksburg and Salem. These
systems were acquired for an aggregate purchase price of $54,500,000 comprised
of 3,571,428 shares of Adelphia's Class A Common Stock and $29,500,000 cash.
The acquisition was accounted for under the purchase method of accounting.
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Sale of Interest in Page Call. On June 11, 1997, the Company announced its
agreement to sell its 49.9% ownership in Page Call, Inc. for a total of
$16,500,000 payable in Series A Convertible Preferred Stock of Arch
Communications Group, Inc. and cash. The Company expects to complete this
transaction in 1997, subject to regulatory approvals.
TCI Partnership. On June 6, 1997, Adelphia signed a non-binding letter of
intent to establish a partnership into which Tele-Communications, Inc. ("TCI")
will contribute its cable systems in Buffalo, New York; Erie, Pennsylvania; and
Ashtabula and Lake County, Ohio, totaling 166,000 subscribers, and Adelphia
will contribute its Western New York and Lorain, Ohio systems, totaling 298,000
subscribers. Upon closing of the transaction, TCI will hold a minority interest
in the partnership. Adelphia will manage the partnership and expects to
consolidate the partnership's results for financial reporting purposes. The
venture will serve approximately 464,000 customers. The parties are negotiating
definitive documents for this transaction.
Exchange of Cable Systems with Time Warner Cable. On May 20, 1997, Adelphia
and its affiliates and Time Warner Cable companies entered into agreements
involving a trade of cable systems in seven states covering approximately
250,000 subscribers, an exchange of interests in four Competitive Local
Exchange Carrier ("CLEC") networks in New York state, and cash. Adelphia will
exchange its systems serving 67,600 subscribers primarily in the Mansfield,
Ohio, area for systems owned by Time Warner Cable companies serving 72,400
subscribers adjacent to systems owned or managed by Adelphia in Virginia, New
England and New York. On September 12, 1997, Hyperion consummated with a Time
Warner company the exchange of interests in four CLEC networks in New York. In
this transaction, Hyperion increased its interests in its Buffalo and Syracuse
CLEC networks to 60% and 100%, respectively, and eliminated its interests in
the Albany and Binghamton networks. Certain affiliates managed by Adelphia will
exchange systems serving 49,700 subscribers in Syracuse, New York, and
Henderson, North Carolina, for Time Warner cable systems serving 57,900
subscribers adjacent to systems owned or managed by Adelphia in western
Pennsylvania and Virginia. Consummation of the remainder of this transaction is
subject to certain closing conditions and regulatory approval.
THE EXCHANGE OFFER
Securities Offered.......... Up to $325,000,000 aggregate principal amount
of 9 1/4% Series B Senior Notes due 2002 of
the Company (the "New Notes," and
collectively with the Old Notes, the
"Notes"). The terms of the New Notes and the
Old Notes are substantially identical in all
material respects, except for certain
transfer restrictions, registration rights
and liquidated damages ("Liquidated Damages")
for Registration Defaults relating to the Old
Notes which will not apply to the New Notes.
See "Description of the Notes."
The Exchange Offer.......... The Registrant is offering to exchange $1,000
principal amount of New Notes for each $1,000
principal amount of Old Notes. See "The
Exchange Offer" for a description of the
procedures for tendering Old Notes. The
Exchange Offer satisfies the registration
obligations of the Registrant under the
Registration Rights Agreement. Upon
consummation of the Exchange Offer, holders
of Old Notes that were not prohibited from
participating in the Exchange Offer and did
not tender their Old Notes will not have any
registration rights under the Registration
Rights Agreement with respect to such
nontendered Old Notes and, accordingly, such
Old Notes will continue to be subject to the
restrictions on transfer contained in the
legend thereon.
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Tenders, Expiration Date;
Withdrawal; Exchange Date..
The Exchange Offer will expire at 5:00 p.m.,
New York City time, on , 1997, or such
later date and time to which it is extended
(as it may be so extended, the "Expiration
Date"), provided that the Exchange Offer
shall not be extended beyond 30 business days
from the date of this Prospectus. Tender of
Old Notes pursuant to the Exchange Offer may
be withdrawn and retendered at any time prior
to the Expiration Date. Any Old Notes not
accepted for exchange for any reason will be
returned without expense to the tendering
holder as promptly as practicable after the
expiration or termination of the Exchange
Offer. The date of acceptance for exchange of
all Old Notes properly tendered and not
withdrawn for New Notes (the "Exchange Date")
will be the first business day following the
Expiration Date or as soon as practicable
thereafter.
Accrued Interest on the New Each New Note will bear interest from the
Notes....................... most recent date to which interest has been
paid on the Old Note or, if no such payment
has been made, from September 25, 1997.
Federal Income Tax The Exchange Offer will not result in any
Considerations.............. income, gain or loss to the holders of Notes
or the Company for federal income tax
purposes. See "Certain Federal Income Tax
Considerations."
Use of Proceeds............. There will be no proceeds to the Company from
the exchange of New Notes for the Old Notes
pursuant to the Exchange Offer.
Exchange Agent.............. Bank of Montreal Trust Company, the Trustee
under the Indenture, is serving as exchange
agent (the "Exchange Agent") in connection
with the Exchange Offer.
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CONSEQUENCES OF EXCHANGING OR FAILURE TO EXCHANGE OLD NOTES PURSUANT TO THE
EXCHANGE OFFER
Generally, holders of Old Notes (other than any holder who is an "affiliate"
of the Registrant within the meaning of Rule 405 under the Securities Act) who
exchange their Old Notes for New Notes pursuant to the Exchange Offer may offer
their New Notes for resale, resell their New Notes, and otherwise transfer
their New Notes without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided such New Notes are acquired
in the ordinary course of the holder's business, such holders have no
arrangement with any person to participate in a distribution of such New Notes
and neither the holder nor any other person is engaging in or intends to engage
in a distribution of the New Notes. A broker-dealer who acquired Old Notes
directly from the Registrant can not exchange such Old Notes in the Exchange
Offer. Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes must acknowledge that it will deliver a prospectus in
connection with any resale of its New Notes. See "Plan of Distribution." To
comply with the securities laws of certain jurisdictions, it may be necessary
to qualify for sale or register the New Notes prior to offering or selling such
New Notes. The Company is required, under the Registration Rights Agreement, to
register the New Notes in any jurisdiction requested by the holders, subject to
certain limitations. Upon consummation of the Exchange Offer, holders that were
not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes, and accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, Old Notes may not be offered or
sold, unless registered under the Securities Act and applicable state
securities laws. See "The Exchange Offer--Consequences of Failure to Exchange."
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SUMMARY DESCRIPTION OF THE NOTES
Issuer................................ Adelphia Communications Corporation
Securities Offered.................... $325,000,000 principal amount of 9
1/4% Series B Senior Notes due 2002
(the "New Notes," and collectively
with the Old Notes, the "Notes").
The terms of the New Notes and the
Old Notes are substantially
identical in all material respects,
except for certain transfer
restrictions, registration rights
and Liquidated Damages for
Registration Defaults relating to
the Old Notes which will not apply
to the New Notes. See "Description
of the Notes."
Maturity Date......................... The Notes will mature on October 1,
2002.
Interest Payment Dates................ April 1 and October 1 each year
commencing April 1, 1998.
Redemption............................ The Notes will not be redeemable
prior to maturity and will not be
subject to any mandatory redemption
or sinking fund payments.
Ranking............................... The Notes are unsecured
indebtedness of Adelphia ranking
pari passu with other
unsubordinated indebtedness of
Adelphia and senior in right of
payment to any future subordinated
indebtedness of Adelphia. The
operations of Adelphia are
conducted through Adelphia's
subsidiaries, and therefore,
Adelphia is dependent on the
earnings and cash flow of and
distributions from its subsidiaries
to meet its debt obligations,
including its obligations with
respect to the Notes. Because the
assets of its subsidiaries and
other investments constitute
substantially all of the assets of
Adelphia, and because those
subsidiaries and other investments
will not guarantee the payment of
principal of and interest on the
Notes, the claims of holders of the
Notes effectively will be
subordinated to the claims of
creditors of such entities. As of
June 30, 1997, on a pro forma
basis, after giving effect to the
July Offerings, the Offering and
the Hyperion Offerings and the
application of the net proceeds
therefrom, the Notes would have
been effectively subordinated to
$1.4 billion of indebtedness and
redeemable preferred stock of
Adelphia's subsidiaries. As of June
30, 1997, the total indebtedness of
Adelphia's subsidiaries to banks
and institutions, on a consolidated
basis, aggregated $1.5 billion and
total trade payables as of such
date were $53.6 million. The
Company's ability to access the
cash flow of its subsidiaries is
subject to
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significant contractual
restrictions. In addition, Olympus
has substantial leverage. See "Risk
Factors--Holding Company Structure;
Restrictive Covenants" and
"Description of the Notes."
Certain Covenants..................... The Indenture pursuant to which the
Notes were or will be issued (the
"Indenture") contains certain
restrictions on, among other
things, the incurrence of
indebtedness, mergers and sales of
assets, a change of control, the
payment of dividends on, or the
repurchase of, capital stock of
Adelphia and certain other
restricted payments by Adelphia and
its restricted subsidiaries and
certain transactions with and
investments in affiliates. The
Indenture will permit Adelphia's
subsidiaries to incur substantial
additional indebtedness.
Registration Rights................... Adelphia has entered into a
registration rights agreement with
the Initial Purchaser (the
"Registration Rights Agreement")
pursuant to which Adelphia agreed
to file a registration statement
(the "Exchange Offer Registration
Statement") with respect to an
offer to exchange the Old Notes for
a new issue of debt securities of
Adelphia (the "Exchange Notes")
registered under the Securities
Act, with terms substantially
identical to those of the Old
Notes. See "Description of the
Notes--Registration Rights;
Liquidated Damages."
Change of Control..................... In the event of a Change of Control
(as defined herein), the Holders of
the Notes will have the right to
require the Company to purchase
their Notes at a price equal to
100% of the aggregate principal
amount thereof, plus accrued and
unpaid interest and Liquidated
Damages thereon, if any, to the
date of purchase. There can be no
assurance that the Company will
have adequate financial resources
to effect a required repurchase of
the Notes upon a Change in Control.
The Company's failure to make a
required repurchase of the Notes
upon a Change in Control would be
an Event of Default under the
Indenture.
RISK FACTORS
Prospective participants in the Exchange Offer should consider all of the
information contained in this Prospectus in connection with the Exchange Offer.
In particular, prospective participants should consider the factors set forth
herein under "Risk Factors."
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<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating the
Company and its business in connection with the Exchange Offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
Upon consummation of the Exchange Offer, holders of Old Notes that were not
prohibited from participating in the Exchange Offer and did not tender their
Old Notes will not have any registration rights under the Registration Rights
Agreement with respect to such nontendered Old Notes and, accordingly, such
Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, the Old Notes may not be offered
or sold, unless registered under the Securities Act and applicable state
securities laws, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. The
Company does not intend to register the Old Notes under the Securities Act.
Based on interpretations by the staff of the Commission with respect to
similar transactions, the Company believes that the New Notes issued pursuant
to the Exchange Offer may be offered for resale, resold and otherwise
transferred by any holder of such New Notes (other than any such holder which
is an "affiliate" of the Registrant 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 Notes are
acquired in the ordinary course of such holder's business, such holder has no
arrangement or understanding with any person to participate in the
distribution of such New Notes and neither the holder nor any other person is
engaging in or intends to engage in a distribution of the New Notes. A broker-
dealer who acquired Old Notes directly from the Registrant can not exchange
such Old Notes in the Exchange Offer. Each broker-dealer that receives New
Notes for its own account in exchange for Old Notes must acknowledge that it
will deliver a prospectus in connection with any resale of its New Notes. 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 the New Notes received in exchange for
the Old Notes acquired by the broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that it will
make this Prospectus available to any broker-dealer for use in connection with
any such resale for a period of 365 days after the Exchange Date or, if
earlier, until all participating broker-dealers have so resold. See "Plan of
Distribution." The New Notes may not be offered or sold unless they have been
registered or qualified for sale under applicable state securities laws or an
exemption from registration or qualification is available and is complied
with. The Registrant is required, under the Registration Rights Agreement, to
register the New Notes in any jurisdiction requested by the holders, subject
to certain limitations.
SUBSTANTIAL LEVERAGE
The Company is highly leveraged and has incurred substantial indebtedness to
finance acquisitions and expansion of its operations and, to a lesser extent,
for investments in and advances to affiliates. At June 30, 1997, the Company's
total indebtedness aggregated approximately $2,637,896,000, which included
approximately $1,286,697,000 of subsidiary bank and institutional debt,
$196,396,000 of Hyperion debt and approximately $1,154,803,000 of indebtedness
of the parent company. The Company's total debt has varying maturities to
2007, including an aggregate of approximately $900,645,000 maturing on or
prior to March 31, 2002. The Company has maintained its public long-term debt
at the holding company level and unrestricted subsidiaries while borrowing in
the private debt markets (e.g., bank and insurance company debt) through the
Company's wholly-owned subsidiaries. The Company's subsidiary financings are
effected through separate borrowing groups, and substantially all of the
indebtedness in these borrowing groups is non-recourse to Adelphia. The
subsidiary credit arrangements have varied revolving credit and term loan
periods and contain separately-negotiated covenants relating to, among other
things, cross-defaults and the incurrence of additional debt for each
borrowing group. In addition, Olympus has substantial leverage. The high level
of the Company's indebtedness will have important consequences to holders of
the Notes, including: (i) a substantial portion of the Company's cash flow
from
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<PAGE>
operations must be dedicated to debt service and will not be available for
general corporate purposes or for capital improvements; (ii) the Company's
ability to obtain additional debt financing in the future for working capital,
capital expenditures, acquisitions or for capital improvements may be limited;
and (iii) the Company's level of indebtedness could limit its flexibility in
reacting to changes in the industry and economic conditions generally. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K and the Form 10-Q.
NET LOSSES AND STOCKHOLDERS' DEFICIENCY
The total stockholders' deficiency at March 31, 1997 and June 30, 1997 was
$1,253,881,000 and $1,273,945,000, respectively. The stockholders' deficiency
generally has resulted from the Company's reported net losses which have been
caused primarily by high levels of depreciation and amortization and interest
expense. The Company reported net losses of approximately $106,284,000,
$119,894,000 and $130,642,000, for the years ended March 31, 1995, 1996 and
1997, respectively, and $26,818,000 and $42,361,000, for the quarters ended
June 30, 1996 and 1997, respectively. The Company expects to continue to incur
significant net losses for the next several years. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
the Form 10-K and the Form 10-Q.
For the years ended March 31, 1996 and 1997 and for the quarters ended June
30, 1996 and 1997, respectively, the Company's earnings were insufficient to
cover its combined fixed charges and preferred stock dividends by $78,189,000
and $61,848,000, respectively and $10,368,000 and $23,340,000, respectively.
However, such amounts reflect non-cash charges totalling $127,319,000 and
$165,426,000, respectively, and $33,473,000 and $40,591,000, respectively,
consisting of depreciation, amortization, and non-cash interest expense on
certain indebtedness of the Company. On a pro forma basis, after giving effect
to the July Offerings, the Offering and the Hyperion Offerings, the Company's
earnings were insufficient to cover its combined fixed charges and preferred
stock dividends by $120,233,000 and $37,586,000 for the year ended March 31,
1997 and for the three months ended June 30, 1997, respectively. Historically,
the Company's cash generated from operating activities and borrowings has been
sufficient to meet its requirements for debt service, working capital, capital
expenditures, and investments in and advances to affiliates, and the Company
has depended on the availability of additional borrowings to meet its
liquidity requirements. The Company believes that it will continue to generate
cash and obtain financing sufficient to meet such requirements. However, the
Company's ability to incur additional indebtedness is limited by covenants in
its indentures and its subsidiary credit agreements. Adelphia expects that it
will be required to refinance the Notes prior to their maturity. Although in
the past the Company has been able both to refinance its indebtedness and to
obtain new financing, there can be no assurance that the Company would be able
to do so in the future or that, if the Company were able to do so, the terms
available would be favorable to the Company. In the event that the Company
were unable to refinance its indebtedness or obtain new financing under these
circumstances, the Company would likely have to consider various options such
as the sale of certain assets to meet its required debt service, negotiation
with its lenders to restructure applicable indebtedness or other options
available to it under applicable law. There can be no assurance that any such
options would yield net proceeds sufficient to repay or retire the Notes in
full. See "Selected Consolidated Financial Data" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Form 10-
K and the Form 10-Q.
HOLDING COMPANY STRUCTURE; RESTRICTIVE COVENANTS
As a holding company, Adelphia holds no significant assets other than its
investments in and advances to its subsidiaries and other investments.
Adelphia's ability to make interest and principal payments when due to holders
of debt of Adelphia is dependent upon the receipt of sufficient funds from its
subsidiaries or other investments. Under the terms of various debt agreements
between the Adelphia subsidiaries and other investments and their respective
lending institutions, upon the occurrence of an event of default (including
certain cross-defaults resulting from defaults under Adelphia's debt
agreements) or unless certain financial performance tests are met, the
Adelphia subsidiaries and other investments are restricted from distributing
funds to Adelphia.
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<PAGE>
The Indenture governing the Notes will not restrict the Company's subsidiaries
or other investments from contractually restricting their ability to pay
dividends to the Company in the future. In addition, because Adelphia's
subsidiaries and other investments do not guarantee the payment of principal
of and interest on debt of Adelphia, the claims of holders of such debt
effectively will be subordinated to the claim of creditors of such entities.
At June 30, 1997, the total amount of long-term debt of such subsidiaries was
$1,483,093,000. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Form 10-K and the Form 10-Q and
"Description of the Notes."
The agreements governing the bank debt of the Company's subsidiaries (the
"Subsidiary Bank Agreements") contain, among other covenants, requirements
that Adelphia's subsidiaries maintain specified financial ratios, including
maximum leverage and minimum interest coverage. The ability of a subsidiary to
comply with such provisions may be affected by events that are beyond
Adelphia's control. The breach of any of these covenants could result in a
default by a subsidiary under its Subsidiary Bank Agreement. In the event of
any such default, lenders party to that Subsidiary Bank Agreement could elect
to declare all amounts borrowed under that Subsidiary Bank Agreement, together
with accrued interest and other fees, to be due and payable. If the
indebtedness under a Subsidiary Bank Agreement were to be accelerated, all
indebtedness outstanding under such Subsidiary Bank Agreement would be
required to be paid in full before such subsidiary would be permitted to
distribute any assets or cash to Adelphia. There can be no assurance that the
assets of Adelphia and its subsidiaries would be sufficient to repay all
borrowings under the Subsidiary Bank Agreements and indebtedness owed to the
other creditors of such subsidiaries in full. In addition, as a result of
these covenants, the ability of Adelphia's subsidiaries to respond to changing
business and economic conditions and to secure additional financing, if
needed, may be significantly restricted, and Adelphia may be prevented from
engaging in transactions that might otherwise be considered beneficial to
Adelphia.
POTENTIAL CONFLICTS OF INTEREST
The Rigas Family holds substantially all of Adelphia's Class B Common Stock
and approximately 89% of the combined voting power of both classes of
Adelphia's Common Stock and has the power to elect seven of eight members of
Adelphia's Board of Directors. John J. Rigas and the other executive officers
of Adelphia (including other members of the Rigas Family) hold direct and
indirect ownership interests in the Managed Partnerships, which are managed by
the Company for a fee. Subject to the restrictions contained in the Business
Opportunity Agreement regarding future acquisitions, Rigas Family members and
the executive officers are free to continue to own these interests and acquire
additional interests in cable television systems. Such activities could
present a conflict of interest with the Company in the allocation of
management time and resources of the executive officers. In addition, there
have been and will continue to be transactions between the Company and the
executive officers or other entities in which the executive officers have
ownership interests or with which they are affiliated. The Indenture governing
the Notes and the indentures under which the 9 7/8% Debentures, 11 7/8%
Debentures, 9 1/2% Notes, 12 1/2% Notes, 10 1/4% Notes, 9 7/8% Notes and 10
1/2% Notes of Adelphia were issued (the "Senior Notes Indentures") contain
covenants that place certain restrictions on transactions between the Company
and its affiliates. See "Certain Relationships and Related Transactions" in
the Form 10-K and "Description of the Notes--Covenants--Limitation on
Transactions with Affiliates."
COMPETITION
The cable television systems owned by the Company compete with other
communications and entertainment media as well as other means of video
distribution including Direct Broadcast Satellite Systems ("DBS") and
Multichannel Multipoint Distribution Systems ("MMDS"). Several companies
recently have launched, or have announced their intention to launch, DBS
services that compete with the Company for multichannel video entertainment
customers. In addition, some of the Regional Bell Operating Companies (the
"RBOCs") and other local telephone companies are in the process of entering
the video-to-home business and several have expressed their intention to enter
the video-to-home business. In addition, some RBOCs and local telephone
companies have in place facilities which are capable of delivering cable
television service.
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In addition, the Telecommunications Act of 1996 (the "1996 Act") has
repealed the cable/telephone cross-ownership ban, and telephone companies will
now be permitted to provide cable television service within their service
areas. Certain of such potential service providers have greater financial
resources than the Company and in the case of local exchange carriers seeking
to provide cable service within their service areas, have an installed plant
and switching capabilities, any of which could give them competitive
advantages with respect to cable television operators such as the Company. The
Company cannot predict either the extent to which competition will materialize
or, if such competition materializes, the extent of its effect on the Company.
See "Business--Competition" in the Form 10-K and "Management's Discussion and
Analysis of Financial Conditions and Results of Operations" in the Form 10-K
and the Form 10-Q.
The Company also faces competition from other communications and
entertainment media, including conventional off-air television broadcasting
services, newspapers, movie theaters, live sporting events and home video
products. The Company cannot predict the extent to which competition may
affect the Company. See "Business--Competition" and "--Legislation and
Regulation" in the Form 10-K and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Regulatory and Competitive
Matters" in the Form 10-K and the Form 10-Q.
NEED FOR ADDITIONAL FINANCING
The Company's business requires substantial investment on a continuing basis
to finance capital expenditures and related expenses for, among other things,
upgrade of the Company's cable plant (including the need to make cable system
upgrades mandated by franchise authorities), the offering of new services and
the servicing, repayment or refinancing of its indebtedness. The Company will
require significant additional financing, through debt and/or equity
issuances, to meet its capital expenditure plans and to pay its debt
obligations. There can be no assurance that Adelphia 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 "Business--Technological
Developments" in the Form 10-K and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form 10-K and the Form
10-Q.
REGULATION IN THE TELECOMMUNICATIONS INDUSTRY
The cable television industry is subject to extensive regulation at the
federal, state and local levels, and many aspects of such regulation are
currently the subject of judicial proceedings and administrative or
legislative proposals. The Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act") significantly expanded the
scope of cable television regulation. In particular, pursuant to the 1992
Cable Act, the Federal Communications Commission (the "FCC") adopted
regulations that limit the Company's ability to set and increase rates for the
Company's basic and cable programming service ("CPS") packages and for the
provision of cable television-related equipment. The 1992 Cable Act permits
certified local franchising authorities to order refunds of rates paid in the
previous twelve-month period determined to be in excess of the permitted
reasonable rates. It is possible that rate reductions or refunds of previously
collected fees may be required in the future.
The 1996 Act, which became law on February 8, 1996, materially alters
federal, state and local laws and regulations pertaining to cable television,
telecommunications and other related services and, in particular,
substantially amends the Communications Act of 1934 (the "Communications
Act"). Certain provisions of the 1996 Act could materially affect the growth
and operation of the cable television industry and the cable services provided
by the Company. Although the new legislation may substantially lessen certain
regulatory burdens, the cable television industry may be subject to additional
competition as a result. See "Business--Competition" in the Form 10-K. There
are numerous rulemakings that have been and continue to be undertaken by the
FCC which will interpret and implement the provisions of the 1996 Act. In
addition, certain provisions of the new legislation (such as the deregulation
of rates for CPS packages) will not immediately be effective. Furthermore,
certain provisions of the 1996 Act have been, and likely will be, subject to
judicial challenge. The Company is unable at
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this time to predict the outcome of such rulemakings or litigation or the
short and long-term effect (financial or otherwise) of the 1996 Act and FCC
rulemakings on the Company.
The cable television industry is subject to state and local regulations and
the Company must comply with rules of the local franchising authorities to
retain and renew its cable franchises, among other matters. There can be no
assurances that the franchising authorities will not impose new and more
restrictive requirements as a condition to franchise renewal.
Although the 1996 Act eliminates many legal barriers to entry (i.e.,
telephone companies entering the cable industry and cable companies entering
the telephone industry), the Company cannot assure that rules adopted by the
FCC or state regulators or other legislative or judicial initiatives relating
to the telecommunications industry will not have a material adverse effect on
the Company. In addition, the 1996 Act removes entry barriers for all
companies and could increase substantially the number of competitors offering
comparable services in the Company's potential markets. See "Legislation and
Regulation" in the Form 10-K and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Regulatory and Competitive
Matters" in the Form 10-K and the Form 10-Q.
LIMITATION ON ABILITY TO PURCHASE NOTES UPON A CHANGE OF CONTROL
The Indenture governing the Notes and certain of Adelphia's other indentures
contain provisions requiring Adelphia upon a Change of Control, to commence an
offer to redeem the Notes to holders of the Notes and certain of Adelphia's
other debt. If a Change of Control occurs, there is no assurance that (i)
Adelphia will have the ability to make a Change of Control Offer to the
holders of the Notes, (ii) Adelphia will have sufficient funds to repurchase
all securities (including the Notes) entitled to be repurchased or (iii)
Adelphia could obtain any additional debt or equity financing in an amount
sufficient to repurchase such securities. See "Description of the Notes--
Covenants--Change of Control Offer."
ABSENCE OF A PUBLIC MARKET; POSSIBLE VOLATILITY OF PRICE
The Notes are securities for which there is currently no market. The Company
does not intend to apply for listing of the Notes on any securities exchange
or for inclusion of the Notes in any automated quotation system, but the
Initial Purchaser has applied to the National Association of Securities
Dealers, Inc. to have the Notes designated as PORTAL securities. Although the
Company has been advised by the Initial Purchaser that it intends to make a
market in the Notes, it is not obligated to do so, and any such market-making
activities 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
Notes. If a market for the Notes were to develop, the Notes could trade at
prices that may be higher or lower than their initial offering price,
depending upon many factors, including prevailing interest rates, the
Company's operating results and the markets for similar securities.
Historically, the market for non-investment-grade debt has been subject to
disruptions that have caused substantial volatility in the prices of
securities similar to the Notes. There can be no assurance that, if a market
for the Notes were to develop, such a market would not be subject to similar
disruptions.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On September 25, 1997, the Registrant issued $325,000,000 aggregate
principal amount of Old Notes to Smith Barney Inc., the Initial Purchaser. The
issuance was not registered under the Securities Act in reliance upon the
exemption under Rule 144A and Section 4(2) of the Securities Act. In
connection with the issuance and sale of the Old Notes, the Registrant entered
into a Registration Rights Agreement with the Initial Purchaser dated as of
September 25, 1997 (the "Registration Rights Agreement"), which requires the
Registrant to cause the Old Notes to be registered under the Securities Act or
to file with the Commission a registration statement under the Securities Act
with respect to an issue of new notes of the Registrant identical in all
material respects to the Old Notes, and use its best efforts to cause such
registration statement to become effective under the Securities Act and, upon
the effectiveness of that registration statement, to offer to the holders of
the Old Notes the opportunity to exchange their Old Notes for a like principal
amount of New Notes, which will be issued without a restrictive legend and may
be reoffered and resold by the holder without restrictions or limitations
under the Securities Act. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part. The Exchange Offer is being made pursuant to the Registration Rights
Agreement to satisfy the Registrant's obligations thereunder.
Based on no-action letters issued by the staff of the Commission to third
parties, the Registrant believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder of such New Notes (other than any such
holder which is an "affiliate" of the Registrant 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
Notes are acquired in the ordinary course of such holder's business, such
holder has no arrangement or understanding with any person to participate in
the distribution of such New Notes and neither the holder nor any other person
is engaging in or intends to engage in a distribution of the New Notes. A
broker-dealer who acquired Old Notes directly from the Registrant can not
exchange such Old Notes in the Exchange Offer. Any holder who tenders in the
Exchange Offer for the purpose of participating in a distribution of the New
Notes cannot 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 Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See
"Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Registrants will accept any and all Old Notes validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date (as defined herein). The Registrant will issue a principal
amount of New Notes in exchange for an equal principal amount of outstanding
Old Notes tendered and accepted in the Exchange Offer. Holders may tender some
or all of their Old Notes pursuant to the Exchange Offer. The date of
acceptance for exchange of the Old Notes for the New Notes (the "Exchange
Date") will be the first business day following the Expiration Date or as soon
as practicable thereafter.
The terms of the New Notes and the Old Notes are substantially identical in
all material respects, except for certain transfer restrictions, registration
rights and Liquidated Damages for Registration Defaults relating to the Old
Notes which will not apply to the New Notes. See "Description of the Notes."
The New Notes will evidence the same debt as the Old Notes. The New Notes will
be issued under and entitled to the benefits of the Indenture pursuant to
which the Old Notes were issued.
As of the date of this Prospectus, $325,000,000 aggregate principal amount
of the Old Notes are outstanding. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders.
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Holders of Old Notes do not have any appraisal or dissenters' rights under
state law or the Indenture in connection with the Exchange Offer. The
Registrant intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreement and the applicable
requirements of the Exchange Act, and the rules and regulations of the
Commission thereunder. Old Notes which are not tendered and were not
prohibited from being tendered for exchange in the Exchange Offer will remain
outstanding and continue to accrue interest and to be subject to transfer
restrictions, but will not be entitled to any rights or benefits under the
Registration Rights Agreement.
Upon satisfaction or waiver of all the conditions to the Exchange Offer, on
the Exchange Date the Registrant will accept all Old Notes properly tendered
and not withdrawn and will issue New Notes in exchange therefor. For purposes
of the Exchange Offer, the Registrant shall be deemed to have accepted
properly tendered Old Notes for exchange when, as and if the Registrant had
given oral or written notice thereof to the Exchange Agent. The Exchange Agent
will act as agent for the tendering holders for the purposes of receiving the
New Notes from the Registrant.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of such Old Notes, a properly completed and duly
executed Letter of Transmittal and all other required documents; provided,
however, that the Registrant reserves the absolute right to waive any defects
or irregularities in the tender or conditions of the Exchange Offer. If any
tendered Old Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Old Notes are submitted for a greater
principal amount than the holder desires to exchange, such unaccepted or
nonexchanged Old Notes or substitute Old Notes evidencing the unaccepted
portion, as appropriate, will be returned without expense to the tendering
holder thereof as promptly as practicable after the expiration or termination
of the Exchange Offer.
Holders who tender Old Notes 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
Notes pursuant to the Exchange Offer. The Registrant will pay all charges and
expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Registrant, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended; provided that the
Exchange Offer shall not be extended beyond 30 business days after the date of
this Prospectus.
In order to extend the Expiration Date, the Registrant will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, prior to 9:00 a.m., New York City
time, on the next business day after the then Expiration Date.
The Registrant reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer. 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
Registrant to constitute a material change, the Registrant will promptly
disclose such amendment in a manner reasonably calculated to inform the
holders of Old Notes of such amendment.
Without limiting the manner in which the Registrant may choose to make a
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Registrant shall have no obligation to publish, advertise,
or otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.
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INTEREST ON THE NEW NOTES
New Notes will bear interest at the rate of 9 1/4% per annum, payable semi-
annually, in cash, on April 1 and October 1 of each year, from the most recent
date to which interest has been paid on the Old Notes or, if no such payment
has been made, from September 25, 1997.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Registrant will
not be required to exchange any New Notes for any Old Notes, and may terminate
or amend the Exchange Offer before the acceptance of any Old Notes for
exchange, if:
(a) 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 seeks to restrain or prohibit the Exchange Offer or, in the
Registrant's judgment, would materially impair the ability of the
Registrant to proceed with the Exchange Offer; or
(b) any law, statute, rule or regulation is proposed, adopted or enacted,
or any existing law, statute, rule, order or regulation is interpreted,
by any government or governmental authority which, in the Registrant's
judgment, would materially impair the ability of the Registrant to
proceed with the Exchange Offer; or
(c) the Exchange Offer or the consummation thereof would otherwise violate
or be prohibited by applicable law.
If the Registrant determines in its sole discretion that any of these
conditions is not satisfied, the Registrant may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders, (ii) extend
the Exchange Offer and retain all Old Notes tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders who tendered
such Old Notes to withdraw their tendered Old Notes, or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Old Notes which have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Registrant will
promptly disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders, and the Registrant will extend the
Exchange Offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the registered
holders, if the Exchange Offer would otherwise expire during such five to ten
business day period.
The foregoing conditions are for the sole benefit of the Registrant and may
be asserted by the Registrant regardless of the circumstances giving rise to
any such condition or may be waived by the Registrant in whole or in part at
any time and from time to time in their sole discretion. The failure by the
Registrant at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time. Any
determination by the Registrant concerning the events described above shall be
final and binding on all parties.
PROCEDURES FOR TENDERING
The tender of Old Notes by a holder as set forth below (including the tender
of Old Notes by book-entry delivery pursuant to the procedures of the
Depository Trust Company ("DTC")) and the acceptance thereof by the Registrant
will constitute an agreement between such holder and the Registrant in
accordance with the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a holder must (i) 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 or otherwise
deliver such Letter
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of Transmittal or such facsimile, together with the Old Notes (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, or (ii) comply with
the guaranteed delivery procedures described below. Delivery of all documents
must be made to the Exchange Agent at its address set forth herein.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. 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 DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE REGISTRANTS.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering of
such owner's Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such owner's name or obtain a properly completed
bond power from the registered holder. The transfer of registered 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 any Eligible Institution (as defined) unless the
Old Notes tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Payment Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter
of Transmittal or a notice of withdrawal, as the case may be, are required to
be guaranteed, such guarantee must be 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").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered
holder as such registered holder's name appears on such Old Notes, with the
signature thereon guaranteed by an Eligible Institution. If the Letter of
Transmittal or any Old Notes 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 Registrant, evidence
satisfactory to the Registrant of their authority to so act must be submitted
with the Letter of Transmittal.
Any financial institution that is a participant in the book-entry transfer
facility for the Old Notes, DTC, may make book-entry delivery of Old Notes by
causing DTC to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with DTC's procedures for such
transfer, including if applicable the procedures under the Automated Tender
Offer Program ("ATOP"). Although delivery of Old Notes may be effected through
book-entry transfer into the Exchange Agent's account at DTC, an appropriate
Letter of Transmittal with any required signature guarantee and all other
required documents must in each case be, or be deemed to be, transmitted to
and received and confirmed by the Exchange Agent at its address set forth
below on or prior to the Expiration Date, or, if the guaranteed delivery
procedures described below are complied with, within the time period provided
under such procedures.
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All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Registrant in its sole discretion, which
determination will be final and binding. The Registrant reserves the absolute
right to reject any and all Old Notes not properly tendered or any Old Notes
the Registrant's acceptance of which would, in the opinion of counsel for the
Registrant, be unlawful. The Registrant also reserves the right to waive any
defects, irregularities or conditions of tender as to particular Old Notes.
The Registrant'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 Notes must be cured within such time as the
Registrant shall determine. Although the Registrant intends to notify holders
of defects or irregularities with respect to tenders of Old Notes, neither the
Registrant, the Exchange Agent nor any other person shall incur any liability
for failure to give such notification. Tenders of Old Notes will not be deemed
to have been made until such defects or irregularities have been cured or
waived. Any Old Notes 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 by the Exchange Agent to the tendering holders, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
In addition, the Registrant reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding subsequent
to the Expiration Date or, as set forth below under "Conditions," to terminate
the Exchange Offer and, to the extent permitted by applicable law, purchase
Old Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the
terms of the Exchange Offer.
By tendering, each holder will also represent to the Registrant (i) that the
New Notes acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of the person receiving such New Notes, whether or
not such person is the holder, (ii) that neither the holder nor any such
person has an arrangement or understanding with any person to participate in
the distribution of such New Notes and (iii) that neither the holder nor any
such other person is an "affiliate," as defined in Rule 405 under the
Securities Act, of the Registrant, or that if it is an "affiliate," it will
comply with the registration and prospective delivery requirements of the
Securities Act to the extent applicable.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, or (iii) who cannot complete the procedures for book-entry
transfer of Old Notes to the Exchange Agent's account with DTC prior to the
Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) On or 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, the
certificate number(s) of such Old Notes (if possible) and the principal
amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that, within five business trading days after
the Expiration Date, (i) the Letter of Transmittal (or facsimile
thereof) together with the certificate(s) representing the Old Notes
and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent, or (ii)
that book-entry transfer of such Old Notes into the Exchange Agent's
account at DTC will be effected and confirmation of such book-entry
transfer will be delivered to the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all
tendered Old Notes in proper form for transfer and all other documents
required by the Letter of Transmittal, or confirmation of book-entry
transfer of the Old Notes into the Exchange Agent's account at DTC, are
received by the Exchange Agent within five business trading days after
the Expiration Date.
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Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer:
The holder tendering Old Notes exchanges, assigns and transfers the Old
Notes to the Registrant and irrevocably constitutes and appoints the Exchange
Agent as the holder's agent and attorney-in-fact to cause the Old Notes to be
assigned, transferred and exchanged. The holder represents and warrants to the
Registrant and the Exchange Agent that (i) it has full power and authority to
tender, exchange, assign and transfer the Old Notes and to acquire the New
Notes in exchange for the Old Notes, (ii) when the Old Notes are accepted for
exchange, the Registrant will acquire good and unencumbered title to the Old
Notes, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim, (iii) it will, upon request, execute and
deliver any additional documents deemed by the Registrant to be necessary or
desirable to complete the exchange, assignment and transfer of tendered Old
Notes and (iv) acceptance of any tendered Old Notes by the Registrant and the
issuance of New Notes in exchange therefor will constitute performance in full
by the Registrant of its obligations under the Registration Rights Agreement
and the Registrant will have no further obligations or liabilities thereunder
to such holders (except with respect to accrued and unpaid Liquidated Damages,
if any). All authority conferred by the holder will survive the death or
incapacity of the holder and every obligation of the holder will be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the holder.
Each holder will also certify that it (i) is not an "affiliate" of the
Registrant within the meaning of Rule 405 under the Securities Act or that, if
it is an "affiliate," it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable, (ii) is
acquiring the New Notes in the ordinary course of its business and (iii) has
no arrangement with any person or intent to participate in, and is not
participating in, the distribution of the New Notes.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex,
facsimile transmission or letter indicating 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 Expiration Date. Any such notice of
withdrawal must (i) specify the name of the person having tendered the Old
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number or numbers and principal amount of
such Old Notes), (iii) be signed by the holder in the same manner as the
original signature on the Letter of Transmittal by which such Old Notes were
tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the Old
Notes register the transfer of such Old Notes into the name of the person
withdrawing the tender and (iv) specify the name in which any such Old Notes
are to be registered, if different from that of the Depositor. If Old Notes
have been tendered pursuant to the procedure for book-entry transfer, any
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawn Old Notes or otherwise comply with DTC's
procedures. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Registrant, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no New Notes will be issued with respect thereto unless the
Old Notes so withdrawn are validly retendered. Any Old Notes which have been
tendered but which are not accepted for payment will be returned to the holder
thereof without cost to such holder as soon as
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practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following
one of the procedures described above under "Procedures for Tendering" at any
time prior to the Expiration Date.
UNTENDERED OLD NOTES
Holders of Old Notes whose Old Notes are not tendered or are tendered but
not accepted in the Exchange Offer will continue to hold such Old Notes and
will be entitled to all the rights and preferences and subject to the
limitations applicable thereto under the Indenture. Following consummation of
the Exchange Offer, the holders of Old Notes will continue to be subject to
the existing restrictions upon transfer thereof and the Registrant will have
no further obligations to such holders, other than the Initial Purchaser, to
provide for the registration under the Securities Act of the Old Notes held by
them. To the extent that Old Notes are tendered and accepted in the Exchange
Offer, the trading market for untendered and tendered but unaccepted Old Notes
could be adversely affected.
EXCHANGE AGENT
Bank of Montreal Trust Company, the Trustee under the Indenture, has been
appointed as Exchange Agent of the Exchange Offer. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
By Registered or Certified Mail, By Facsimile:
by hand or by Overnight Courier Bank of Montreal Trust Company
Bank of Montreal Trust Company Attention: Corporate Trust Department
Wall Street Plaza (212) 701-7664
88 Pine Street, 19th Floor Confirm by Telephone:
New York, NY 10005 (212) 701-7652
Attention: Corporate Trust Department
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Registrant. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers, regular
employees or agents of the Registrant and its affiliates.
The Registrant has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Registrant, however, will
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith
and will pay the reasonable fees and expenses of holders in delivering their
Old Notes to the Exchange Agent.
The cash expenses of the Registrant to be incurred in connection with the
Registrant's performance and completion of the Exchange Offer will be paid by
the Registrant. Such expenses include fees and expenses of the Exchange Agent
and Trustee, accounting and legal fees and printing costs, among others.
The Registrant will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however,
certificates representing New Notes or Old Notes for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be issued
in the name of, any person other
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than the registered holder of the Old Notes tendered, or if tendered Old Notes
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 Notes 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.
CONSEQUENCES OF FAILURE TO EXCHANGE
Upon consummation of the Exchange Offer, holders of Old Notes that were not
prohibited from participating in the Exchange Offer and did not tender their
Old Notes will not have any registration rights under the Registration Rights
Agreement with respect to such nontendered Old Notes and, accordingly, such
Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, the Old Notes may not be offered
or sold, unless registered under the Securities Act and applicable state
securities laws, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. The
Registrant does not intend to register the Old Notes under the Securities Act.
Based on interpretations by the staff of the Commission with respect to
similar transactions, the Registrant believes that the New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any holder of such New Notes
(other than any such holder which is an "affiliate" of the Registrant 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 Notes are acquired in the ordinary course of such
holder's business, such holder has no arrangement or understanding with any
person to participate in the distribution of such New Notes and neither the
holder nor any other person is engaging in or intends to engage in a
distribution of the New Notes. If any holder has any arrangement or
understanding with respect to the distribution of the New Notes to be acquired
pursuant to the Exchange Offer, the holder (i) could not rely on the
applicable interpretations of the staff of the Commission and (ii) 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 Notes for its own account in exchange for Old Notes must
acknowledge that it will deliver a prospectus in connection with any resale of
its New Notes. See "Plan of Distribution." The New Notes may not be offered or
sold unless they have been registered or qualified for sale under applicable
state securities laws or an exemption from registration or qualification is
available and is complied with. The Registrant is required, under the
Registration Rights Agreement, to register the New Notes in any jurisdiction
requested by the holders, subject to certain limitations.
OTHER
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decisions on what
action to take.
Upon consummation of the Exchange Offer, holders of the Old Notes that were
not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes and, accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. However, in the event the Company fails to
consummate the Exchange Offer or a holder of Old Notes notifies the Company in
accordance with the Registration Rights Agreement that it will be unable to
participate in the Exchange Offer due to circumstances delineated in the
Registration Rights Agreement, then the holder of the Old Notes will have
certain rights to have such Old Notes registered under the Securities Act
pursuant to the Registration Rights Agreement and subject to conditions
contained therein.
The Registrant has not entered into any arrangement or understanding with
any person to distribute the New Notes to be received in the Exchange Offer,
and to the best of the Registrant's information and belief, each person
participating in the Exchange Offer is acquiring the New Notes in its ordinary
course of business and has
25
<PAGE>
no arrangement or understanding with any person to participate in the
distribution of the New Notes to be received in the Exchange Offer. In this
regard, the Registrant will make each person participating in the Exchange
Offer aware (through this Prospectus or otherwise) that if the Exchange Offer
is being registered for the purpose of secondary resale, any holder using the
Exchange Offer to participate in a distribution of New Notes to be acquired in
the registered Exchange Offer (i) may not rely on the staff position
enunciated in Morgan Stanley and Co. Inc. (avail. June 5, 1991) and Exxon
Capital Holding Corp. (avail. May 13, 1988) or similar letters and (ii) must
comply with registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
as reflected in the Registrant's accounting records on the Exchange Date.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Registrant. The expenses of the Exchange Offer will be expensed over the term
of the New Notes.
USE OF PROCEEDS
The net proceeds of the Offering, after deducting offering expenses, were
approximately $321,250,000. Of this amount at least $208,000,000 will be used
by Adelphia to purchase, redeem or otherwise retire a portion of the aggregate
principal amount of 12 1/2% Senior Notes due 2002 of Adelphia, approximately
$12,000,000 will be used for a redemption premium, and the remainder will be
contributed to Adelphia subsidiaries and used to repay revolving credit
facilities of such subsidiaries, all of which may be reborrowed and used for
general corporate purposes of such subsidiaries. As of June 30, 1997, the
average effective interest rate charged on such subsidiary credit facilities
was approximately 7.1%.
Adelphia will not receive any proceeds from the Exchange Offer.
26
<PAGE>
CAPITALIZATION
(DOLLARS IN THOUSANDS EXCEPT PAR VALUE AMOUNTS)
The following table sets forth the cash and capitalization of the Company as
of June 30, 1997, on an actual and as adjusted basis to reflect the Offering,
the July Offerings and the Hyperion Offerings. This table should be read in
conjunction with Adelphia's consolidated financial statements and related
notes thereto included in the Form 10-K and the Form 10-Q.
<TABLE>
<CAPTION>
JUNE 30, 1997
----------------------------
ACTUAL AS ADJUSTED (C)
----------- ---------------
<S> <C> <C>
Cash and cash equivalents, excluding restricted
cash............................................ $ 25,010 $ 379,310
Restricted cash (a).............................. -- 83,500
----------- -----------
Total cash and cash equivalents, including
restricted cash............................... $ 25,010 $ 462,810
=========== ===========
Long-term debt including current maturities (b):
Notes of Subsidiaries to banks.................. $ 927,600 $ 727,850
Notes of Subsidiaries to institutions........... 343,100 59,100
Other Debt...................................... 15,997 15,997
----------- -----------
Total Subsidiary Bank and Institutional Debt... 1,286,697 802,947
----------- -----------
12 1/4% Senior Secured Notes of Hyperion due
2004........................................... -- 250,000
13% Senior Discount Notes of Hyperion due 2003.. 193,900 193,900
Other Hyperion Debt............................. 2,496 2,496
----------- -----------
Total Hyperion Debt............................ 196,396 446,396
----------- -----------
Total Subsidiaries' Debt...................... 1,483,093 1,249,343
----------- -----------
9 1/4% Senior Notes due 2002.................... -- 325,000
10 1/2% Senior Notes due 2004................... -- 150,000
9 7/8% Senior Notes due 2007.................... 347,316 347,316
12 1/2% Senior Notes due 2002................... 277,385 69,838
10 1/4% Senior Notes due 2000................... 99,366 99,366
11 7/8% Senior Debentures due 2004.............. 124,548 124,548
9 7/8% Senior Debentures due 2005............... 128,291 128,291
9 1/2% Senior Pay-In-Kind Notes due 2004........ 177,897 177,897
----------- -----------
Total Parent Debt............................... 1,154,803 1,422,256
----------- -----------
Total long-term debt including current
maturities................................... 2,637,896 2,671,599
----------- -----------
Hyperion 12 7/8% senior exchangeable redeemable
preferred stock due 2007, $.01 par value,
380,000 shares authorized and 200,000 shares
outstanding, as adjusted (aggregate liquidation
preference $200,000) ........................... -- 194,500
Cumulative exchangeable preferred stock, $.01 par
value, 1,500,000 shares authorized
and outstanding, as adjusted (aggregate
liquidation preference $150,000)................ -- 147,750
Convertible preferred stock, common stocks and
other stockholders' equity (deficiency):
Series C cumulative convertible preferred
stock, $.01 par value, 100,000 shares
authorized and outstanding, as adjusted; each
share of preferred stock convertible into
117.9245 shares of Class A Common Stock at the
option of the holder (aggregate liquidation
preference $100,000)........................... -- 97,000
Class A Common Stock, $.01 par value,
200,000,000 shares authorized and 19,702,308
shares outstanding............................. 197 197
Class B Common Stock, $.01 par value,
25,000,000 shares authorized and 10,944,476
shares outstanding............................. 109 109
Additional paid-in capital...................... 241,669 241,669
Accumulated deficit............................. (1,515,920) (1,539,373)
----------- -----------
Total convertible preferred stock, common
stocks and other stockholders' equity
(deficiency)................................. (1,273,945) (1,200,398)
----------- -----------
Total capitalization......................... $ 1,363,951 $ 1,813,451
=========== ===========
</TABLE>
- --------
(a) Approximately $83,500 of the proceeds from the Hyperion Note Offering was
placed in an escrow account for the purchase of pledged securities to
provide for payment in full when due of the first six scheduled interest
payments on the Hyperion Senior Secured Notes.
(b) Reference is made to Note 3 to Adelphia's consolidated financial
statements in the Form 10-K, for a description of Notes of Subsidiaries to
Banks and Institutions. See "The Company--Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" in the Form 10-K.
(c) Gives effect to the application of (i) the net proceeds of approximately
$321,250 from the Offering to purchase, redeem or otherwise retire at
least $208,000 of the 12 1/2% Senior Notes due 2002, approximately $12,000
for a redemption premium and the remainder to repay revolving credit
facilities of Adelphia's subsidiaries, (ii) the net proceeds of $393,500
from the July Offerings to the repayment of Notes of Subsidiaries to
institutions of $284,000 plus a premium of approximately $11,000 and the
repayment of Notes of Subsidiaries to Banks of approximately $98,500,
(iii) the net proceeds of $243,300 from the Hyperion Note Offering to cash
and cash equivalents and restricted cash and (iv) the net proceeds of
$194,500 from the Hyperion Preferred Stock Offering to cash and cash
equivalents.
27
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA (DOLLARS IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
The selected consolidated financial data as of and for each of the five
years in the period ended March 31, 1997 have been derived from the audited
consolidated financial statements of the Company. These data should be read in
conjunction with the consolidated financial statements and related notes
thereto for each of the three years in the period ended March 31, 1997 and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Form 10-K which is incorporated herein by
reference. The statement of operations data with respect to fiscal years ended
March 31, 1993 and 1994, and the balance sheet data at March 31, 1993, 1994
and 1995, have been derived from audited consolidated financial statements of
the Company not included in the Form 10-K. The statements of operations and
balance sheet data as of and for each of the four years ended March 31, 1997
of Hyperion have been derived from audited consolidated financial statements
of Hyperion not included in the Form 10-K. The unaudited information of
Hyperion for the fiscal year ended March 31, 1993 is derived from other
Hyperion information. The selected consolidated financial data as of and for
the three months ended June 30, 1996 and 1997 are unaudited; however, in the
opinion of management, such data reflect all adjustments (consisting of only
normal recurring adjustments) necessary to fairly present the data for such
interim periods. Operating results for the three months ended June 30, 1997
are not necessarily indicative of the results that may be expected for the
year ending March 31, 1998.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31, JUNE 30,
----------------------------------------------------- ------------------
1993 1994 1995 1996 1997 1996 1997
--------- --------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
DATA:
Revenues................ $ 305,222 $ 319,045 $ 361,505 $ 403,597 $ 472,778 $111,011 $122,644
Direct Operating and
Programming Expenses... 82,377 90,547 106,993 124,116 148,982 33,597 39,673
Selling, General and
Administrative
Expenses............... 49,468 52,801 63,487 68,357 81,763 18,638 22,259
Depreciation and
Amortization........... 90,406 89,402 97,602 111,031 124,066 28,477 33,733
Rate Regulation Charge.. -- -- -- 5,300 -- -- --
--------- --------- --------- --------- --------- -------- --------
Operating Income ....... 82,971 86,295 93,423 94,793 117,967 30,299 26,979
Interest Income from
Affiliates............. 5,216 9,188 11,112 10,623 8,367 2,049 2,151
Other Income (Expense).. 1,447 (299) 1,453 -- -- -- --
Priority Investment In-
come from Olympus...... 22,300 22,300 22,300 28,852 42,086 9,817 11,765
Cash Interest Expense... (164,695) (180,456) (180,942) (194,403) (199,332) (55,500) (57,030)
Noncash Interest
Expense................ (164) (1,680) (14,756) (16,288) (41,360) (4,996) (6,858)
Equity in Loss of Joint
Ventures............... (46,841) (30,054) (44,349) (46,257) (59,169) (14,647) (21,738)
Gain on Sale of
Investments............ -- -- -- -- 12,151 8,405 --
--------- --------- --------- --------- --------- -------- --------
Loss before Income
Taxes, Extraordinary
(Loss)/Gain and
Cumulative Effect of
Change in Accounting
Principle (a).......... (99,766) (94,706) (111,759) (122,680) (119,290) (24,573) (44,731)
Income Tax (Expense)
Benefit................ (3,143) (2,742) 5,475 2,786 358 (166) 70
--------- --------- --------- --------- --------- -------- --------
Loss before
Extraordinary
(Loss)/Gain and
Cumulative Effect of
Change in Accounting
Principle.............. (102,909) (97,448) (106,284) (119,894) (118,932) (24,739) (44,661)
Extraordinary
(Loss)/Gain on Early
Retirement of Debt..... (14,386) (752) -- -- (11,710) (2,079) 2,300
Cumulative Effect of
Change in
Accounting for Income
Taxes (a).............. (59,500) (89,660) -- -- -- -- --
--------- --------- --------- --------- --------- -------- --------
Net Loss................ $(176,795) $(187,860) $(106,284) $(119,894) $(130,642) $(26,818) $(42,361)
========= ========= ========= ========= ========= ======== ========
Loss per weighted
average share of common
stock before
extraordinary
(loss)/gain and
cumulative effect of
change in accounting
principle ............. $ (6.80) $ (5.66) $ (4.32) $ (4.56) $ (4.50) $ (0.94) $ (1.62)
Net loss per weighted
average share of common
stock ................. (11.68) (10.91) (4.32) (4.56) (4.94) (1.02) (1.54)
Cash dividends declared
per common share ...... -- -- -- -- -- -- --
Ratio of Earnings
Available to Cover
Combined Fixed Charges
and Preferred Stock
Dividends (f).......... -- -- -- -- -- -- --
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
MARCH 31,
--------------------------------------------------------------------------
AS ADJUSTED
1993 1994 1995 1996 1997 1997 (G)
---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET
DATA:
Adelphia
Total Assets.... $ 949,593 $ 1,073,846 $ 1,267,291 $ 1,367,579 $1,643,826 $2,093,326
Total Debt...... 1,731,099 1,793,711 2,021,610 2,175,473 2,544,039 2,577,741
Hyperion
Total Assets.... 4,316 14,765 23,212 35,269 174,601 619,101
Total Debt...... 4,814 19,968 35,541 50,855 215,675 465,675
Adelphia excluding Hyperion
Total Assets.... 945,277 1,059,081 1,244,079 1,332,310 1,469,225 1,474,225
Total Debt...... 1,726,285 1,773,743 1,986,069 2,124,618 2,328,364 2,112,066
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------------------------------
AS ADJUSTED
1993 1994 1995 1996 1997 1997 (G)
---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA AND
FINANCIAL
RATIOS:
Adelphia
Revenues......... $ 305,222 $ 319,045 $ 361,505 $ 403,597 $ 472,778 $ 472,778
Affiliate
interest and
priority
investment
income.......... 27,516 31,488 33,412 39,475 50,453 50,453
EBITDA (b)....... 202,340 207,936 225,890 247,999 292,486 292,486
Interest
expense......... (164,859) (182,136) (195,698) (210,691) (240,692) (244,453)
Preferred stock
dividends....... -- -- -- -- -- (54,624)
Capital
expenditures.... 70,975 75,894 92,082 100,089 129,609 129,609
Hyperion
Revenues......... $ 89 $ 417 $ 1,729 $ 3,322 $ 5,088 $ 5,088
Affiliate
interest and
priority
investment
income.......... -- -- -- -- -- --
EBITDA (b)....... (851) (1,958) (2,177) (2,452) (5,124) (5,124)
Interest
expense......... -- (2,164) (3,321) (6,088) (28,377) (59,001)
Preferred stock
dividends....... -- -- -- -- -- (27,000)
Capital
expenditures.... 1,950 3,097 2,850 6,084 36,127 36,127
Adelphia, excluding Hyperion
Revenues......... $ 305,133 $ 318,628 $ 359,776 $ 400,275 $ 467,690 $ 467,690
Affiliate
interest and
priority
investment
income.......... 27,516 31,488 33,412 39,475 50,453 50,453
EBITDA (b)....... 203,191 209,894 228,067 250,451 297,610 297,610
Interest
expense......... (164,859) (179,972) (192,377) (204,603) (212,315) (185,452)
Preferred stock
dividends....... -- -- -- -- -- (27,624)
Capital
expenditures.... 69,025 72,797 89,232 94,005 93,482 93,482
Total debt to
EBITDA (c)...... 8.34 8.46 8.51 8.29 7.64 6.93
EBITDA to total
interest
expense (d)..... 1.23 1.17 1.19 1.22 1.40 1.60
EBITDA to
combined
interest
expense and
preferred stock
dividends (e)... 1.23 1.17 1.19 1.22 1.40 1.40
<CAPTION>
JUNE 30, 1997
JUNE 30, --------------------------
1996 ACTUAL AS ADJUSTED(H)
----------- ----------- --------------
<S> <C> <C> <C>
BALANCE SHEET
DATA:
Adelphia
Total Assets.... $1,541,452 $1,708,795 $2,158,295
Total Debt...... 2,409,456 2,637,896 2,671,599
Hyperion
Total Assets.... 176,793 169,907 614,407
Total Debt...... 194,475 222,251 472,251
Adelphia excluding Hyperion
Total Assets.... 1,364,659 1,538,888 1,543,888
Total Debt...... 2,214,981 2,415,645 2,199,348
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------------------------------------
ACTUAL
----------------------- AS ADJUSTED
1996 1997 1997 (H)
----------- ----------- --------------
<S> <C> <C> <C>
OTHER DATA AND
FINANCIAL
RATIOS:
Adelphia
Revenues......... $ 111,011 $ 122,644 $ 125,269
Affiliate
interest and
priority
investment
income.......... 11,866 13,916 13,916
EBITDA (b)....... 70,642 74,628 76,203
Interest
expense......... (60,496) (63,888) (64,828)
Preferred stock
dividends....... -- -- (13,306)
Capital
expenditures.... 24,944 43,534 43,534
Hyperion
Revenues......... $ 1,102 $ 1,520 $ 1,520
Affiliate
interest and
priority
investment
income.......... -- -- --
EBITDA (b)....... (784) (2,040) (2,040)
Interest
expense......... (6,169) (8,077) (15,733)
Preferred stock
dividends....... -- -- (6,400)
Capital
expenditures.... 1,818 18,766 18,766
Adelphia, excluding Hyperion
Revenues......... $ 109,909 $ 121,124 $ 123,749
Affiliate
interest and
priority
investment
income.......... 11,866 13,916 13,916
EBITDA (b)....... 71,426 76,668 78,243
Interest
expense......... (54,327) (55,811) (49,095)
Preferred stock
dividends....... -- -- (6,906)
Capital
expenditures.... 23,126 24,768 24,768
Total debt to
EBITDA (c)...... 7.75 7.88 7.03
EBITDA to total
interest
expense (d)..... 1.31 1.37 1.59
EBITDA to
combined
interest
expense and
preferred stock
dividends (e)... 1.31 1.37 1.40
</TABLE>
29
<PAGE>
- --------
(a) "Cumulative Effect of Change in Accounting Principle" refers to a change
in accounting principle for Olympus and the Company. Effective January 1,
1993 and April 1, 1993, respectively, Olympus and the Company adopted the
provisions of Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," which requires an asset and liability
approach for financial accounting and reporting for income taxes. The
adoption of SFAS No. 109 resulted in the cumulative recognition of an
additional liability by Olympus and the Company of $59,500 and $89,660,
respectively.
(b) Earnings before interest expense, income taxes, depreciation and
amortization, equity in net loss of joint ventures, other noncash charges,
extraordinary loss and cumulative effect of change in accounting principle
("EBITDA"). EBITDA includes affiliate interest and priority investment
income on the Company's investment in Olympus, although there can be no
assurance that such priority investment income will be available to the
Company in the future. EBITDA and similar measurements of cash flow are
commonly used in the cable television industry to analyze and compare
cable television companies on the basis of operating performance, leverage
and liquidity. While EBITDA is not an alternative indicator of operating
performance to operating income or an alternative to cash flows from
operating activities as a measure of liquidity as defined by generally
accepted accounting principles, and, while EBITDA may not be comparable to
other similarly titled measures of other companies, the Company's
management believes EBITDA is a meaningful measure of performance as
substantially all of the Company's financing agreements contain financial
covenants based on EBITDA.
(c) Based on total debt outstanding at the end of the period, divided by
annualized EBITDA for the quarter ending the period presented. The Company
believes that this presentation is consistent with covenant tests which
limit the incurrence of indebtedness in certain of the Company's loan
agreements and that this ratio is commonly used for the cable television
industry as a measure of leverage.
(d) Based on EBITDA for the period presented divided by interest expense
recorded for the applicable period.
(e) Based on EBITDA for the period presented divided by combined interest
expense and preferred stock dividends recorded for the applicable period.
(f) For purposes of calculating the ratio of earnings available to cover
combined fixed charges and preferred stock dividends, (i) earnings consist
of loss before income taxes and extraordinary items plus fixed charges,
excluding capitalized interest, and (ii) fixed charges consist of
interest, whether expensed or capitalized, plus amortization of debt
issuance costs and the assumed interest component of rent expense. For the
years ended March 31, 1993, 1994, 1995, 1996 and 1997 and the three-month
periods ended June 30, 1996 and June 30, 1997, respectively, the Company's
earnings were insufficient to cover its combined fixed charges and
preferred stock dividends by $53,934, $65,997, $69,146, $78,189, $61,848,
$10,368 and $23,340, respectively. On a pro forma basis, the Company's
earnings were insufficient to cover its fixed charges by $120,233 and
$37,586 for the year ended March 31, 1997 and for the three months ended
June 30, 1997, respectively.
(g) As adjusted data for the year ended March 31, 1997, give effect to the
application of (i) the net proceeds of approximately $321,250 from the
Offering to purchase, redeem or otherwise retire at least $208,000 of the
12 1/2% Senior Notes due 2002, approximately $12,000 for a redemption
premium and the remainder to repay revolving credit facilities of
Adelphia's subsidiaries, (ii) the net proceeds of $393,500 from the July
Offerings to the repayment of Notes of Subsidiaries to institutions of
$284,000 plus a premium of approximately $11,000 and the repayment of
Notes of Subsidiaries to Banks of approximately $98,500, and (iii) the net
proceeds of $437,800 from the Hyperion Offerings to cash and cash
equivalents and restricted cash. See "Use of Proceeds" and
"Capitalization."
(h) As adjusted data for the three month period ended June 30, 1997, give
effect to the Booth Acquisition and to the application of (i) the net
proceeds of approximately $321,250 from the Offering to purchase, redeem
or otherwise retire at least $208,000 of the 12 1/2% Senior Notes due
2002, approximately $12,000 for a redemption premium and the remainder to
repay revolving credit facilities of Adelphia's subsidiaries, (ii) the net
proceeds of $393,500 from the July Offerings to the repayment of Notes of
Subsidiaries to institutions of $284,000 plus a premium of approximately
$11,000 and the repayment of Notes of Subsidiaries to Banks of
approximately $98,500, and (iii) the net proceeds of $437,800 from the
Hyperion Offerings to cash and cash equivalents and restricted cash. See
"Use of Proceeds" and "Capitalization." Adelphia as adjusted revenue and
EBITDA for the three month period ended June 30, 1997 excluding the effect
of the Booth Acquisition would be $122,644 and $74,628, respectively.
Adelphia excluding Hyperion as adjusted revenue, EBITDA, total debt to
EBITDA, EBITDA to total interest expense and EBITDA to combined interest
expense and preferred stock dividends for the three month period ended
June 30, 1997 excluding the effect of the Booth Acquisition would be
$121,124, $76,668, 7.17, 1.56 and 1.37, respectively.
30
<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
The New Notes, like the Old Notes, will be issued pursuant to the Indenture,
dated September 25, 1997 (the "Indenture"), among the Company and Bank of
Montreal Trust Company, as trustee (the "Trustee"). The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (the "Trust Indenture Act"). The
terms of the New Notes are substantially identical to the Old Notes in all
material respects (including interest rate and maturity), except that (i) the
New Notes will not be subject to the restrictions on transfer (other than with
respect to holders that are broker-dealers, persons who participated in the
distribution of the Old Notes or affiliates) and (ii) the Registration Rights
Agreement covenants regarding registration and the related Liquidated Damages
(other than those that have accrued and were not paid) with respect to
Registration Defaults will have been deemed satisfied. The Notes are subject
to all such terms, and holders of Notes are referred to the Indenture and the
Trust Indenture Act for a statement thereof. The following summary of certain
provisions of the Indenture does not purport to be complete and is qualified
by reference to the Indenture, including the definitions therein of certain
terms used below. A copy of the Indenture and Registration Rights Agreement is
available as set forth under "Available Information." The definitions of
certain terms used in the following summary are set forth below under "--
Certain Definitions." As used in this section, the term "Company" refers only
to Adelphia Communications Corporation and not to its subsidiaries.
As of the date of this Prospectus, $325,000,000 principal amount of the Old
Notes was outstanding.
The Indenture authorizes the issuance of up to $325,000,000 in aggregate
principal amount of the Notes. The Notes are general senior unsecured
obligations of Adelphia and are effectively subordinate in right of payment to
the liabilities of Adelphia's subsidiaries. See "Subordination to Subsidiary
Debt" and "Certain Definitions" below.
The Notes will mature on October 1, 2002. Adelphia will pay interest on the
Notes on April 1 and October 1 of each year, commencing April 1, 1998, to the
persons who are registered holders at the close of business on the March 15
and September 15 immediately preceding the interest payment date. The Notes
will not be redeemable prior to the maturity date.
The Notes will be issued only in fully registered form without coupons and
will be issued in denominations of $1,000 and integral multiples thereof.
The Indenture and the existing indentures under which the 9 7/8% Senior
Notes due 2007 (the "9 7/8% Notes"), the 10 1/2% Senior Notes due 2004 (the
"10 1/2% Notes"), the 12 1/2% Senior Notes due 2002 (the "12 1/2% Notes"), the
10 1/4% Senior Notes due 2000 (the "10 1/4% Notes"), the 9 1/2% Senior Pay-In-
Kind Notes due 2004 (the "9 1/2% Notes"), the 11 7/8% Senior Debentures due
2004 (the "11 7/8% Debentures") and the 9 7/8% Senior Debentures due 2005 (the
"9 7/8% Debentures") of Adelphia were issued contain covenants which may
afford holders of the Notes, the 9 7/8% Notes, the 10 1/2% Notes, the 12 1/2%
Notes, the 10 1/4% Notes, the 9 1/2% Notes, the 11 7/8% Debentures and the 9
7/8% Debentures certain protections regarding leverage and the incurrence of
indebtedness. These include covenants which limit the amount of additional
indebtedness that may be incurred by Adelphia and its subsidiaries, which
restrict mergers and consolidations by Adelphia unless, after giving effect to
the transaction, the consolidated fixed charge ratio of the surviving entity
satisfies certain compliance tests, and which require such Notes, the 9 7/8%
Notes, the 10 1/2% Notes, the 12 1/2% Notes, the 10 1/4% Notes, the 9 1/2%
Notes, 11 7/8% Debentures and 9 7/8% Debentures to be secured equally and
ratably with other indebtedness in certain circumstances where Adelphia
creates or assumes liens on its property or assets in connection therewith.
See "Covenants" below.
On the date of the Indenture, the only Unrestricted Subsidiaries of Adelphia
were Hyperion, Global Cablevision, Inc. and Orchard Park Cablevision, Inc. and
their respective subsidiaries. See the Form 10-K and the Form 10-Q.
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The Notes are not redeemable and there is no mandatory redemption or sinking
fund prior to maturity.
RANKING
The New Notes will be senior unsecured indebtedness of Adelphia, will rank
pari passu in right of payment with other unsubordinated indebtedness of
Adelphia and senior in right of payment to all future subordinated
indebtedness of Adelphia. The operations of Adelphia are conducted through its
subsidiaries and, therefore, Adelphia is dependent on the earnings and cash
flow of and distributions from its subsidiaries to meet its debt obligations,
including its obligations with respect to the New Notes. Because the assets of
its subsidiaries constitute substantially all of the assets of Adelphia, and
because the subsidiaries will not guarantee the payment of principal of and
interest on the New Notes, the claims of holders of the New Notes effectively
will be subordinated to the claims of creditors of such entities. As of June
30, 1997 on a pro forma basis, after giving effect to the July Offerings, the
Offering and the Hyperion Offerings and to the application of the net proceeds
therefrom, the New Notes would have been effectively subordinated to $1.4
billion of indebtedness and redeemable preferred stock of Adelphia's
subsidiaries. As of June 30, 1997, the total indebtedness of Adelphia's
subsidiaries to banks and institutions, on a consolidated basis, aggregated
$1.5 billion. See "Risk Factors--Holding Company Structure; Restrictive
Covenants."
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Adelphia and the Initial Purchaser entered into the Registration Rights
Agreement on September 25, 1997 (the "Closing Date"). Pursuant to the
Registration Rights Agreement, Adelphia has agreed to use its reasonable
efforts to file with the Commission on or prior to 90 days after the Closing
Date the Exchange Offer Registration Statement on the appropriate form under
the Securities Act with respect to the Exchange Notes. Upon the effectiveness
of the Exchange Offer Registration Statement, Adelphia will offer to the
holders of Transfer Restricted Securities pursuant to the Exchange Offer who
are able to make certain representations the opportunity to exchange their
Transfer Restricted Securities for Exchange Notes. If (i) Adelphia is not
required to file the Exchange Offer Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy, or (ii) any Holder of Transfer Restricted
Securities notifies Adelphia on or prior to the 20th Business Day following
consummation of the Exchange Offer that it (a) is prohibited by law or
Commission policy from participating in the Exchange Offer or (b) may not
resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales
or (iii) any holder of Transfer Restricted Securities is a broker-dealer and
holds Notes acquired directly from Adelphia or an affiliate of Adelphia, and
shall so notify Adelphia, Adelphia will file with the Commission a Shelf
Registration Statement to cover resales of the Notes by the Holders thereof
who satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement. Adelphia will use its best
efforts to cause the applicable registration statement to be declared
effective by the Commission within the applicable time period. For purposes of
the foregoing, "Transfer Restricted Securities" means each Note until (i) the
date on which such Note has been exchanged by a person other than a broker-
dealer for an Exchange Note in the Exchange Offer, (ii) following the exchange
by a broker-dealer in the Exchange Offer of a Note for an Exchange Note, the
date on which such Exchange Note is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on
which such Note has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (iv) the
date on which such Note is distributed to the public pursuant to Rule 144
under the Securities Act. Notwithstanding the foregoing, at any time after
Consummation (as defined in the Registration Rights Agreement) of the Exchange
Offer, Adelphia may allow the Shelf Registration Statement to cease to be
effective and usable if (i) the Board of Directors of Adelphia determines in
good faith that such action is in the best interests of Adelphia, and Adelphia
notifies the Holders within a certain period of time after the Board of
Directors of Adelphia makes such determination or (ii) the prospectus
contained in the Shelf Registration Statement contains an untrue statement of
a material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided that the period referred to in the Registration
Rights Agreement during which the Shelf Registration Statement is required to
be effective and usable will be extended by the
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number of days during which such registration statement was not effective or
usable pursuant to the foregoing provisions.
The Registration Rights Agreement provides that (i) Adelphia will use its
reasonable efforts to file an Exchange Offer Registration Statement with the
Commission on or prior to 90 days after the Closing Date, (ii) Adelphia will
use its best efforts to have the Exchange Offer Registration Statement
declared effective by the Commission on or prior to 180 days after the Closing
Date (which 180-day period shall be extended for a number of days equal to the
number of Business Days, if any, that the Commission is officially closed
during such period), (iii) unless the Exchange Offer would not be permitted by
applicable law or Commission policy, Adelphia will commence the Exchange Offer
and use its best efforts to issue on or prior to 30 days after the date on
which the Exchange Offer Registration Statement was declared effective by the
Commission, Exchange Notes in exchange for all Notes tendered prior thereto in
the Exchange Offer and (iv) if obligated to file the Shelf Registration
Statement, Adelphia will use its best efforts to file the Shelf Registration
Statement with the Commission on or prior to 60 days after such filing
obligation arises and to cause the Shelf Registration Statement to be declared
effective by the Commission on or prior to 90 days after such filing
obligation arises. If (a) Adelphia fails to file either of the Registration
Statements required by the Registration Rights Agreement on or before the date
specified for such filing, (b) either of such Registration Statements is not
declared effective by the Commission on or prior to the date specified for
such effectiveness (the "Effectiveness Target Date"), (c) Adelphia fails to
consummate the Exchange Offer within 30 days of the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement, or (d) subject to
the last sentence of the preceding paragraph, the Shelf Registration Statement
or the Exchange Offer Registration Statement is declared effective, but
thereafter ceases to be effective or usable in connection with resales of
Transfer Restricted Securities during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (d) above is a "Registration Default"), then, subject to the last
sentence of the preceding paragraph, Adelphia will pay Liquidated Damages to
each holder of Transfer Restricted Securities, with respect to the first 90-
day period immediately following the occurrence of such Registration Default,
in an amount equal to 0.25% per annum on the principal amount of Notes
constituting Transfer Restricted Securities held by such Holder. The amount of
the Liquidated Damages will increase by an additional 0.25% per annum with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of Liquidated Damages of 2.0% per annum on
the principal amount of Notes constituting Transfer Restricted Securities. All
accrued Liquidated Damages will be paid by Adelphia in cash on each Damages
Payment Date to the Global Note Holder (and any holder of Certificated
Securities who has given wire-transfer instructions to Adelphia at least 10
Business Days prior to the Damages Payment Date) by wire transfer of
immediately available funds and to all other Holders of Certificated
Securities by mailing checks to their registered addresses. Following the cure
of all Registration Defaults, the accrual of Liquidated Damages will cease.
Holders of the Old Notes will be required to make certain representations to
Adelphia (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information
to be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Old Notes included
in the Shelf Registration Statement and benefit from the provisions regarding
Liquidated Damages set forth above.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
by reference to, all the provisions of the Registration Rights Agreement, a
copy of which will be available upon request to Adelphia.
Except as described below under "--Modification of Indenture," the Old Notes
and the New Notes will be considered collectively to be a single class for all
purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and repurchase offers, and for purposes of this
"Description of the Notes" (except under this caption, "--Registration Rights;
Liquidated Damages"), all reference herein to "Notes" shall be deemed to refer
collectively to the Old Notes and any New Notes, unless the context otherwise
requires.
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CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Indenture. Reference is made to the Indenture for
the full definition of all such terms as well as any other capitalized terms
used herein for which no definition is provided.
"Affiliate" means a Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, Adelphia, (ii) which beneficially owns or holds 10% or more of any class
of the voting Capital Stock of Adelphia, or (iii) of which 10% or more of the
voting Capital Stock is beneficially owned or held by Adelphia, a Restricted
Subsidiary or an Unrestricted Subsidiary of Adelphia. Without limitation, an
Affiliate also includes any director or executive officer of Adelphia. As used
herein, "Affiliate" shall not include a Restricted Subsidiary.
"Aggregate Excess Restricted Investments" means for any fiscal quarter the
aggregate of Excess Restricted Investments with respect to the Restricted
Investments in all of the Unrestricted Subsidiaries and Affiliates of
Adelphia.
"Allowable Securities" means (i) cash equivalents, (ii) common or preferred
Capital Stock in a Person which (x) has Investment Grade Senior Debt or (y)
whose ratio of Indebtedness plus Preferred Stock to Annualized Pro Forma
EBITDA is less than 7.75:1, or (iii) debt securities issued by a Person which
(x) has Investment Grade Senior Debt or (y) whose Leverage Ratio is less than
7.75:1, provided that the securities in (ii)(y) and (iii)(y) above shall only
be deemed to be Allowable Securities if the principal business of the Person
is owning and operating cable television systems.
"Annualized Pro Forma EBITDA" means, with respect to any Person, (i) such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four,
minus (ii) in the case of Adelphia only, Adelphia's Aggregate Excess
Restricted Investments for such fiscal quarter.
"Asset Sale" means the sale, transfer or other disposition (other than to
Adelphia or any of its Restricted Subsidiaries) in any single transaction or
series of related transactions of (a) any Capital Stock of or other equity
interest in any Restricted Subsidiary, (b) all or substantially all of the
assets of Adelphia or of any Restricted Subsidiary, or (c) all or
substantially all of the assets of a Company System or part thereof serving at
least 5,000 basic subscribers, a division, line of business or comparable
business segment of Adelphia or any Restricted Subsidiary.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Capital Stock Sale Proceeds" means the aggregate net sale proceeds
(including the fair market value of property, other than cash, as determined
by an independent appraisal firm) received by Adelphia from the issue or sale
(other than to a Subsidiary) by Adelphia of any class of its Capital Stock on
or after January 1, 1993 (including Capital Stock of Adelphia issued after
January 1, 1993 upon conversion of or in exchange for other securities of
Adelphia).
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with generally accepted accounting principles
and the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with generally accepted accounting
principles.
"Change of Control" means such time as (i) (a) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than
the Rigas Family and its Affiliates, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 35% of the total
voting power required to elect or designate for election a majority of
Adelphia's Board of Directors and attaching to the then outstanding
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voting Capital Stock of Adelphia and (b) the Rigas Family, together with its
Affiliates, is not at such time the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than 35% of the total voting power
required to elect or designate for election a majority of Adelphia's Board of
Directors and attaching to the then outstanding voting Capital Stock of
Adelphia, or (ii) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted Adelphia's Board
of Directors (together with any new directors whose election by Adelphia's
Board of Directors or whose nomination for election by Adelphia's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved or approved by
the Rigas Family and its Affiliates at a time when they had the right or
ability by voting right, contract or otherwise to elect or designate for
election a majority of Adelphia's Board of Directors) cease for any reason to
constitute a majority of the directors then in office.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Consolidated Fixed Charge Ratio" means, for any Person, for any period, the
ratio of (i) Annualized Pro Forma EBITDA to (ii) Consolidated Interest Expense
for such period multiplied by four.
"Consolidated Interest Expense" means, for any Person, for any period, the
amount of interest in respect of Indebtedness (including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness), the amount of Redeemable Dividends and the interest component
of rentals in respect of any Capitalized Lease Obligation paid, accrued or
scheduled to be paid or accrued by such Person during such period, determined
on a consolidated basis in accordance with generally accepted accounting
principles. For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by such Person to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with generally accepted accounting principles
consistently applied.
"Cumulative Credit" means the sum of (i) Capital Stock Sale Proceeds plus
(ii) cumulative EBITDA of Adelphia from and after January 1, 1993 to the end
of the fiscal quarter immediately preceding the date of a proposed Restricted
Payment, or, if such cumulative EBITDA for such period is negative, minus the
amount by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means the aggregate amount of Consolidated
Interest Expense paid, accrued or scheduled to be paid or accrued by Adelphia
from January 1, 1993 to the end of the fiscal quarter immediately preceding a
proposed Restricted Payment, determined on a consolidated basis in accordance
with generally accepted accounting principles.
"EBITDA" means, for any Person, for any period, an amount equal to (A) the
sum of (i) consolidated net income for such period (exclusive of any gain or
loss realized in such period upon an Asset Sale), plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing consolidated net income and any provision
for taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period, plus (iv) depreciation for such
period on a consolidated basis, plus (v) amortization of intangibles for such
period on a consolidated basis, plus (vi) any other non-cash items reducing
consolidated net income for such period, minus (B) all non-cash items
increasing consolidated net income for such period, all for such Person and
its Subsidiaries determined in accordance with generally accepted accounting
principles consistently applied, except that with respect to Adelphia each of
the foregoing items shall be determined on a consolidated basis with respect
to Adelphia and its Restricted Subsidiaries only.
"Excess Restricted Investment" means, with respect to any particular
Unrestricted Subsidiary or Affiliate of Adelphia for a fiscal quarter, the
lesser of the amounts described in the following clauses (i) and (ii), or, if
such amounts are equal, such amount:
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(i) the aggregate amount of any Restricted Investments (other than the
Initial Investment) made by Adelphia or any Restricted Subsidiary with
respect to such Unrestricted Subsidiary or Affiliate and during the
twelve-month period ending on the last day of such fiscal quarter;
(ii) cash income received during such quarter by Adelphia with respect to
its Restricted Investments in such Unrestricted Subsidiary or
Affiliate multiplied by four;
and provided that cash income from a particular Restricted Investment shall be
included only (x) if cash income has been received by Adelphia with respect to
such Restricted Investment during each of the previous two fiscal quarters, or
(y) if the cash income derived from such Restricted Investment is attributable
to Allowable Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Indebtedness" is defined to mean (without duplication), with respect to any
Person, any indebtedness, secured or unsecured, contingent or otherwise, which
is for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), or evidenced
by bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding, without
limitation, any balances that constitute subscriber advance payments and
deposits, accounts payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of
such Person prepared in accordance with generally accepted accounting
principles, and shall also include, to the extent not otherwise included (i)
any Capitalized Lease Obligations, (ii) obligations secured by a lien to which
the property or assets owned or held by such Person is subject, whether or not
the obligation or obligations secured thereby shall have been assumed, (iii)
guaranties of items of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) in the case of Adelphia, Preferred
Stock of its Restricted Subsidiaries and (v) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing.
Notwithstanding the foregoing, Indebtedness shall not include any interest or
accrued interest until due and payable.
"Initial Investment" means the Restricted Investment in a Person made by
Adelphia or a Restricted Subsidiary that first results in such Person becoming
an Unrestricted Subsidiary or Affiliate of Adelphia, except that in the case
of Olympus, "Initial Investment" shall mean any Restricted Investment made in
Olympus since February 22, 1994, but only to the extent that such Restricted
Investment when aggregated with the other Restricted Investments made in
Olympus since such date does not exceed $25,000,000.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein
against fluctuations in interest rates.
"Investment Grade Senior Debt" means, with respect to any Person,
Indebtedness of such Person which has been rated with an investment grade
rating by Moody's or Standard & Poor's.
"Leverage Ratio" is defined as the ratio of (i) the outstanding Indebtedness
of a Person and its Subsidiaries (or in the case of Adelphia, its Restricted
Subsidiaries) divided by (ii) the Annualized Pro Forma EBITDA of such Person.
"Lien" means with respect to any property or assets of Adelphia (it being
understood that for purposes of this definition property or assets of Adelphia
do not include property or assets of any Subsidiary of Adelphia) any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sale, or
other title retention agreement having substantially the same economic effect
as any of the
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foregoing) except for (i) liens for taxes, assessments or governmental charges
or levies on property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith
and by appropriate proceedings; (ii) liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than
sixty (60) days past due or are being contested in good faith and by
appropriate proceedings; (iii) other liens incidental to the conduct of its
business or the ownership of its property and assets which were not incurred
in connection with the borrowing of money or the obtaining of advances or
credit and which do not in the aggregate materially detract from the value of
its property or assets or materially impair the use thereof in the operation
of its business; (iv) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character; or (v) liens
arising upon entry of a confession of judgment in Pennsylvania courts in
connection with borrowings not in excess of $1,000,000 in aggregate.
"Permitted Investments" means, for any Person, Restricted Investments made
on or after February 22, 1994 consisting of (i) advances for less than one
year issued in the ordinary course of business for working capital purposes or
for the purchase of property, plant and equipment in an amount not to exceed
$5,000,000 in the aggregate outstanding, (ii) with respect to a Restricted
Investment in Olympus, $25,000,000 plus the aggregate amount of cash income
received by Adelphia from Olympus, minus the aggregate amount of all
Restricted Investments made since February 22, 1994, with respect to Olympus,
(iii) $20,000,000 plus the cash proceeds from the sale or redemption of, or
income from, any Restricted Investments made on or after January 1, 1993,
minus the aggregate amount of all Restricted Investments (excluding Restricted
Investments made with respect to Olympus) since January 1, 1993, (iv) non-cash
Restricted Investments made with the non-cash proceeds from the sale or
redemption of, or income from, any Restricted Investments, or (v) an amount
which, at the time of such Restricted Investment, does not exceed the amount
of Restricted Payments that could then be made by Adelphia and its Restricted
Subsidiaries under the covenant set forth under "Limitations on Restricted
Payments"; provided further that no Restricted Investments may be made under
(ii), (iii), (iv) or (v) unless pro forma for such Restricted Investment
Adelphia could incur $1 of debt under the first paragraph of the covenant set
forth under "Limitation on Indebtedness."
"Permitted Refinancing Indebtedness" means any renewals, extensions,
substitutions, refinancings or replacements of any Indebtedness, including any
successive extensions, renewals, substitutions, refinancings or replacements
so long as (i) the aggregate amount of Indebtedness represented thereby is not
increased by such renewal, extension, substitution, refinancing or
replacement, (ii) in the case of Indebtedness of Adelphia, the average life
and the date such Indebtedness is scheduled to mature is not shortened and
(iii) in the case of Indebtedness of Adelphia, the new Indebtedness shall not
be senior in right of payment to the Indebtedness that is being extended,
renewed, substituted, refinanced or replaced.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of such
Person as determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied after giving effect to the
following: (i) if, during or after such period, such Person or any of its
Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA of such Person
and its Subsidiaries for such period shall be reduced by an amount equal to
the Pro Forma EBITDA (if positive) directly attributable to the assets which
are the subject of such Asset Sale for the period or increased by an amount
equal to the Pro Forma EBITDA (if negative) directly attributable thereto for
such period and (ii) if, during or after such period, such Person or any of
its Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the
acquisition of such Person or business; and provided further that, with
respect to Adelphia, all of the foregoing references to "Subsidiary" or
"Subsidiaries" shall be deemed to refer only to a "Restricted Subsidiary" or
"Restricted Subsidiaries" of Adelphia.
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"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention of Adelphia to effect a Change of Control.
"Rating Decline" means the occurrence of the following on, or within 90 days
after, the date of public notice of the occurrence of a Change of Control or
of the intention by Adelphia to effect a Change of Control (which period shall
be extended so long as the rating of the Notes is under publicly announced
consideration for possible downgrade by Moody's or Standard & Poor's): (a) in
the event the Notes are rated by either Moody's or Standard & Poor's on the
Rating Date as Investment Grade Senior Debt, the rating of the Notes by both
Moody's and Standard & Poor's Corporation shall be below Investment Grade
Senior Debt; or (b) in the event the Notes are rated below Investment Grade
Senior Debt by both Moody's and Standard & Poor's on the Rating Date, the
rating of the Notes by either Moody's or Standard and Poor's shall be
decreased by one or more gradations (including gradations within rating
categories as well as between rating categories).
"Redeemable Dividend" means, for any dividend with regard to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any Capital Stock that
by its terms or otherwise is required to be redeemed or is redeemable at the
option of the holder at any time prior to the maturity of the Notes.
"Restricted Investment" means any advance, loan, account receivable (other
than an account receivable arising in the ordinary course of business), or
other extension of credit (excluding, however, accrued and unpaid interest in
respect of any advance, loan or other extension of credit) or any capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others, or otherwise), any
purchase or ownership of any stocks, bonds, notes, debentures or other
securities (including, without limitation, any interests in any partnership or
joint venture) of, or any bank accounts with or guarantee of any Indebtedness
or other obligations of, any Unrestricted Subsidiary or Affiliate of Adelphia.
"Restricted Payment" means (i) any dividend or distribution (whether made in
cash, property or securities), on or with respect to any shares of Capital
Stock of Adelphia or Capital Stock of any Subsidiary which is consolidated
with Adelphia in accordance with generally accepted accounting principles
consistently applied, except for any dividend or distribution which is made
solely to Adelphia or another Subsidiary or dividends or distributions payable
solely in shares of Common Stock of Adelphia, or (ii) any redemption,
repurchase, retirement or other direct or indirect acquisition of (a)
Indebtedness of Adelphia which is subordinate in right of payment to the
Notes, except by exchange for or out of the proceeds of the substantially
concurrent issuance of Permitted Refinancing Indebtedness or from the proceeds
of a sale of Capital Stock by Adelphia or (b) shares of Capital Stock of
Adelphia or any warrants, rights or options to directly or indirectly purchase
or acquire any such Capital Stock of Adelphia or any securities exchangeable
for or convertible into any such shares, other than options issued or shares
purchased or granted under Adelphia's Stock Option Plan of 1986 or Adelphia's
Restricted Stock Bonus Plan, from any employee of Adelphia or any of its
Subsidiaries who, together with any Person that, directly or indirectly,
controls (other than by virtue of being directly or indirectly the employer of
such employee), is controlled by or is under common control with such
employee, owns less than 1% of the outstanding Capital Stock of Adelphia,
except for the purchase, redemption, retirement or other acquisition of any
shares of Adelphia's Capital Stock by exchange for, or out of the proceeds of
the substantially concurrent sale of, other shares of its Capital Stock other
than any capital stock 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 redeemable at the option of the
holder thereof, in whole or in part, on or prior to October 1, 2002.
"Restricted Subsidiary" means (a) any Subsidiary of Adelphia, whether
existing on or after the date of the Indenture, unless such Subsidiary is an
Unrestricted Subsidiary or shall have been classified as an Unrestricted
Subsidiary by a resolution adopted by the Board of Directors of Adelphia and
(b) an Unrestricted Subsidiary
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which is reclassified as a Restricted Subsidiary by a resolution adopted by
the Board of Directors of Adelphia, provided that on and after the date of
such reclassification such Unrestricted Subsidiary shall not incur
Indebtedness other than that permitted to be incurred by a Restricted
Subsidiary under the provisions of the Indenture.
"Rigas Family" means collectively John J. Rigas and members of his immediate
family, any of their respective spouses, estates, lineal descendants, heirs,
executors, personal representatives, administrators, trusts for any of their
benefit and charitable foundations to which shares of Adelphia's Capital Stock
beneficially owned by any of the foregoing have been transferred.
"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which
more than 50% of the total voting power of the Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the
direction of the management and policies of such entity by contract or
otherwise if in accordance with generally accepted accounting principles such
entity is consolidated with the first-named Person for financial statement
purposes.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary, (b) any Subsidiary of Adelphia which is classified after the date
of the Indenture as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors of Adelphia and (c) any subsidiary which as of the date of
the Indenture has been declared an Unrestricted Subsidiary by a resolution
adopted by the Board of Directors of Adelphia; provided that a Subsidiary
organized or acquired after the date of the Indenture may be so classified as
an Unrestricted Subsidiary only if immediately after the date of such
classification, any investment by Adelphia and its Restricted Subsidiaries in
such Subsidiary made at the time of the organization or acquisition of such
Subsidiary would be a Restricted Investment permissible under the Indenture.
The Trustee shall be given prompt notice by Adelphia of each resolution
adopted by its Board of Directors under this provision, together with a copy
of each such resolution adopted.
SUBORDINATION TO SUBSIDIARY DEBT
All liabilities of Adelphia's subsidiaries will be effectively senior in
right of payment to the Notes. As of June 30, 1997, the total indebtedness of
such subsidiaries to banks and institutions, on a consolidated basis,
aggregated approximately $1.5 billion. See "Risk Factors--Holding Company
Structure; Restrictive Covenants."
COVENANTS
The Indenture contains, among others, the following covenants. Except as
otherwise specified, all of the covenants described below appear in the
Indenture.
Limitation on Indebtedness. The Indenture provides that Adelphia will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, issue, assume or become liable for, contingently or otherwise
(collectively an "incurrence"), any Indebtedness (other than the $325,000,000
of Notes originally issued under the Indenture) unless, after giving effect to
such incurrence on a pro forma basis, Indebtedness of Adelphia and its
Restricted Subsidiaries, on a consolidated basis, shall not be more than the
product of the Annualized Pro Forma EBITDA for the latest fiscal quarter
preceding such incurrence for which financial statements are available,
multiplied by 8.75.
Notwithstanding the above, the Indenture does not limit the incurrence of
Indebtedness which is incurred by Adelphia or its Restricted Subsidiaries for
working capital purposes or capital expenditures with respect to plant,
property and equipment of Adelphia and its Restricted Subsidiaries in an
aggregate amount not to exceed
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$50,000,000. Further, the Indenture will not limit Permitted Refinancing
Indebtedness, subject to the provisions of the covenant set forth under
"Limitation on Restricted Payments."
Limitation on Restricted Payments. The Indenture provides that, so long as
any of the Notes remain outstanding, Adelphia shall not make, and shall not
permit any Restricted Subsidiary to make, any Restricted Payment (as defined
above) 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 any such Restricted Payment, the aggregate of all Restricted Payments which
shall have been made on or after January 1, 1993 (the amount of any Restricted
Payment, if other than cash, to be based upon fair market value as determined
in good faith by Adelphia's Board of Directors whose determination shall be
conclusive) would exceed an amount equal to the greater of (i) the sum of
$5,000,000 or (ii) the difference between (a) the Cumulative Credit (as
defined above) and (b) the sum of the aggregate amount of all Restricted
Payments, and all Permitted Investments made pursuant to clause (v) of the
definition of "Permitted Investments," made on or after January 1, 1993 plus
1.2 times Cumulative Interest Expense (as defined above).
Mergers and Consolidations. The Indenture provides that Adelphia may not
consolidate with, merge with or into, or transfer all or substantially all of
its assets (as an entirety or substantially as an entirety in one transaction
or a series of related transactions), to any Person unless: (i) Adelphia shall
be the continuing Person, or the Person (if other than Adelphia) formed by
such consolidation or into which Adelphia is merged or to which the properties
and assets of Adelphia are transferred shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
all of the obligations of Adelphia under the Notes and the Indenture, and the
obligations under the Indenture shall remain in full force and effect; (ii)
immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction on a pro forma basis for
the most recent quarter, the pro forma Consolidated Fixed Charge Ratio of the
surviving entity shall be at least 1:1; provided that, if the Consolidated
Fixed Charge Ratio of Adelphia for the most recent quarter preceding such
transaction is within the range set forth in Column A below, then the pro
forma Consolidated Fixed Charge Ratio of the surviving entity after giving
effect to such transaction shall be at least equal to the greater of the
percentage of the Consolidated Fixed Charge Ratio of Adelphia for the most
recent quarter preceding such transaction set forth in Column B or the ratio
set forth in Column C below:
<TABLE>
<S> <C> <C>
A B C
----- ----- ------
1.1111:1 to 1.4999:1 90% 1.00:1
1.5 and higher 80% 1.35:1
</TABLE>
and provided, further, that if the pro forma Consolidated Fixed Charge Ratio
of the surviving entity is 2:1 or more, the calculation in the preceding
proviso shall be inapplicable and such transaction shall be deemed to have
complied with the requirements of such proviso.
In connection with any consolidation, merger or transfer contemplated by
this provision, Adelphia shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
Limitations on Investment in Affiliates and Unrestricted Subsidiaries. After
the date of the Indenture, Adelphia may not, nor will Adelphia allow any
Restricted Subsidiary to, make a Restricted Investment other than by way of
Permitted Investments unless pro forma for such Restricted Investment the
Leverage Ratio of Adelphia does not exceed 7.75:1.
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Covenant to Secure Notes Equally. The Indenture provides that except for
Liens created or assumed by Adelphia in connection with the acquisition of
real property or equipment to be used by Adelphia in the operation of its
business which do not secure Indebtedness in excess of the purchase price of
such real property or equipment, Adelphia covenants that, if it shall create
or assume any Lien upon any of its property or assets, whether now owned or
hereafter acquired, it will make or cause to be made effective provisions
whereby the Notes will be secured by such Lien equally and ratably with all
other Indebtedness of Adelphia secured by such Lien, as long as any such other
Indebtedness of Adelphia shall be so secured. The restriction imposed by this
covenant shall not apply with respect to a Lien, including a pledge of Capital
Stock of a Subsidiary or an Affiliate, to secure Indebtedness which is an
obligation of such Subsidiary or Affiliate and not an obligation of Adelphia.
Limitation on Transactions with Affiliates. The Indenture provides that
Adelphia will not, and will not permit any Restricted Subsidiary to, engage in
any transaction with any Affiliate upon terms which would be any less
favorable than those obtainable by Adelphia or a Restricted Subsidiary in a
comparable arm's-length transaction with a person which is not an Affiliate.
The Indenture provides that Adelphia will not, and will not permit any
Restricted Subsidiary to, engage in any transaction (or series of related
transactions) involving in the aggregate $1,000,000 or more with any Affiliate
except for (i) the making of any Restricted Payment, (ii) any transaction or
series of transactions between Adelphia and one or more of its Restricted
Subsidiaries or between two or more of its Restricted Subsidiaries (provided
that no more than 5% of the equity interest in any of its Restricted
Subsidiaries is owned by an Affiliate), and (iii) the payment of compensation
(including, without limitation, amounts paid pursuant to employee benefit
plans) for the personal services of officers, directors and employees of
Adelphia or any of its Restricted Subsidiaries, so long as the Board of
Directors of Adelphia in good faith shall have approved the terms thereof and
deemed the services theretofore or thereafter to be performed for such
compensation or fees to be fair consideration therefor; and provided further
that for any Asset Sale, or a sale, transfer or other disposition (other than
to Adelphia or any of its Restricted Subsidiaries) of an interest in a
Restricted Investment, involving an amount greater than $25,000,000, such
Asset Sale or transfer of interest in a Restricted Investment is for fair
value as determined by an opinion of a nationally recognized investment
banking firm filed with the Trustee. Notwithstanding the foregoing, the
Indenture provides that such provision will not prohibit any such transaction
which is determined by the independent members of the Board of Directors of
Adelphia, in their reasonable, good faith judgment (as evidenced by a Board
Resolution filed with the Trustee) to be (a) in the best interests of Adelphia
or such Restricted Subsidiary, and (b) upon terms which would be obtainable by
Adelphia or a Restricted Subsidiary in a comparable arm's-length transaction
with a Person which is not an Affiliate.
Limitation on Sale of Assets. The Indenture provides that neither Adelphia
nor a Restricted Subsidiary shall sell an asset (including Capital Stock of
Restricted Subsidiaries) or reclassify a Restricted Subsidiary existing on the
date of the Indenture as an Unrestricted Subsidiary (a "Reclassification")
unless (a) in the case of an asset sale, (i) at least 75% of the net proceeds
received by Adelphia or such Restricted Subsidiary is in cash, cash
equivalents or common or preferred Capital Stock or debt securities issued by
a Person which has Investment Grade Senior Debt, and (ii) cash proceeds from
the asset sale are used to reduce debt and such debt reduction results in
Adelphia's Leverage Ratio being lower pro forma after such asset sale than
prior to such asset sale, or (b) in the case of an asset sale or
Reclassification, pro forma for such asset sale or Reclassification the
Indebtedness of Adelphia and its Restricted Subsidiaries, on a consolidated
basis, shall not be more than 7.75 multiplied by Annualized Pro Forma EBITDA,
provided that in no case under either clause (a) or (b) shall Adelphia
undertake an asset sale or Reclassification, if pro forma for such an asset
sale or Reclassification Adelphia and its Restricted Subsidiaries would be the
owners of fewer than 75% of the cable systems (measured on the basis of basic
subscribers as of February 22, 1994) owned by Adelphia and its Restricted
Subsidiaries as of February 22, 1994, provided however, that Adelphia and its
Restricted Subsidiaries may sell additional assets of up to 10% of assets held
as of February 22, 1994 if the consideration received from such sale is (i)
cash which is used within 12 months to purchase additional systems of
equivalent value or (ii) other cable systems of equivalent value.
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Change of Control Offer. Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of a Change of Control Triggering
Event, Adelphia shall notify the Trustee in writing of such proposed
occurrence or occurrence, as the case may be, and shall make an offer to
purchase (the "Change of Control Offer") the Notes at a purchase price equal
to 100% of the principal amount thereof plus any accrued and unpaid interest
thereon to the Change of Control Payment Date (as hereinafter defined) (the
"Change of Control Purchase Price") in accordance with the procedures set
forth in this covenant.
Within 50 days of (i) the proposed occurrence of a Change of Control or (ii)
the occurrence of a Change of Control Triggering Event, Adelphia also shall
(a) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Jones News Service or similar business news service in the United
States and (b) send by first-class mail, postage prepaid, to the Trustee and
to each holder of the Notes, at his address appearing in the register of the
Notes maintained by the Registrar, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this
covenant and that all Notes tendered will be accepted for payment,
provided that a Change of Control Triggering Event has occurred and
otherwise subject to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the purchase date (which
shall be a Business Day no earlier than 50 days from the date such
notice is mailed and no later than 15 days after the date of the
corresponding Change of Control Triggering Event) (the "Change of
Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless Adelphia defaults in the payment of the Change of Control
Purchase Price, any Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender
the Notes to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding the
Change of Control Payment Date;
(6) that holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the
third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the principal amount of the Notes delivered for
purchase, and a statement that such holder is withdrawing his election
to have such Notes purchased;
(7) that holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, provided that each Note purchased and each
such new Note issued shall be in an original principal amount in
denominations of $1,000 and integral multiples thereof; and
(8) any other procedures that a holder must follow to accept a Change of
Control Offer or effect withdrawal of such acceptance.
Notwithstanding any other provision of this covenant, in the case of a
notice of a Change of Control Offer that is being furnished by Adelphia with
respect to a proposed Change of Control that has not yet actually occurred,
the Company may specify in such notice that holders of the Notes shall be
required to notify Adelphia, by a date not later than the date (the "Proposed
Change of Control Response Date") which is 30 days from the date of such
notice, as to whether such holders will tender their Notes for payment
pursuant to the Change of Control Offer and to notify Adelphia of the
principal amount of such Notes to be so tendered (with the failure of any
holder to so notify Adelphia within such 30-day period to be deemed an
election of such holder not to accept such Change of Control Offer). In such
event, Adelphia shall have the option, to be exercised by a subsequent
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<PAGE>
written notice to be sent, no later than 15 days after the Proposed Change of
Control Response Date, to the same Persons to whom the original notice of the
Change of Control Offer was sent, to cancel or otherwise effect the
termination of the proposed Change of Control and to rescind the related
Change of Control Offer, in which case the then outstanding Change of Control
Offer shall be deemed to be null and void and of no further effect.
On the Change of Control Payment Date, Adelphia shall (a) accept for payment
Notes or portions thereof tendered pursuant to the Change of Control Offer,
(b) deposit with the Paying Agent money sufficient to pay the purchase price
of all Notes or portions thereof so tendered and (c) deliver or cause to be
delivered to the Trustee Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof tendered to Adelphia. The
Paying Agent shall promptly mail to each holder of Notes so accepted payment
in an amount equal to the purchase price for such Notes, and the Trustee shall
promptly authenticate and mail to such holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered; provided that each
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof.
There shall be no purchase of any Notes pursuant to this covenant if there
has occurred (prior to, on or after, as the case may be, the tender of such
Notes pursuant to the Change of Control Offer, by the holders of such Notes)
and is continuing an Event of Default. The Paying Agent will promptly return
to the respective holders thereof any Notes (a) the tender of which has been
withdrawn in compliance with the Indenture or (b) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Change of Control Purchase Price with respect to such Notes).
Because a "Change of Control" for purposes of this covenant is defined in
terms of "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act) of voting power, there may be circumstances in which the Rigas Family
could beneficially own (for purposes of Rule 13d-3) more than 35% of the
outstanding voting Capital Stock of Adelphia through options, warrants or
other purchase rights while directly holding 35% or less of the total voting
power required to elect or designate for election a majority of Adelphia's
Board of Directors, without a Change of Control Triggering Event occurring.
Further, a change in the composition of the Board of Directors of Adelphia
could occur without the occurrence of a Change of Control Triggering Event if
either the election or the nomination of the new directors was approved by
two-thirds of the continuing directors or by the Rigas Family and its
Affiliates. See "Certain Definitions--Change of Control."
The indentures for the 9 7/8% Notes, the 12 1/2% Notes, the 10 1/4% Notes,
the 9 1/2% Notes, the 11 7/8% Debentures and the 9 7/8% Debentures, which
together represented outstanding indebtedness in the aggregate principal
amount of approximately $1,155,000,000 as of June 30, 1997, provide that
Adelphia must make an offer to purchase such Notes and Debentures,
respectively, at a purchase price equal to 100% of the principal amount
thereof, plus any accrued but unpaid interest thereon, in the event of
circumstances identical to those which trigger a Change of Control Offer under
this covenant. In addition, the credit agreements of Adelphia's subsidiaries
generally contain provisions under which circumstances that would trigger a
Change of Control Offer under this covenant would constitute an event of
default under such credit agreements. In the event that Adelphia is required
to purchase the 9 7/8% Notes, the 10 1/2% Notes, the 12 1/2% Notes, the 10
1/4% Notes, the 9 1/2% Notes, 11 7/8% Debentures, 9 7/8% Debentures and the
Notes in accordance with such provisions, and the indebtedness under such
subsidiary credit agreements were to be accelerated, the source of funds for
such purchases or payments will be Adelphia's available cash, cash generated
from Adelphia's operating activities, and other sources including borrowings,
asset sales or equity sales. There can be no assurance that sufficient funds
would be available to make any required repurchases under the Indenture and
under the indentures for the 9 7/8% Notes, the 10 1/2% Notes, the 12 1/2%
Notes, the 10 1/4% Notes, the 9 1/2% Notes, the 11 7/8% Debentures and the 9
7/8% Debentures or any such required payments under such credit agreements.
Although in the past Adelphia has been able to both refinance its indebtedness
or obtain new financing, there can be no assurance that Adelphia would be able
to do so under such circumstances or that, if Adelphia were able to do so, the
terms would be favorable to Adelphia. In the event that Adelphia is required
to make a Change of Control Offer, Adelphia will comply with all applicable
tender offer rules including Rule 14e-1 under the Exchange Act, to the extent
applicable.
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EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(i) default in payment of any principal of the Notes; (ii) default for 30 days
in payment of any interest on the Notes; (iii) default by Adelphia in the
observance or performance of any other covenant in the Notes or the Indenture
for 60 days after written notice from the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding; (iv)
failure to pay when due principal, interest or premium aggregating $10,000,000
or more with respect to any Indebtedness of Adelphia or any Restricted
Subsidiary or the acceleration of any such Indebtedness which default shall
not be cured or waived, or such acceleration shall not be rescinded or
annulled, within ten days after written notice as provided in the Indenture;
(v) any final judgment or judgments for the payment of money in excess of
$10,000,000 shall be rendered against Adelphia or any Restricted Subsidiary
and shall not be discharged for any period of 60 consecutive days during which
a stay of enforcement shall not be in effect; or (vi) certain events involving
bankruptcy, insolvency or reorganization of Adelphia or any Restricted
Subsidiary with liabilities of greater than $10,000,000 under generally
accepted accounting principles as of the date of such bankruptcy, insolvency
or reorganization. The Indenture provides that the Trustee may withhold notice
to the holders of the Notes of any default (except in payment of principal or
interest on the Notes) if the Trustee considers it to be in the best interest
of the holders of the Notes to do so.
The Indenture provides that if an Event of Default (other than an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization) shall have occurred and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may declare to be immediately due and payable the principal amount
of all the Notes then outstanding plus accrued but unpaid interest to the date
of acceleration; provided, however, that after such acceleration but before a
judgment or decree based on acceleration is obtained by the Trustee, the
holders of a majority in aggregate principal amount of outstanding Notes may,
under certain circumstances, rescind and annul such acceleration if all Events
of Default, other than the nonpayment of accelerated principal or interest,
have been cured or waived as provided in the Indenture. In case an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization shall occur, such amount with respect to all of the Notes shall
be due and payable immediately without any declaration or other act on the
part of the Trustee or the holders of Notes.
The holders of a majority in principal amount of the Notes then outstanding
shall have the right to waive any existing default or compliance with any
provision of the Indenture or the Notes and to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
subject to certain limitations specified in the Indenture.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder
shall have previously given to the Trustee written notice of a continuing
Event of Default and unless also the holders of at least 25% in aggregate
principal amount of the outstanding Notes shall have made written request and
offered reasonable indemnity to the Trustee to institute such proceeding as a
trustee, and unless the Trustee shall not have received from the holders of a
majority in aggregate principal amount of the outstanding Notes a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a holder of a Note for enforcement of payment of the principal
of or interest on such Note on or after the respective due dates expressed in
such Note.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that Adelphia may elect either (a) to defease and be
discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of such Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold monies for payment in trust)
("defeasance") or (b) to be released from its obligations with respect to the
Notes under certain covenants contained in the Indenture and described above
under "Covenants" ("covenant defeasance"), upon the deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, of money and/or U.S.
Government Obligations which through the payment of principal and
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interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of and interest on the Notes, on the scheduled
due dates therefor in accordance with the terms of the Indenture. Such a trust
may only be established if, among other things, Adelphia has delivered to the
Trustee an Opinion of Counsel (as specified in the Indenture) to the effect
that the holders of the Notes or persons in their positions 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. Such
opinion, in the case of defeasance under clause (a) above, must refer to and
be based upon a private ruling of the Internal Revenue Service concerning the
Notes or a ruling of general effect published by the Internal Revenue Service.
MODIFICATION OF INDENTURE
From time to time, Adelphia and the Trustee may, without the consent of
holders of the Notes, amend the Indenture or the Notes or supplement the
Indenture for certain specified purposes, including providing for
uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any holder. The Indenture
contains provisions permitting Adelphia and the Trustee, with the consent of
holders of at least one-half in principal amount of the outstanding Notes, to
modify or supplement the Indenture or the Notes, except that no such
modification shall, without the consent of each holder affected thereby, (i)
reduce the amount of Notes whose holders must consent to an amendment,
supplement, or waiver to the Indenture or the Notes, (ii) reduce the rate of
or change the time for payment of interest on any Note, (iii) reduce the
principal of or change the stated maturity of any Note, (iv) make any Note
payable in money other than that stated in the Note or change the place of
payment from New York, New York, (v) change the amount or time of any payment
required by the Notes or provide for the redemption of the Notes prior to
maturity, (vi) waive a default on the payment of the principal of, interest
on, or redemption payment with respect to any Note, or (vii) take any other
action otherwise prohibited by the Indenture to be taken without the consent
of each holder affected thereby.
REPORTS TO HOLDERS
So long as Adelphia is subject to the periodic reporting requirements of the
Exchange Act it will continue to furnish the information required thereby to
the Commission and to the holders of the Notes. The Indenture provides that
even if Adelphia is entitled under the Exchange Act not to furnish such
information to the Commission or to the holders of the Notes, it will
nonetheless continue to furnish such information to the Commission (at such
time as it would be required to file such reports under the Exchange Act) and
to the Trustee and the holders of the Notes (within 15 days thereafter as
required by the Indenture) as if it were subject to such periodic reporting
requirements.
COMPLIANCE CERTIFICATE
Adelphia will deliver to the Trustee on or before 105 days after the end of
its fiscal year and on or before 50 days after the end of its second fiscal
quarter in each year an Officer's Certificate stating whether or not the
signers know of any Default or Event of Default that has occurred. If they do,
the certificate will describe the Default or Event of Default and its status.
THE TRUSTEE
Bank of Montreal Trust Company is to be the Trustee under the Indenture and
has been appointed by Adelphia as Registrar and Paying Agent with regard to
the Notes. Bank of Montreal Trust Company also serves as Registrar and Paying
Agent and Trustee under the indentures with respect to the 9 7/8% Notes, the
10 1/2% Notes, the 12 1/2% Senior Notes, the 10 1/4% Notes, the 9 1/2% Notes,
the 11 7/8% Debentures and the 9 7/8% Debentures. The Indenture provides that,
except during the continuance of an Event of Default, the Trustee will perform
only such duties as are specifically set forth in the Indenture. During the
existence of an Event of
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Default, the Trustee will exercise such rights and powers vested in it under
the Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
BOOK-ENTRY, DELIVERY AND FORM
The Notes were initially offered and sold to qualified institutional buyers
in reliance on Rule 144A. Except as set forth below, the Notes will be issued
in registered, global form in minimum denominations of $1,000 and integral
multiples thereof.
The New Notes initially will be represented by one or more Notes, in
registered, global form without interest coupons (the "Global Note"). The
Global Note will be deposited with, or on behalf of, DTC in New York, New
York, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC as described
below.
Except as set forth below, the Global Note may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Note may not be exchanged for
Notes in certificated form except in the limited circumstances described
below. See "--Exchange of Book-Entry Notes for Certificated Notes."
The Old Notes (including beneficial interests in the Global Note) are
subject to certain restrictions on transfer and will bear a restrictive
legend. In addition, transfer of beneficial interests in the Global Note will
be subject to the applicable rules and procedures of DTC and its direct or
indirect participants, which may change from time to time.
Initially, the Trustee will act as Paying Agent and Registrar for the Notes.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar.
DEPOSITORY PROCEDURES
DTC has advised Adelphia that DTC is a limited-purpose trust company created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers
and dealers (including the Initial Purchaser), banks, trust companies,
clearing corporations and certain other organizations. Access to DTC's system
is also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests and transfer of ownership
interests of each actual purchaser of each security held by or on behalf of
DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised Adelphia that, pursuant to procedures established by
it, (i) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchaser with portions of the
principal amount of the Global Notes and (ii) ownership of such interests in
the Global Notes will be shown on, and the transfer of ownership thereof will
be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Notes).
Investors in the Global Notes may hold their interests therein directly
through DTC, if they are participants in such system, or indirectly through
organizations which are participants in such system. All interests in a Global
Note may be subject to the procedures and requirements of DTC. The laws of
some states require that certain persons take physical delivery in definitive
form of securities that they own. Consequently, the ability to transfer
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beneficial interests in a Global Note to such persons will be limited to that
extent. Because DTC can act only on behalf of Participants, which in turn act
on behalf of Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Note to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests. For certain other restrictions
on the transferability of the Notes, see "--Exchange of Book-Entry Notes for
Certificated Notes", "--Exchange of Certificated Notes for Book-Entry Notes."
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of and premium and Liquidated Damages,
if any, and interest on a Global Note registered in the name of DTC or its
nominee will be payable by the Trustee to DTC in its capacity as the
registered Holder under the Indenture. Under the terms of the Indenture,
Adelphia and the Trustee will treat the persons in whose names the Notes,
including the Global Notes, are registered as the owners thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither Adelphia, the Trustee nor any agent of
Adelphia or the Trustee has or will have any responsibility or liability for
(i) any aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial ownership
interests in the Global Notes, or for maintaining, supervising or reviewing
any of DTC's records or any Participant's or Indirect Participant's records
relating to the beneficial ownership interests in the Global Notes or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised Adelphia that its
current practice, upon receipt of any payment in respect of securities such as
the Notes (including principal and interest), is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in the principal amount of
beneficial interests in the relevant security as shown on the records of DTC
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Trustee
or Adelphia. Neither Adelphia nor the Trustee will be liable for any delay by
DTC or any of its Participants in identifying the beneficial owners of the
Notes, and Adelphia and the Trustee may conclusively rely on and will be
protected in relying on instructions from DTC or its nominee for all purposes.
Interests in the Global Notes are expected to be eligible to trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its participants. See "--Same-Day
Settlement and Payment."
Subject to the transfer restrictions on the Old Notes, transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised Adelphia that it will take any action permitted to be taken
by a Holder of Notes only at the direction of one or more Participants to
whose account with DTC interests in the Global Notes are credited and only in
respect of such portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the Notes, DTC reserves the
right to exchange the Global Notes for legended Notes in certificated form,
and to distribute such Notes to its Participants.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that Adelphia believes to be reliable, but
Adelphia takes no responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Notes among participants in DTC, it is under no
obligation to perform or to continue to perform such procedures, and
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such procedures may be discontinued at any time. Neither Adelphia nor the
Trustee will have any responsibility for the performance by DTC or its
respective participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive Notes in registered
certificated form if (i) DTC (a) notifies Adelphia that it is unwilling or
unable to continue as depositary for the Global Note and Adelphia thereupon
fails to appoint a successor depositary or (b) has ceased to be a clearing
agency registered under the Exchange Act, (ii) Adelphia, at its option,
notifies the Trustee in writing that it elects to cause the issuance of the
Notes in certificated form or (iii) there shall have occurred and be
continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default with respect to the Notes. In
addition, beneficial interests in a Global Note may be exchanged for
certificated Notes upon request but only upon at least 20 days prior written
notice given to the Trustee by or on behalf of DTC in accordance with its
customary procedures. In all cases, certificated Notes delivered in exchange
for any Global Note or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the depositary (in accordance with its customary procedures) and will bear any
applicable restrictive legend, unless Adelphia determines otherwise in
compliance with applicable law.
EXCHANGE OF CERTIFICATED NOTES FOR BOOK ENTRY NOTES
Notes issued in certificated form may not be exchanged for beneficial
interests in any Global Note unless the transferor first delivers to the
Trustee a written certificate (in the form provided in the Indenture) to the
effect that such transfer will comply with the appropriate transfer
restrictions applicable to such Notes.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes represented by
the Global Notes (including principal, premium, if any, interest and
Liquidated Damages, if any) be made by wire transfer of immediately available
funds to the accounts specified by the Global Note custodian. With respect to
Notes issued in definitive form, Adelphia will make all payments of principal,
premium, interest and Liquidated Damages, if any, by mailing a check to each
such Holder's registered address, provided that all payments with respect to
Notes have an aggregate principal amount of $1,000 or more, the Holders of
which have given wire transfer instructions to Adelphia at least ten business
days prior to the applicable payment date, will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof. See "General." The Notes represented by the Global Notes are
expected to be eligible to trade in DTC's Same-Day Funds Settlement System,
and any permitted secondary market trading activity in such notes will,
therefore, be required by DTC to be settled in immediately available funds.
Adelphia expects that secondary trading in the Certificated Notes also will be
settled in immediately available funds.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain federal income tax
considerations relevant to the exchange of the Old Notes for the New Notes,
but does not purport to be a complete analysis of all potential tax effects.
The discussion is based upon the United States Internal Revenue Code of 1986,
as amended, (the "Code"), Treasury Regulations, Internal Revenue Service
("IRS") rulings and pronouncements and judicial decisions now in effect, all
of which are subject to change at any time by legislative, judicial or
administrative action. Any such changes may be applied retroactively in a
manner that could adversely affect a holder of the New Notes. The following
discussion assumes that holders hold the Old Notes and the New Notes as
capital assets within the meaning of Section 1221 of the Code.
The Company has not sought and will not seek any rulings from the IRS with
respect to the positions of the Company discussed below. There can be no
assurance that the IRS will not take a different position concerning the tax
consequences of the exchange of the Old Notes for the New Notes or that any
such position would not be sustained.
The tax treatment of a holder may vary depending on his or its particular
situation or status. This summary does not address the tax consequences to
taxpayers who are subject to special rules such as insurance companies, tax-
exempt organizations, financial institutions, broker-dealers, foreign entities
and individuals, persons holding Old Notes or New Notes as a part of a hedging
or conversion transaction or a straddle and holders whose "functional
currency" is not the U.S. dollar, or aspects of federal income taxation that
may be relevant to a prospective investor based upon such investor's
particular tax situation. In addition, the description does not consider the
effect of any applicable foreign, state, local or other tax laws.
EACH HOLDER SHOULD CONSULT HIS OR ITS OWN TAX ADVISER AS TO THE PARTICULAR
TAX CONSEQUENCES TO HIM OR IT OF EXCHANGING OLD NOTES FOR NEW NOTES, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
EXCHANGE
The exchange of the New Notes for Old Notes pursuant to the Exchange Offer
will not constitute a recognition event for federal income tax purposes.
Consequently, no gain or loss will be recognized by holders upon receipt of
the New Notes. For purposes of determining gain or loss upon the subsequent
exchange of New Notes, a holder's basis in the New Notes will be the same as a
holder's basis in the Old Notes exchanged therefor. Holders will be considered
to have held the New Notes from the time of their original acquisition of the
Old Notes. As used herein, the term "Senior Note" refers to both an Old Note
and a New Note received in exchange therefor.
INTEREST ON THE NEW NOTES
A holder of a New Note will be required to report as income for federal
income tax purposes interest earned on a New Note in accordance with the
holder's method of tax accounting. A holder of a New Note using the accrual
method of accounting for tax purposes is, as a general rule, required to
include interest in ordinary income as such interest accrues. A cash basis
holder must include interest in income when cash payments are received by (or
made available to) such holder.
MARKET DISCOUNT
If a holder acquired an Old Note at a market discount (i.e., at a price less
than the stated redemption price at maturity of the Old Note), the Old Note is
subject to the market discount rules of the Code unless the market discount is
de minimis. Market discount is de minimis if it is less than one quarter of
one percent of the principal amount of the Old Note multiplied by the number
of complete years to maturity after the holder acquired the Old Note. If the
holder exchanges an Old Note that has more than de minimis market discount for
a New Note,
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the New Note also will be subject to the market discount rules of the Code.
New Notes purchased by a subsequent purchaser also will be subject to the
market discount rules if the New Notes are purchased with more than a de
minimis amount of market discount. Notes that have more than de minimis market
discount are herein referred to as "Market Discount Notes."
Any gain recognized on the maturity, sale or other disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on the Market Discount Note. The
amount of market discount treated as having accrued will be determined either
(i) on a ratable basis by multiplying the market discount times a fraction,
the numerator of which is the number of days the New Note was held by the
Holder and the denominator of which is the total number of days after the date
such Holder acquired the New Note up to and including the date of its
maturity, or (ii) if the Holder so elects, on a constant interest rate method.
A Holder may elect to include market discount in income currently over the
life of the Market Discount Note. Such an election shall apply to all debt
instruments with market discount acquired by the holder on or after the first
day of the first taxable year to which the election applies and all subsequent
taxable years. This election may not be revoked without the consent of the
IRS. Market discount will accrue on a ratable inclusion basis unless the
holder elects to accrue market discount on a constant yield to maturity basis.
Such an election shall apply only to the Market Discount Note with respect to
which it is made and may not be revoked without the consent of the IRS. If an
election is made to include market discount in income currently, the basis of
the New Note in the hands of the holder will be increased by the market
discount thereon as it is included in income. A holder who does not elect to
include market discount in income currently generally will be required to
defer deductions for interest on borrowings allocable to a Market Discount
Note in an amount not exceeding the accrued market discount on the Market
Discount Note until the maturity or disposition of the Market Discount Note.
AMORTIZABLE BOND PREMIUM
A holder that purchased an Old Note for an amount in excess of its principal
amount may elect to treat such excess as "amortizable bond premium," in which
case the amount required to be included in the holder's income each year with
respect to interest on the Old Note will be reduced by the amount of
amortizable bond premium allocable (based on the yield to maturity of the Old
Note) to such year. If a holder made an election to amortize bond premium with
respect to an Old Note and exchanges the Old Note for a New Note pursuant to
the Exchange Offer, the election will apply to the New Note. A holder who
exchanges an Old Note for which an election has not been made for a New Note,
and a subsequent purchaser of a New Note, may also elect to amortize bond
premium if the holder acquired the Note for an amount in excess of its
principal amount. Any election to amortize bond premium shall apply to all
bonds (other than bonds the interest on which is excludable from gross income)
held by the holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the holder, and is irrevocable
without the consent of the IRS.
DISPOSITION OF THE NOTES
Subject to the market discount rules discussed above, a holder of Senior
Notes will recognize gain or loss upon the sale, redemption, retirement or
other disposition of such securities equal to the difference between (i) the
amount of cash and the fair market value of the property received (except to
the extent attributable to the payment of accrued interest) and (ii) the
holder's adjusted tax basis in the securities. Gain or loss recognized will be
capital gain or loss provided the Notes are held as capital assets by the
holder, and will be long-term capital gain or loss if the holder has held such
securities (or is treated as having held such securities) for more than one
year.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Holders of the Senior Notes may be subject to backup withholding at a rate
of 31% with respect to interest paid on the Senior Notes unless such holder
(a) is a corporation or comes within certain other exempt categories
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and, when required, demonstrates this fact or (b) provides a correct taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with the requirements of the backup
withholding rules.
The Company will report to the holders of the Senior Notes and the IRS the
amount of any "reportable payment" for each calendar year and amount of tax
withheld, if any, with respect to payments on the Senior Notes.
EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES TO IT OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE
SENIOR NOTES (INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN,
AND OTHER TAX LAWS).
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of the New Notes. 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 Notes received in exchange for Old Notes
acquired as a result of market-making activities or other trading activities.
The Company has agreed that it will make this Prospectus available to any
broker-dealer for use in connection with any such resale for a period of 365
days after the Expiration Date or until all participating broker-dealers have
so resold.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes 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 Notes 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 concession from any
such broker-dealer and/or the purchasers of any New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant
to the Exchange Offer and any broker-dealer that participates in a
distribution of New Notes may be deemed to be an "underwriter" within the
meaning of the Securities Act, and any profit on any resale of New Notes 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.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and
to the best of the Company's information and belief, each person participating
in the Exchange Offer is acquiring the New Notes in its ordinary course of
business and has no arrangement or understanding with any person to
participate in the distribution of the New Notes to be received in the
Exchange Offer.
LEGAL MATTERS
The validity of the New Notes will be passed upon on behalf of the Company
by Buchanan Ingersoll Professional Corporation, Pittsburgh, Pennsylvania.
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EXPERTS
The consolidated financial statements and the related financial statement
schedules of Adelphia and its subsidiaries as of March 31, 1996 and 1997, and
for each of the three years in the period ended March 31, 1997, and the
consolidated financial statements of Olympus Communications, L.P. and its
subsidiaries as of December 31, 1995 and 1996, and for each of the three years
in the period ended December 31, 1996, all incorporated in this Prospectus by
reference from Adelphia's Annual Report on Form 10-K for the year ended March
31, 1997, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE ACCOMPANYING
LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE REGISTRANT. NEI-
THER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE REGISTRANT SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF. NEITHER THIS PROSPECTUS NOR THE ACCOMPANY-
ING LETTER OF TRANSMITTAL CONSTITUTES AN OFFER OR SOLICITATION 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 ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Incorporation by Reference................................................. 4
Prospectus Summary......................................................... 5
The Exchange Offer......................................................... 8
Summary Description of the Notes .......................................... 11
Risk Factors............................................................... 13
The Exchange Offer......................................................... 18
Use of Proceeds............................................................ 26
Capitalization............................................................. 27
Selected Consolidated Financial Data....................................... 28
Description of the Notes................................................... 31
Certain Federal Income Tax Considerations.................................. 49
Plan of Distribution....................................................... 51
Legal Matters.............................................................. 51
Experts.................................................................... 52
</TABLE>
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ADELPHIA
COMMUNICATIONS
CORPORATION
9 1/4% SERIES B SENIOR NOTES
DUE 2002
----------------
PROSPECTUS
----------------
, 1997
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides in general that
a corporation may indemnify its directors, officers, employees or agents
against expenditures (including judgments, fines, amounts paid in settlement
and attorneys' fees) made by them in connection with certain lawsuits to which
they may be made parties by reason of their being directors, officers,
employees or agents and shall so indemnify such persons against expenses
(including attorneys' fees) if they have been successful on the merits or
otherwise. The bylaws of Adelphia provide for indemnification of the officers
and directors of Adelphia to the full extent permissible under Delaware law.
Adelphia's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Adelphia
shall not be personally liable to Adelphia, respectively, or its stockholders
for monetary damages for breach of fiduciary duty as a director for acts or
omissions, provided that directors shall nonetheless be liable for breaches of
the duty of loyalty, bad faith, intentional misconduct, knowing violations of
law, unlawful distributions to stockholders, or transactions from which a
director derived an improper personal benefit.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
3.01 Certificate of Incorporation of Adelphia Communications
Corporation (Incorporated herein by reference is Exhibit 3.01 to
the Registrant's Current Report on Form 8-K dated July 24, 1997.)
(File Number 0-16014)
3.02 Bylaws of Adelphia Communications Corporation (Incorporated herein
by reference is Exhibit 3.02 to Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1994.) (File Number 0-
16014)
4.01 Indenture, dated as of February 26, 1997, between the Registrant
and Bank of Montreal Trust Company with respect to the
Registrant's 9 7/8% Senior Notes Due 2007 (Incorporated herein by
reference is Exhibit 4.01 to Registrant's Current Report on Form
8-K dated May 1, 1997.) (File Number 0-16014)
4.02 Form of Note with respect to the Registrant's 9 7/8% Senior Notes
Due 2007 (contained in Indenture filed as Exhibit 4.01.)
4.03 Registration Rights Agreement, dated as of February 26, 1997,
between the Registrant and the Initial Purchaser with respect to
the Registrant's 9 7/8% Senior Notes Due 2007 (Incorporated herein
by reference is Exhibit 10.01 to Registrant's Current Report on
Form 8-K dated May 1, 1997.) (File Number 0-16014)
4.04 First Supplemental Indenture, dated as of May 4, 1994, with
respect to Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Current Report on Form 8-K dated May 5, 1994.) (File Number 0-
16014)
4.05 Indenture, dated as of February 22, 1994, with respect to
Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004
(Incorporated herein by reference is Exhibit 4.05 to Registration
Statement No. 33-52513 on Form S-4.)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
4.06 Indenture, dated as of July 28, 1993, with respect to Registrant's
10 1/4% Senior Notes Due 2000 (Incorporated herein by reference is
Exhibit 4.01 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993.) (File Number 0-16014)
4.07 Amended and Restated Indenture, dated as of May 11, 1993, with
respect to Registrant's 9 7/8% Senior Debentures Due 2005
(Incorporated herein by reference is Exhibit 4.01 to Registrant's
Annual Report on Form 10-K for the fiscal year ended March 31,
1993.) (File Number 0-16014)
4.08 Indenture, dated as of September 2, 1992, with respect to the
Registrant's 11 7/8% Senior Debentures Due 2004 (Incorporated
herein by reference is Exhibit 4.03 to Registration Statement No.
33-52630 on Form S-1.)
4.09 Indenture, dated as of May 7, 1992, with respect to the
Registrant's 12 1/2% Senior Notes Due 2002 (Incorporated herein by
reference is Exhibit 4.03 to Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1992.) (File Number 0-
16014)
4.10 Indenture, dated as of April 15, 1996, between Hyperion
Telecommunications, Inc. and Bank of Montreal Trust Company
(Incorporated by reference is Exhibit 4.1 to Registration
Statement No. 333-06957 on Form S-4 filed for Hyperion
Telecommunications, Inc.)
4.11 Form of 13% Hyperion Telecommunications, Inc. Senior Discount
Notes (Incorporated herein by reference is Exhibit 4.3 to Hyperion
Telecommunications, Inc.'s Registration Statement No. 333- 12619
on Form S-1.)
4.12 First Supplemental Indenture, dated as of September 11, 1996,
between Hyperion Telecommunications, Inc. and Bank of Montreal
Trust Company (Incorporated herein by reference is Exhibit 4.2 of
Hyperion Telecommunications, Inc.'s Registration Statement No.
333-12619 on Form S-1.)
4.13 Indenture, dated as of November 12, 1996, between Olympus
Communications, L.P., Olympus Capital Corporation and Bank of
Montreal Trust Company (Incorporated herein by reference is
Exhibit 10.02 to Registrant's Current Report on Form 8-K dated
December 16, 1996.) (File Number 0-16014)
4.14 Certificate of Designations for 13% Series A and Series B
Cumulative Exchangeable Preferred Stock (Contained in Exhibit 3.01
to Registrant's Current Report on Form 8-K dated July 24, 1997,
which is incorporated herein by reference.) (File Number 0-16014)
4.15 Certificate of Designations for Series C Convertible Preferred
Stock (Contained in Exhibit 3.01 to Registrant's Current Report on
Form 8-K dated July 24, 1997, which is incorporated herein by
reference.) (File Number 0-16014)
4.16 Indenture, dated as of July 7, 1997, with respect to the
Registrant's 10 1/2% Senior Notes due 2004, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.03 from the Registrant's Current Report on
Form 8-K dated July 24, 1997.) (File Number 0-16014)
4.17 Form of 10 1/2% Senior Note due 2004 (Contained in Exhibit 4.03 to
Registrant's Current Report on Form 8-K dated July 24, 1997 which
is incorporated herein by reference.) (File Number 0-16014)
4.18 Form of Indenture, with respect to the Registrant's 13% Senior
Subordinated Exchange Debentures due 2009, between the Registrant
and the Bank of Montreal Trust Company (Contained in Exhibit 3.01
as Annex A to Registrant's Current Report on Form 8-K dated July
24, 1997, which is incorporated herein by reference.) (File Number
0-16014)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
4.19 Form of Certificate for 13% Cumulative Exchangeable Preferred
Stock (Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.)
(File Number 0-16014)
4.20 Form of Certificate for Series C Convertible Preferred Stock
(Incorporated herein by reference is Exhibit 4.06 from the
Registrant's Current Report on Form 8-K dated July 24, 1997.)
(File Number 0-16014)
4.21 Indenture, dated as of August 27, 1997, with respect to Hyperion
Telecommunications, Inc. ("Hyperion") 12 1/4% Senior Secured Notes
due 2004, between Hyperion and the Bank of Montreal Trust Company
(Incorporated herein by reference to Exhibit 4.01 to Hyperion's
Current Report on Form 8-K dated August 27, 1997.) (File No. 0-
21605)
4.22 Form of 12 1/4% Senior Secured Note due 2004 (contained in Exhibit
4.21).
4.23 Second Supplemental Indenture, dated as of August 27, 1997,
between Hyperion and the Bank of Montreal Trust Company, regarding
Hyperion's 13% Senior Discount Notes due 2003 (Incorporated by
reference herein to Exhibit 4.06 to Hyperion's Current Report on
Form 8-K dated August 27, 1997.) (File No. 0-21605)
4.25 Indenture, dated as of September 25, 1997, with respect to the
Registrant's 9 1/4% Senior Notes due 2002, between the Registrant
and the Bank of Montreal Trust Company (Incorporated herein by
reference is Exhibit 4.01 from the Registrant's Current Report on
Form 8-K, dated September 25, 1997.) (File Number 0-16014)
4.26 Registration Rights Agreement between Adelphia Communications
Corporation and the Initial Purchaser, dated September 25, 1997,
regarding the Registrant's 9 1/4% Senior Notes due 2002
(Incorporated herein by reference is Exhibit 4.02 from the
Registrant's Current Report on Form 8-K, dated September 25,
1997.) (File Number 0-16014)
4.27 Form of 9 1/4% Senior Note due 2002 (contained in Exhibit 4.25)
5.01* Opinion of Buchanan Ingersoll Professional Corporation
10.01 Class B Common Stockholders Agreement (Incorporated herein by
reference is Exhibit 10.01 to Registration Statement No. 33-6974
on Form S-1.)
10.02 Joinder to Class B Common Stockholders Agreement (Incorporated
herein by reference is Exhibit 10.02 to Registrant's Annual Report
on Form 10-K for the fiscal year ended March 31, 1994.) (File
Number 0-16014)
10.03 Registration Rights Agreement and Amendment to Registration Rights
Agreement (Incorporated herein by reference are Exhibit 10.02 to
Registration Statement No. 33-6974 on Form S-1 and Exhibit 10.35
to Registration Statement No. 33-25121 on Form S-1.)
10.04 Form of Management Agreement for Managed Companies (Incorporated
herein by reference is Exhibit 10.04 to the Registrant's Annual
Report on Form 10-K for fiscal year ended March 31, 1996.) (File
Number 0-16014)
10.05 Management Agreement--Montgomery Cablevision Associates, L.P.
(Incorporated herein by reference is Exhibit 10.08 to Registration
Statement No. 33-6974 on Form S-1.)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.06 Management Agreement--Adelphia Cablevision Associates of Radnor,
L.P. (Incorporated herein by reference is Exhibit 10.09 to
Registration Statement No. 33-6974 on Form S-1.)
10.07 Stock Option Plan of 1986, as amended (Incorporated herein by
reference is Exhibit 10.07 to Registration Statement No. 33-46551
on Form S-1.)
10.08 Restricted Stock Bonus Plan, as amended (Incorporated herein by
reference is Exhibit 10.08 to Registration Statement No. 33-46551
on Form S-1.)
10.09 Business Opportunity Agreement (Incorporated herein by reference
is Exhibit 10.13 to Registration Statement No. 33-3674 on Form S-
1.)
10.10 Employment Agreement between the Company and John J. Rigas
(Incorporated herein by reference is Exhibit 10.14 to Registration
Statement No. 33-6974 on Form S-1.)
10.11 Employment Agreement between the Company and Daniel R. Milliard
(Incorporated herein by reference is Exhibit 10.15 to Registration
Statement No. 33-6974 on Form S-1.)
10.12 Employment Agreement between the Company and Timothy J. Rigas
(Incorporated herein by reference is Exhibit 10.16 to Registration
Statement No. 33-6974 on Form S-1.)
10.13 Employment Agreement between the Company and Michael J. Rigas
(Incorporated herein by reference is Exhibit 10.17 to Registration
Statement No. 33-6974 on Form S-1.)
10.14 Employment Agreement between the Company and James P. Rigas
(Incorporated herein by reference is Exhibit 10.18 to Registration
Statement No. 33-6974 on Form S-1.)
10.15 Agreement Regarding Management Fees relating to the subsidiaries
of Chauncey Communications Corporation (Incorporated herein by
reference is Exhibit 10.16 of Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1991.) (File Number 0-
16014)
10.16 Form of Note Agreement, dated as of August 1, 1990, relating to
the 10.66% Senior Secured Notes due August 1, 1998, of Chauncey
Communications Corporation (Incorporated herein by reference is
Exhibit 10.01 of Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990.) (File Number 0-16014)
10.17 Amendatory Agreement regarding Chauncey Communications Corporation
10.66% Senior Secured Note Agreement, dated as of August 6, 1991
(Incorporated herein by reference is Exhibit 10.02 of Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1991.) (File Number 0-16014)
10.18 $50,000 Term Note and Pledge Agreement between Adelphia
Communications Corporation as lender and Daniel R. Milliard, dated
October 1, 1988 (Incorporated herein by reference is Exhibit 10.03
of Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1991.) (File Number 0-16014)
10.19 $205,000 Revolving Term Note and Pledge Agreement among Adelphia
Communications Corporation as lender, Daniel R. Milliard and David
Acker (Incorporated herein by reference is Exhibit 10.04 of
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1991.) (File Number 0-16014)
10.20 Olympus Communications, L.P. Second Amended and Restated Limited
Partnership Agreement, dated as of February 28, 1995 (Incorporated
herein by reference is Exhibit 10.32 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1995.)
(File Number 0-16014)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
10.21 Credit, Security and Guaranty Agreement among UCA Corp. and
certain of its Affiliates and First Union National Bank of North
Carolina as Administrative Agent, dated as of March 15, 1995
(Incorporated herein by reference is Exhibit 10.32 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1995.) (File Number 0-16014)
10.22 Revolving Credit Facility among Adelphia Cable Partners, L.P.,
Southwest Florida Cable, Inc., West Boca Acquisition Limited
Partnership and Toronto-Dominion (Texas), Inc., as Administrative
Agent, dated May 12, 1995 (Incorporated herein by reference is
Exhibit 10.03 to Registrant's Current Report on Form 8-K dated
June 30, 1995.) (File Number 0-16014)
10.23 Credit Agreement, dated as of October 27, 1995, among Plato
Communications, Inc. Northeast Cable, Inc., Robinson/Plum
Cablevision L.P., the several other banks and other financial
institutions from time to time parties to this agreement and
Chemical Bank, as Administrative Agent (Incorporated herein by
reference is Exhibit 10.35 to Registrant's Current Report on Form
8-K dated December 7, 1995.) (File Number 0-16014)
10.24 Credit Agreement, dated as of April 12, 1996, among Chelsea
Communications, Inc., Kittanning Cablevision Inc., Robinson/Plum
Cablevision L.P., the several banks and financial institutions
parties thereto, and Toronto Dominion (Texas), Inc. as
Administrative Agent (Incorporated herein by reference is Exhibit
10.36 to Registrant's Current Report on Form 8-K dated June 3,
1996.) (File Number 0-16014)
10.25 Amended Credit Agreement, dated as of March 29, 1996, among
Highland Video Associates L.P., Telesat Acquisition Limited
Partnership, Global Acquisition Partners, L.P., the various
financial institutions as parties thereto, Bank of Montreal as
syndication agent, Chemical Bank as documentation agent, and the
Bank of Nova Scotia as administrative agent (Incorporated herein
by reference is Exhibit 10.37 to Registrant's Current Report on
Form 8-K dated June 19, 1996.) (File Number 0-16014)
10.26 Purchase Agreement dated as of April 10, 1996, between Hyperion
Telecommunications, Inc. and Bear Stearns & Co. Inc., Chase
Securities Inc. and NationsBanc Capital Markets, Inc.
(Incorporated by reference is Exhibit 1.1 to Registration
Statement No. 333-06957 on Form S-4 filed for Hyperion
Telecommunications, Inc.)
10.27 Purchase Agreement dated as of February 21, 1997 between the
Registrant and Smith Barney Inc. (Incorporated herein by reference
is Exhibit 10.02 to Adelphia Communications Corporation's Current
Report on Form 8-K dated May 1, 1997). (File Number 0-16014)
10.28 Registration Rights Agreement dated as of April 15, 1996, between
Hyperion Telecommunications, Inc. and the Initial Purchasers
(Incorporated by reference is Exhibit 4.3 to Registration
Statement No. 333-06957 on Form S-4 filed for Hyperion
Telecommunications, Inc.)
10.29 Warrant Agreement dated as of April 15, 1996, by and among
Hyperion Telecommunications, Inc. and Bank of Montreal Trust
Company (Incorporated by reference is Exhibit 10.13 to
Registration Statement No. 333-06957 on Form S-4 filed for
Hyperion Telecommunications, Inc.)
10.30 Warrant Registration Rights Agreement dated as of April 15, 1996,
by and among Hyperion Telecommunications, Inc. and the Initial
Purchasers (Incorporated by reference is Exhibit 10.14 to
Registration Statement No. 333-06957 on Form S-4 filed for
Hyperion Telecommunications, Inc.)
10.31 Hyperion Telecommunications, Inc.'s Long-Term Incentive
Compensation Plan (Incorporated herein by reference is Exhibit
10.17 to Hyperion Telecommunications, Inc.'s Registration
Statement No. 333-13663 on Form S-1.)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.32 Purchase Agreement, dated as of November 6, 1996, between Olympus
Communications, L.P., Olympus Capital Corporation and Goldman,
Sachs & Co. (Incorporated herein by reference is Exhibit 10.01 to
Registrant's Current Report on Form 8-K dated December 16, 1996.)
(File Number 0-16014)
10.33 Registration Rights Agreement among Charles R. Drenning, Paul D.
Fajerski, Randolph S. Fowler, Adelphia Communications Corporation
and Hyperion (Incorporated herein by reference is Exhibit 10.18 to
Hyperion Telecommunications, Inc.'s Registration Statement No.
333-13663 on Form S-1.)
10.34 Registration Rights Agreement between Adelphia Communications
Corporation and Hyperion (Incorporated herein by reference is
Exhibit 10.19 to Hyperion Telecommunications, Inc.'s Registration
Statement No. 333-13663 on Form S-1.)
10.35 First Amendment to the Olympus Communications, L.P. Second Amended
and Restated Limited Partnership Agreement, dated September 1,
1995 (Incorporated herein by reference is Exhibit 10.33 to the
Registrant's Annual Report on Form 10-K/A for the fiscal year
ended March 31, 1996.) (File Number 0-16014)
10.36 First Amendment to the Olympus Communications, L.P. Second Amended
and Restated Limited Partnership Agreement, dated March 29, 1996
(Incorporated herein by reference is Exhibit 10.34 to the
Registrant's Annual Report on Form 10-K/A for the fiscal year
ended March 31, 1996.) (File Number 0-16014)
10.37 Second Amendment to the Olympus Communications, L.P. Second
Amended and Restated Limited Partnership Agreement, dated June 27,
1996 (Incorporated herein by reference is Exhibit 10.35 to the
Registrant's Annual Report on Form 10-K/A for the fiscal year
ended March 31, 1996.) (File Number 0-16014)
10.38 Employment Agreement between Hyperion Telecommunications, Inc. and
Daniel R. Milliard dated as of March 4, 1997. (Incorporated herein
by reference is Exhibit 10.03 to Adelphia Communications
Corporation's Current Report on Form 8-K dated May 1, 1997) (File
Number
0-16014)
10.39 Extension Agreement dated as of January 8, 1997, among Hyperion
Telecommunications, Inc., Adelphia Communications Corporation,
Charles R. Drenning, Paul D. Fajerski, Randolph S. Fowler, and six
Trusts named therein (Incorporated herein by reference is Exhibit
10.04 to Adelphia Communications Corporation's Current Report on
Form 8-K dated May 1, 1997.) (File Number 0-16014)
10.40 Purchase Agreement among Adelphia Communications Corporation,
Smith Barney Inc., Bear Stearns & Co. Inc., NationsBanc Capital
Markets, Inc. and TD Securities (USA) Inc. (the "Initial
Purchasers") dated July 1, 1997. (Incorporated herein by reference
is Exhibit 10.01 from the Registrant's Current Report on Form 8-K
dated July 24, 1997) (File Number 0-16014)
10.41 Registration Rights Agreement among Adelphia Communications
Corporation, the Initial Purchasers and Highland Holdings, dated
July 7, 1997, regarding the 13% Cumulative Exchangeable Preferred
Stock. (Incorporated herein by reference is Exhibit 10.02 from the
Registrant's Current Report on Form 8-K dated July 24, 1997) (File
Number 0-16014)
10.42 Registration Rights Agreement among Adelphia Communications
Corporation and the Initial Purchasers, dated July 7, 1997,
regarding the 10 1/2% Senior Notes due 2004. (Incorporated herein
by reference is Exhibit 10.03 from the Registrant's Current Report
on Form 8-K dated July 24, 1997) (File Number 0-16014)
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.43 Registration Rights Agreement among Adelphia Communications
Corporation, Highland Holdings and Telesat Cablevision, Inc.,
dated July 7, 1997. (Incorporated herein by reference is Exhibit
10.04 from the Registrant's Current Report on Form 8-K dated July
24, 1997) (File Number 0-16014)
10.44 Purchase Agreement between Adelphia Communications Corporation and
Highland Holdings, dated July 1, 1997. (Incorporated herein by
reference is Exhibit 10.05 from the Registrant's Current Report on
Form 8-K dated July 24, 1997) (File Number 0-16014)
10.45 Series C Preferred Stock Purchase Agreement among Adelphia
Communications Corporation, Highland Holdings and Telesat
Cablevision, Inc., dated June 22, 1997 (Incorporated herein by
reference is Exhibit 10.06 from the Registrant's Current Report on
Form 8-K dated July 24, 1997) (File Number 0-16014)
10.46 Pledge Agreement between Hyperion and the Bank of Montreal Trust
Company as Collateral Agent, dated as of August 27, 1997.
(Incorporated by reference herein is Exhibit 4.03 to Hyperion's
Current Report on Form 8-K dated August 27, 1997) (File No. 0-
21065).
10.47 Registration Rights Agreement between Hyperion and the Initial
Purchasers, dated August 27, 1997, regarding the 12 1/4% Senior
Secured Notes due 2004 (Incorporated herein by reference to
Exhibit 4.04 to Hyperion's Current Report on Form 8-K dated August
27, 1997) (File No. 0-21605).
10.48 Pledge, Escrow and Disbursement Agreement, between Hyperion and
the Bank of Montreal Trust Company dated as of August 27, 1997.
(Incorporated by reference herein to Exhibit 4.05 to Hyperion's
Current Report on Form 8-K dated August 27, 1997) (File No. 0-
21605).
10.49 Purchase Agreement among Hyperion, Bear Stearns & Co. Inc., Chase
Securities Inc., TD Securities (USA) Inc., CIBC Wood Gundy
Securities Corp., and Scotia Capital Markets (the "Initial
Purchasers") dated August 21, 1997. (Incorporated herein by
reference to Exhibit 10.01 to Hyperion's Current Report on Form 8-
K dated August 27, 1997) (File No. 0-21605).
10.50 Purchase Agreement among Adelphia Communications Corporation and
Smith Barney Inc. (the "Initial Purchaser") dated September 22,
1997 (Incorporated herein by reference is Exhibit 10.01 from the
Registrant's Current Report on Form 8-K, dated September 25, 1997)
(File Number
0-16014).
12.01* Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
21.01 Subsidiaries of the Registrant (Incorporated herein by reference
is Exhibit 21.01 to Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997.) (File Number 0-16014)
23.01* Consent of Buchanan Ingersoll Professional Corporation (contained
in its opinion filed as Exhibit 5.01 hereto)
23.02* Consent of Deloitte & Touche LLP
24.01* Power of Attorney (appearing on signature page)
25.01* Form T-1 Statement of Eligibility of Trustee
99.01* Form of Letter of Transmittal and Notice of Guaranteed Delivery
for Notes
</TABLE>
- --------
*Filed herewith.
II-7
<PAGE>
(b) Financial Statement Schedules
The following schedules are included in the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997 contained herein by
reference.
Schedule I--Condensed Financial Information of the Registrant
Schedule II--Valuation and Qualifying Accounts
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants 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 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 such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
The 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 the Form S-4, 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 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.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the registrant undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of a Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed part of the Registration Statement as of the time it was
declared effective.
II-8
<PAGE>
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at such
time shall be deemed to be the initial bona fide offering thereof.
(3) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) ((S)230.424(b) of this chapter), if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (3)(i) and (3)(ii) above do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(4) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(6) 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 Section 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.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport,
Commonwealth of Pennsylvania, on the 27th day of October, 1997.
ADELPHIA COMMUNICATIONS CORPORATION
By:/s/ Timothy J. Rigas
----------------------------------
Timothy J. Rigas
Executive Vice President, Chief
Accounting
Officer, Chief Financial Officer
and Treasurer
POWER OF ATTORNEY
Know All Men By These Presents that each person whose signature appears
below constitutes and appoints Michael J. Rigas, Timothy J. Rigas, James P.
Rigas and Daniel R. Milliard, and each of them, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and revocation,
for such person and in such person's name, place and stead, in any and all
amendments (including post-effective amendments to this Registration
Statement) and to 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, and each of them, 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 such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated.
SIGNATURE TITLE DATE
/s/ John Rigas Chairman, President and October 27,
- ----------------------------- Chief Executive Officer 1997
John Rigas
/s/ Michael J. Rigas Executive Vice President and October 27,
- ----------------------------- Director 1997
Michael J. Rigas
/s/ Timothy J. Rigas Executive Vice President, October 27,
- ----------------------------- Chief Accounting Officer, 1997
Timothy J. Rigas Treasurer, Chief Financial
Officer and Director
II-10
<PAGE>
SIGNATURE TITLE DATE
/s/ James P. Rigas Executive Vice President and October 27,
- ----------------------------- Director 1997
James P. Rigas
/s/ Daniel R. Milliard Senior Vice President, October 27,
- ----------------------------- Secretary and Director 1997
Daniel R. Milliard
/s/ Dennis P. Coyle Director October 27,
- ----------------------------- 1997
Dennis P. Coyle
/s/ Pete J. Metros Director October 27,
- ----------------------------- 1997
Pete J. Metros
Director
- -----------------------------
Perry S. Patterson
II-11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
3.01 Certificate of Incorporation of Adelphia Communications
Corporation (Incorporated herein by reference is Exhibit
3.01 to the Registrant's Current Report on Form 8-K dated
July 24, 1997.) (File Number 0-16014)
3.02 Bylaws of Adelphia Communications Corporation (Incorporated
herein by reference is Exhibit 3.02 to Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31,
1994.) (File Number 0-16014)
4.01 Indenture, dated as of February 26, 1997, between the
Registrant and Bank of Montreal Trust Company with respect
to the Registrant's 9 7/8% Senior Notes Due 2007
(Incorporated herein by reference is Exhibit 4.01 to
Registrant's Current Report on Form 8-K dated May 1, 1997.)
(File Number 0-16014)
4.02 Form of Note with respect to the Registrant's 9 7/8% Senior
Notes Due 2007 (contained in Indenture filed as Exhibit
4.01.)
4.03 Registration Rights Agreement, dated as of February 26,
1997, between the Registrant and the Initial Purchaser with
respect to the Registrant's 9 7/8% Senior Notes Due 2007
(Incorporated herein by reference is Exhibit 10.01 to
Registrant's Current Report on Form 8-K dated May 1, 1997.)
(File Number 0-16014)
4.04 First Supplemental Indenture, dated as of May 4, 1994, with
respect to Registrant's 9 1/2% Senior Pay-In-Kind Notes Due
2004 (Incorporated herein by reference is Exhibit 4.01 to
Registrant's Current Report on Form 8-K dated May 5, 1994.)
(File Number 0-16014)
4.05 Indenture, dated as of February 22, 1994, with respect to
Registrant's 9 1/2% Senior Pay-In-Kind Notes Due 2004
(Incorporated herein by reference is Exhibit 4.05 to
Registration Statement No. 33-52513 on Form S-4.)
4.06 Indenture, dated as of July 28, 1993, with respect to
Registrant's 10 1/4% Senior Notes Due 2000 (Incorporated
herein by reference is Exhibit 4.01 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1993.) (File Number 0-16014)
4.07 Amended and Restated Indenture, dated as of May 11, 1993,
with respect to Registrant's 9 7/8% Senior Debentures Due
2005 (Incorporated herein by reference is Exhibit 4.01 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1993.) (File Number 0-16014)
4.08 Indenture, dated as of September 2, 1992, with respect to
the Registrant's 11 7/8% Senior Debentures Due 2004
(Incorporated herein by reference is Exhibit 4.03 to
Registration Statement No. 33-52630 on Form S-1.)
4.09 Indenture, dated as of May 7, 1992, with respect to the
Registrant's 12 1/2% Senior Notes Due 2002 (Incorporated
herein by reference is Exhibit 4.03 to Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31,
1992.) (File Number 0-16014)
4.10 Indenture, dated as of April 15, 1996, between Hyperion
Telecommunications, Inc. and Bank of Montreal Trust Company
(Incorporated by reference is Exhibit 4.1 to Registration
Statement No. 333-06957 on Form S-4 filed for Hyperion
Telecommunications, Inc.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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4.11 Form of 13% Hyperion Telecommunications, Inc. Senior
Discount Notes (Incorporated herein by reference is Exhibit
4.3 to Hyperion Telecommunications, Inc.'s Registration
Statement No. 333- 12619 on Form S-1.)
4.12 First Supplemental Indenture, dated as of September 11,
1996, between Hyperion Telecommunications, Inc. and Bank of
Montreal Trust Company (Incorporated herein by reference is
Exhibit 4.2 of Hyperion Telecommunications, Inc.'s
Registration Statement No. 333-12619 on Form S-1.)
4.13 Indenture, dated as of November 12, 1996, between Olympus
Communications, L.P., Olympus Capital Corporation and Bank
of Montreal Trust Company (Incorporated herein by reference
is Exhibit 10.02 to Registrant's Current Report on Form 8-K
dated December 16, 1996.) (File Number 0-16014)
4.14 Certificate of Designations for 13% Series A and Series B
Cumulative Exchangeable Preferred Stock (Contained in
Exhibit 3.01 to Registrant's Current Report on Form 8-K
dated July 24, 1997, which is incorporated herein by
reference.) (File Number 0-16014)
4.15 Certificate of Designations for Series C Convertible
Preferred Stock (Contained in Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated July 24, 1997, which is
incorporated herein by reference.) (File Number 0-16014)
4.16 Indenture, dated as of July 7, 1997, with respect to the
Registrant's 10 1/2% Senior Notes due 2004, between the
Registrant and the Bank of Montreal Trust Company
(Incorporated herein by reference is Exhibit 4.03 from the
Registrant's Current Report on Form 8-K dated July 24,
1997.) (File Number 0-16014)
4.17 Form of 10 1/2% Senior Note due 2004 (Contained in Exhibit
4.03 to Registrant's Current Report on Form 8-K dated July
24, 1997 which is incorporated herein by reference.) (File
Number 0-16014)
4.18 Form of Indenture, with respect to the Registrant's 13%
Senior Subordinated Exchange Debentures due 2009, between
the Registrant and the Bank of Montreal Trust Company
(Contained in Exhibit 3.01 as Annex A to Registrant's
Current Report on Form 8-K dated July 24, 1997, which is
incorporated herein by reference.) (File Number 0-16014)
4.19 Form of Certificate for 13% Cumulative Exchangeable
Preferred Stock (Incorporated herein by reference is
Exhibit 4.06 from the Registrant's Current Report on Form
8-K dated July 24, 1997.) (File Number 0-16014)
4.20 Form of Certificate for Series C Convertible Preferred
Stock (Incorporated herein by reference is Exhibit 4.06
from the Registrant's Current Report on Form 8-K dated July
24, 1997.) (File Number 0-16014)
4.21 Indenture, dated as of August 27, 1997, with respect to
Hyperion Telecommunications, Inc. ("Hyperion") 12 1/4%
Senior Secured Notes due 2004, between Hyperion and the
Bank of Montreal Trust Company (Incorporated herein by
reference to Exhibit 4.01 to Hyperion's Current Report on
Form 8-K dated August 27, 1997.) (File No. 0-21605)
4.22 Form of 12 1/4% Senior Secured Note due 2004 (contained in
Exhibit 4.21).
4.23 Second Supplemental Indenture, dated as of August 27, 1997,
between Hyperion and the Bank of Montreal Trust Company,
regarding Hyperion's 13% Senior Discount Notes due 2003
(Incorporated by reference herein to Exhibit 4.06 to
Hyperion's Current Report on Form 8-K dated August 27,
1997.) (File No. 0-21605)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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4.25 Indenture, dated as of September 25, 1997, with respect to
the Registrant's 9 1/4% Senior Notes due 2002, between the
Registrant and the Bank of Montreal Trust Company
(Incorporated herein by reference is Exhibit 4.01 from the
Registrant's Current Report on Form 8-K, dated September
25, 1997.) (File Number 0-16014)
4.26 Registration Rights Agreement between Adelphia
Communications Corporation and the Initial Purchaser, dated
September 25, 1997, regarding the Registrant's 9 1/4%
Senior Notes due 2002 (Incorporated herein by reference is
Exhibit 4.02 from the Registrant's Current Report on Form
8-K, dated September 25, 1997.) (File Number 0-16014)
4.27 Form of 9 1/4% Senior Note due 2002 (contained in Exhibit
4.25)
5.01* Opinion of Buchanan Ingersoll Professional Corporation
10.01 Class B Common Stockholders Agreement (Incorporated herein
by reference is Exhibit 10.01 to Registration Statement No.
33-6974 on Form S-1.)
10.02 Joinder to Class B Common Stockholders Agreement
(Incorporated herein by reference is Exhibit 10.02 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1994.) (File Number 0-16014)
10.03 Registration Rights Agreement and Amendment to Registration
Rights Agreement (Incorporated herein by reference are
Exhibit 10.02 to Registration Statement No. 33-6974 on Form
S-1 and Exhibit 10.35 to Registration Statement No. 33-
25121 on Form S-1.)
10.04 Form of Management Agreement for Managed Companies
(Incorporated herein by reference is Exhibit 10.04 to the
Registrant's Annual Report on Form 10-K for fiscal year
ended March 31, 1996.) (File Number 0-16014)
10.05 Management Agreement--Montgomery Cablevision Associates,
L.P. (Incorporated herein by reference is Exhibit 10.08 to
Registration Statement No. 33-6974 on Form S-1.)
10.06 Management Agreement--Adelphia Cablevision Associates of
Radnor, L.P. (Incorporated herein by reference is Exhibit
10.09 to Registration Statement No. 33-6974 on Form S-1.)
10.07 Stock Option Plan of 1986, as amended (Incorporated herein
by reference is Exhibit 10.07 to Registration Statement No.
33-46551 on Form S-1.)
10.08 Restricted Stock Bonus Plan, as amended (Incorporated
herein by reference is Exhibit 10.08 to Registration
Statement No. 33-46551 on Form S-1.)
10.09 Business Opportunity Agreement (Incorporated herein by
reference is Exhibit 10.13 to Registration Statement No.
33-3674 on Form S-1.)
10.10 Employment Agreement between the Company and John J. Rigas
(Incorporated herein by reference is Exhibit 10.14 to
Registration Statement No. 33-6974 on Form S-1.)
10.11 Employment Agreement between the Company and Daniel R.
Milliard (Incorporated herein by reference is Exhibit 10.15
to Registration Statement No. 33-6974 on Form S-1.)
10.12 Employment Agreement between the Company and Timothy J.
Rigas (Incorporated herein by reference is Exhibit 10.16 to
Registration Statement No. 33-6974 on Form S-1.)
10.13 Employment Agreement between the Company and Michael J.
Rigas (Incorporated herein by reference is Exhibit 10.17 to
Registration Statement No. 33-6974 on Form S-1.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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10.14 Employment Agreement between the Company and James P. Rigas
(Incorporated herein by reference is Exhibit 10.18 to
Registration Statement No. 33-6974 on Form S-1.)
10.15 Agreement Regarding Management Fees relating to the
subsidiaries of Chauncey Communications Corporation
(Incorporated herein by reference is Exhibit 10.16 of
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1991.) (File Number 0-16014)
10.16 Form of Note Agreement, dated as of August 1, 1990,
relating to the 10.66% Senior Secured Notes due August 1,
1998, of Chauncey Communications Corporation (Incorporated
herein by reference is Exhibit 10.01 of Registrant's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1990.) (File Number 0-16014)
10.17 Amendatory Agreement regarding Chauncey Communications
Corporation 10.66% Senior Secured Note Agreement, dated as
of August 6, 1991 (Incorporated herein by reference is
Exhibit 10.02 of Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991.) (File Number 0-
16014)
10.18 $50,000 Term Note and Pledge Agreement between Adelphia
Communications Corporation as lender and Daniel R.
Milliard, dated October 1, 1988 (Incorporated herein by
reference is Exhibit 10.03 of Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1991.)
(File Number 0-16014)
10.19 $205,000 Revolving Term Note and Pledge Agreement among
Adelphia Communications Corporation as lender, Daniel R.
Milliard and David Acker (Incorporated herein by reference
is Exhibit 10.04 of Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1991.) (File
Number 0-16014)
10.20 Olympus Communications, L.P. Second Amended and Restated
Limited Partnership Agreement, dated as of February 28,
1995 (Incorporated herein by reference is Exhibit 10.32 of
the Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995.) (File Number 0-16014)
10.21 Credit, Security and Guaranty Agreement among UCA Corp. and
certain of its Affiliates and First Union National Bank of
North Carolina as Administrative Agent, dated as of March
15, 1995 (Incorporated herein by reference is Exhibit 10.32
of the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995.) (File Number 0-16014)
10.22 Revolving Credit Facility among Adelphia Cable Partners,
L.P., Southwest Florida Cable, Inc., West Boca Acquisition
Limited Partnership and Toronto-Dominion (Texas), Inc., as
Administrative Agent, dated May 12, 1995 (Incorporated
herein by reference is Exhibit 10.03 to Registrant's
Current Report on Form 8-K dated June 30, 1995.) (File
Number 0-16014)
10.23 Credit Agreement, dated as of October 27, 1995, among Plato
Communications, Inc. Northeast Cable, Inc., Robinson/Plum
Cablevision L.P., the several other banks and other
financial institutions from time to time parties to this
agreement and Chemical Bank, as Administrative Agent
(Incorporated herein by reference is Exhibit 10.35 to
Registrant's Current Report on Form 8-K dated December 7,
1995.) (File Number 0-16014)
10.24 Credit Agreement, dated as of April 12, 1996, among Chelsea
Communications, Inc., Kittanning Cablevision Inc.,
Robinson/Plum Cablevision L.P., the several banks and
financial institutions parties thereto, and Toronto
Dominion (Texas), Inc. as Administrative Agent
(Incorporated herein by reference is Exhibit 10.36 to
Registrant's Current Report on Form 8-K dated June 3,
1996.) (File Number 0-16014)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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10.25 Amended Credit Agreement, dated as of March 29, 1996, among
Highland Video Associates L.P., Telesat Acquisition Limited
Partnership, Global Acquisition Partners, L.P., the various
financial institutions as parties thereto, Bank of Montreal
as syndication agent, Chemical Bank as documentation agent,
and the Bank of Nova Scotia as administrative agent
(Incorporated herein by reference is Exhibit 10.37 to
Registrant's Current Report on Form 8-K dated June 19,
1996.) (File Number 0-16014)
10.26 Purchase Agreement dated as of April 10, 1996, between
Hyperion Telecommunications, Inc. and Bear Stearns & Co.
Inc., Chase Securities Inc. and NationsBanc Capital
Markets, Inc. (Incorporated by reference is Exhibit 1.1 to
Registration Statement No. 333-06957 on Form S-4 filed for
Hyperion Telecommunications, Inc.)
10.27 Purchase Agreement dated as of February 21, 1997 between
the Registrant and Smith Barney Inc. (Incorporated herein
by reference is Exhibit 10.02 to Adelphia Communications
Corporation's Current Report on Form 8-K dated May 1,
1997). (File Number 0-16014)
10.28 Registration Rights Agreement dated as of April 15, 1996,
between Hyperion Telecommunications, Inc. and the Initial
Purchasers (Incorporated by reference is Exhibit 4.3 to
Registration Statement No. 333-06957 on Form S-4 filed for
Hyperion Telecommunications, Inc.)
10.29 Warrant Agreement dated as of April 15, 1996, by and among
Hyperion Telecommunications, Inc. and Bank of Montreal
Trust Company (Incorporated by reference is Exhibit 10.13
to Registration Statement No. 333-06957 on Form S-4 filed
for Hyperion Telecommunications, Inc.)
10.30 Warrant Registration Rights Agreement dated as of April 15,
1996, by and among Hyperion Telecommunications, Inc. and
the Initial Purchasers (Incorporated by reference is
Exhibit 10.14 to Registration Statement No. 333-06957 on
Form S-4 filed for Hyperion Telecommunications, Inc.)
10.31 Hyperion Telecommunications, Inc.'s Long-Term Incentive
Compensation Plan (Incorporated herein by reference is
Exhibit 10.17 to Hyperion Telecommunications, Inc.'s
Registration Statement No. 333-13663 on Form S-1.)
10.32 Purchase Agreement, dated as of November 6, 1996, between
Olympus Communications, L.P., Olympus Capital Corporation
and Goldman, Sachs & Co. (Incorporated herein by reference
is Exhibit 10.01 to Registrant's Current Report on Form 8-K
dated December 16, 1996.) (File Number 0-16014)
10.33 Registration Rights Agreement among Charles R. Drenning,
Paul D. Fajerski, Randolph S. Fowler, Adelphia
Communications Corporation and Hyperion (Incorporated
herein by reference is Exhibit 10.18 to Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-
13663 on Form S-1.)
10.34 Registration Rights Agreement between Adelphia
Communications Corporation and Hyperion (Incorporated
herein by reference is Exhibit 10.19 to Hyperion
Telecommunications, Inc.'s Registration Statement No. 333-
13663 on Form S-1.)
10.35 First Amendment to the Olympus Communications, L.P. Second
Amended and Restated Limited Partnership Agreement, dated
September 1, 1995 (Incorporated herein by reference is
Exhibit 10.33 to the Registrant's Annual Report on Form 10-
K/A for the fiscal year ended March 31, 1996.) (File Number
0-16014)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
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10.36 First Amendment to the Olympus Communications, L.P. Second
Amended and Restated Limited Partnership Agreement, dated
March 29, 1996 (Incorporated herein by reference is Exhibit
10.34 to the Registrant's Annual Report on Form 10-K/A for
the fiscal year ended March 31, 1996.) (File Number 0-
16014)
10.37 Second Amendment to the Olympus Communications, L.P. Second
Amended and Restated Limited Partnership Agreement, dated
June 27, 1996 (Incorporated herein by reference is Exhibit
10.35 to the Registrant's Annual Report on Form 10-K/A for
the fiscal year ended March 31, 1996.) (File Number 0-
16014)
10.38 Employment Agreement between Hyperion Telecommunications,
Inc. and Daniel R. Milliard dated as of March 4, 1997.
(Incorporated herein by reference is Exhibit 10.03 to
Adelphia Communications Corporation's Current Report on
Form 8-K dated May 1, 1997) (File Number
0-16014)
10.39 Extension Agreement dated as of January 8, 1997, among
Hyperion Telecommunications, Inc., Adelphia Communications
Corporation, Charles R. Drenning, Paul D. Fajerski,
Randolph S. Fowler, and six Trusts named therein
(Incorporated herein by reference is Exhibit 10.04 to
Adelphia Communications Corporation's Current Report on
Form 8-K dated May 1, 1997.) (File Number 0-16014)
10.40 Purchase Agreement among Adelphia Communications
Corporation, Smith Barney Inc., Bear Stearns & Co. Inc.,
NationsBanc Capital Markets, Inc. and TD Securities (USA)
Inc. (the "Initial Purchasers") dated July 1, 1997.
(Incorporated herein by reference is Exhibit 10.01 from the
Registrant's Current Report on Form 8-K dated July 24,
1997) (File Number 0-16014)
10.41 Registration Rights Agreement among Adelphia Communications
Corporation, the Initial Purchasers and Highland Holdings,
dated July 7, 1997, regarding the 13% Cumulative
Exchangeable Preferred Stock. (Incorporated herein by
reference is Exhibit 10.02 from the Registrant's Current
Report on Form 8-K dated July 24, 1997) (File Number 0-
16014)
10.42 Registration Rights Agreement among Adelphia Communications
Corporation and the Initial Purchasers, dated July 7, 1997,
regarding the 10 1/2% Senior Notes due 2004. (Incorporated
herein by reference is Exhibit 10.03 from the Registrant's
Current Report on Form 8-K dated July 24, 1997) (File
Number 0-16014)
10.43 Registration Rights Agreement among Adelphia Communications
Corporation, Highland Holdings and Telesat Cablevision,
Inc., dated July 7, 1997. (Incorporated herein by reference
is Exhibit 10.04 from the Registrant's Current Report on
Form 8-K dated July 24, 1997) (File Number 0-16014)
10.44 Purchase Agreement between Adelphia Communications
Corporation and Highland Holdings, dated July 1, 1997.
(Incorporated herein by reference is Exhibit 10.05 from the
Registrant's Current Report on Form 8-K dated July 24,
1997) (File Number 0-16014)
10.45 Series C Preferred Stock Purchase Agreement among Adelphia
Communications Corporation, Highland Holdings and Telesat
Cablevision, Inc., dated June 22, 1997 (Incorporated herein
by reference is Exhibit 10.06 from the Registrant's Current
Report on Form 8-K dated July 24, 1997) (File Number 0-
16014)
10.46 Pledge Agreement between Hyperion and the Bank of Montreal
Trust Company as Collateral Agent, dated as of August 27,
1997. (Incorporated by reference herein is Exhibit 4.03 to
Hyperion's Current Report on Form 8-K dated August 27,
1997) (File No. 0-21065).
10.47 Registration Rights Agreement between Hyperion and the
Initial Purchasers, dated August 27, 1997, regarding the 12
1/4% Senior Secured Notes due 2004 (Incorporated herein by
reference to Exhibit 4.04 to Hyperion's Current Report on
Form 8-K dated August 27, 1997) (File No. 0-21605).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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10.48 Pledge, Escrow and Disbursement Agreement, between Hyperion
and the Bank of Montreal Trust Company dated as of August
27, 1997. (Incorporated by reference herein to Exhibit 4.05
to Hyperion's Current Report on Form 8-K dated August 27,
1997) (File No. 0-21605).
10.49 Purchase Agreement among Hyperion, Bear Stearns & Co. Inc.,
Chase Securities Inc., TD Securities (USA) Inc., CIBC Wood
Gundy Securities Corp., and Scotia Capital Markets (the
"Initial Purchasers") dated August 21, 1997. (Incorporated
herein by reference to Exhibit 10.01 to Hyperion's Current
Report on Form 8-K dated August 27, 1997) (File No. 0-
21605).
10.50 Purchase Agreement among Adelphia Communications
Corporation and Smith Barney Inc. (the "Initial Purchaser")
dated September 22, 1997 (Incorporated herein by reference
is Exhibit 10.01 from the Registrant's Current Report on
Form 8-K, dated September 25, 1997) (File Number 0-16014).
12.01* Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
21.01 Subsidiaries of the Registrant (Incorporated herein by
reference is Exhibit 21.01 to Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997.) (File
Number 0-16014)
23.01* Consent of Buchanan Ingersoll Professional Corporation
(contained in its opinion filed as Exhibit 5.01 hereto)
23.02* Consent of Deloitte & Touche LLP
24.01* Power of Attorney (appearing on signature page)
25.01* Form T-1 Statement of Eligibility of Trustee
99.01* Form of Letter of Transmittal and Notice of Guaranteed
Delivery for Notes
</TABLE>
- --------
*Filed herewith.
<PAGE>
EXHIBIT 5.01
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
Attorneys
One Oxford Centre
301 Grant Street, 20th Floor
Pittsburgh, PA 15219-1410
Telephone: 412-562-8800
Fax: 412-562-1041
October 28, 1997
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
Dear Sirs:
We have acted as counsel to Adelphia Communications Corporation, a Delaware
corporation ("Adelphia", the "Company" or the "Registrant"), in connection
with the proposed exchange (the "Exchange") by the Company of 9 1/4% Series B
Senior Notes Due 2002 ("New Notes") for an equal principal amount of its
outstanding 9 1/4% Senior Notes Due 2002 ("Old Notes").
In connection with the proposed Exchange, we have examined the Company's
Certificate of Incorporation and Bylaws, as presently in effect, the Company's
relevant corporate proceedings, the draft Registration Statement on Form S-4
covering the proposed Exchange (the "Registration Statement"), including the
Prospectus filed as a part of the Registration Statement, the Indenture dated
September 25, 1997, in respect of the Old Notes and the New Notes (the
"Indenture"), and such other documents, records, certificates of public
officials, statutes and decisions as we considered necessary to express the
opinions contained herein. In the examination of such documents, we have
assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to the original
documents of all documents submitted to us as certified or photostatic copies.
We understand that the New Notes are to be issued to the holders of the Old
Notes in the Exchange and are to be available for resale by such holders, all
in the manner described in the Prospectus, which is a part of the Registration
Statement, and in the Indenture.
Based on the foregoing, we are of the opinion that:
1. The issuance of the New Notes to the holders of the Old Notes pursuant
to the terms of the Exchange and the Indenture have been duly authorized
by proper corporate action of the Registrant.
2. When the Registration Statement shall have been declared effective by
order of the Securities and Exchange Commission and the New Notes have
been duly issued to and exchanged for the Old Notes, all in accordance
with the terms of the Exchange, the Indenture and the Registration
Statement, such New Notes will be validly issued and will constitute
binding obligations of the Registrant, subject, as to enforcement (i) to
any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights and remedies generally and (ii) to general principles
of judicial discretion and equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity or in a
bankruptcy proceeding and except that (i) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy and (ii)
waivers as to usury, stay or extension laws may be unenforceable).
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to any reference to us in the Prospectus which is a
part hereof.
Sincerely,
BUCHANAN INGERSOLL PROFESSIONAL
CORPORATION
By: /s/ Carl E. Rothenberger, Jr.
-----------------------------
Carl E. Rothenberger, Jr.
<PAGE>
EXHIBIT 12.01
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
YEAR ENDED MARCH 31, PRO FORMA THREE THREE
--------------------------------------------------- YEAR MONTHS MONTHS
ENDED ENDED ENDED
MARCH 31, JUNE 30, JUNE 30,
1993 1994 1995 1996 1997 1997 1997 1997
-------- -------- --------- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loss before Income
Taxes,
Extraordinary Loss and
Cumulative Effect of
Change in Accounting
Principle............ $(99,766) $(94,706) $(111,759) $(122,680) $(119,290) $(150,051) $(44,731) $(52,071)
Add: Fixed Charges,
Excluding Capitalized
interest............. 170,376 187,439 200,927 217,170 249,113 252,874 66,936 67,876
Equity in loss of
joint ventures....... 46,841 30,054 44,349 46,257 59,169 59,169 21,738 21,738
Preferred stock
dividends
of Subsidiary........ -- -- -- -- -- 27,000 -- 6,400
-------- -------- --------- --------- --------- --------- -------- --------
Net Earnings Available
for Combined Fixed
Charges and Preferred
Stock Dividends........ 117,451 122,787 133,517 140,747 188,992 188,992 43,943 43,943
-------- -------- --------- --------- --------- --------- -------- --------
Combined Fixed Charges
and Preferred stock
dividends:
Interest.............. 164,859 182,136 195,698 210,691 240,692 244,453 63,888 64,828
Capitalized interest.. 1,009 1,345 1,736 1,766 1,727 1,727 347 347
Amortization of debt
issuance costs....... 4,155 3,987 3,792 4,917 6,344 6,344 2,470 2,470
Interest portion of
rent expense......... 1,362 1,316 1,437 1,562 2,077 2,077 578 578
Preferred stock
dividends
of subsidiary........ -- -- -- -- -- 27,000 -- 6,400
Preferred stock
dividends............ -- -- -- -- -- 27,624 -- 6,906
-------- -------- --------- --------- --------- --------- -------- --------
Total Combined Fixed
Charges and Preferred
Stock Dividends........ 171,385 188,784 202,663 218,936 250,840 309,225 67,283 81,529
-------- -------- --------- --------- --------- --------- -------- --------
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends.............. -- -- -- -- -- -- -- --
Deficiency in Earnings
Required to Cover
Combined Fixed Charges
and Preferred Stock
Dividends.............. $ 53,934 $ 65,997 $ 69,146 $ 78,189 $ 61,848 $ 120,233 $ 23,340 $ 37,586
======== ======== ========= ========= ========= ========= ======== ========
</TABLE>
<PAGE>
EXHIBIT 23.02
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Adelphia Communications Corporation on Form S-4 of our report dated June 11,
1997 and our report dated March 26, 1997 on our audits of the financial
statements of Adelphia Communications Corporation and subsidiaries and of
Olympus Communications, L.P. and subsidiaries, respectively, appearing in and
incorporated by reference in the Annual Report on Form 10-K of Adelphia
Communications Corporation for the year ended March 31, 1997, and to the
reference to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
Deloitte & Touche LLP
Pittsburgh, Pennsylvania
October 27, 1997
<PAGE>
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM T-1
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)___
BANK OF MONTREAL TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-4941093
(State of incorporation or organization (I.R.S. employer
if not a U.S. national bank) identification no.)
Wall Street Plaza
88 Pine Street, 19th Floor
New York, New York 10005
(Address of trustee's principal executive offices) (Zip code)
Mark F. McLaughlin
Bank of Montreal Trust Company
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005
(212) 701-7602
(Name, address and telephone number of agent for service)
____________________________________
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 23-2417713
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Main at Water Street
Coudersport, Pennsylvania 16915
(Address of principal executive offices)
______________________________________
9 1/4% Senior Notes, Due 2002
(Title of Indenture Securities)
================================================================================
<PAGE>
- 2 -
Item 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.
Federal Reserve Bank of New York
33 Liberty Street, New York N.Y. 10045
State of New York Banking Department
2 Rector Street, New York, N.Y. 10006
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with the Obligor.
------------------------------
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 4. Trusteeships under Other Indentures.
------------------------------------
If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or participation
in any other securities, of the obligor are outstanding, furnish
the following information:
(a) Title of the securities outstanding under each such other
indenture.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of May 7, 1992, $400,000,000
principal amount Adelphia Communications Corporation 12-1/2%
Senior Notes due May 15, 2002.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of September 2, 1992,
$125,000,000 principal amount Adelphia Communications Corporation
11-7/8% Senior Debentures due September 15, 2004.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of July 28, 1993, $110,000,000
principal amount Adelphia Communications Corporations 10-1/4%
Senior Notes due July 15, 2000.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of March 11, 1993,
$130,000,000 principal amount Adelphia Communications Corporation
9-7/8% Senior Debentures due March 1, 2005.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of February 22, 1994,
$150,000,000 principal amount Adelphia Communications Corporation
9-1/2% Senior Pay-In-Kind Notes due February 15, 2004.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of February 26, 1997,
$350,000,000 principal amount Adelphia Communications Corporation
9 7/8% Senior Notes due March 1, 2007.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of July 7, 1997, $150,000,000
principal amount Adelphia Communications Corporation 10 1/2%
Senior Notes due July 15, 2004.
Adelphia Communications Corporation and Bank of Montreal Trust
Company, Trustee Indenture dated as of September 25, 1997,
$325,000,000 principal amount Adelphia Communications Corporation
9 1/4% Senior Notes due October 1, 2002.
<PAGE>
-3-
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section
310 (b) (1) of the Act arises as a result of the trusteeship under
any such other indenture, including a statement as to how the
indenture securities will rank as compared with the securities
issued under such other indenture.
The indenture to be qualified and the indenture(s) referred to in
paragraph A above are wholly unsecured and rank pari passu.
Item 16. List of Exhibits.
-----------------
List below all exhibits filed as part of this statement of eligibility.
A. Copy of Organization Certificate of Bank of Montreal Trust Company
to transact business and exercise corporate trust powers;
incorporated herein by reference as Exhibit "A" filed with Form
T-1 Statement, Registration No. 33-46118
B. Copy of the existing By-Laws of Bank of Montreal Trust Company;
incorporated herein by reference as Exhibit "B" filed with Form
T-1 Statement, Registration No. 33-46118
C. The consent of the Trustee required by Section 321(b) of the Act;
incorporated herein by reference as Exhibit "C" with Form T-1
Statement, Registration No. 33-46118
D. A copy of the latest report of condition of Bank of Montreal Trust
Company published pursuant to law or the requirements of its
supervising or examining authority, attached hereto as Exhibit "D"
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Bank of Montreal Trust Company, 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
October 27, 1997.
BANK OF MONTREAL TRUST COMPANY
By /s/ Therese Gaballah
-------------------------------
Therese Gaballah
Assistant Vice President
<PAGE>
EXHIBIT "D"
STATEMENT OF CONDITION
BANK OF MONTREAL TRUST COMPANY
NEW YORK
------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Due From Banks $ 594,897
-----------
Investment Securities:
State & Municipal 17,099,800
Other 100
-----------
Total Securities 17,099,900
-----------
Loans and Advances
Federal Funds Sold 2,000,000
Overdrafts 17,218
-----------
Total Loans and Advances 2,017,218
-----------
Investment in Harris Trust, NY 8,036,150
Premises and Equipment 122,818
Other Assets 2,721,789
-----------
TOTAL ASSETS $30,592,772
===========
LIABILITIES
Trust Deposits $ 6,408,362
Other Liabilities 659,021
-----------
TOTAL LIABILITIES 7,067,383
-----------
CAPITAL ACCOUNTS
Capital Stock, Authorized, Issued and
Fully Paid - 10,000 Shares of $100 Each 1,000,000
Surplus 4,222,188
Retained Earnings 18,298,208
Equity - Municipal Gain/Loss 4,993
-----------
TOTAL CAPITAL ACCOUNTS 23,525,389
-----------
TOTAL LIABILITIES
AND CAPITAL ACCOUNTS $30,592,772
===========
</TABLE>
I, Mark F. McLaughlin, Vice President, of the above-named bank do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
Mark F. McLaughlin
June 30, 1997
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declared that it has been examined
by us, and to the best of our knowledge and belief has been prepared in
conformance with the instructions and is true and correct.
Sanjiv Tandon
Kevin O. Healey
Steven R. Rothbloom
<PAGE>
EXHIBIT 99.01
LETTER OF TRANSMITTAL
FOR
9 1/4% NOTES DUE 2002
OF
ADELPHIA COMMUNICATIONS CORPORATION
PURSUANT TO THE EXCHANGE OFFER IN RESPECT OF
ALL OF THEIR OUTSTANDING 9 1/4% NOTES DUE 2002
FOR
9 1/4% NOTES DUE 2002, SERIES B
PURSUANT TO THE PROSPECTUS DATED , 1997
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1997, OR SUCH LATER DATE AND TIME TO WHICH THE EXCHANGE OFFER MAY BE
EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN
PRIOR TO THE EXPIRATION DATE.
TO: BANK OF MONTREAL TRUST COMPANY (THE "EXCHANGE AGENT")
By Registered or Certified Mail, By Facsimile
Hand or Overnight Courier Attention: Corporate Trust
Bank of Montreal Trust Company Department:
Wall Street Plaza (212) 701-7664
88 Pine Street, 19th Floor
New York, NY 10005 Confirm by Telephone:
Attention: Corporate Trust Department (212) 701-7652
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD NOTES
PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR
OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the Prospectus
(the "Prospectus"), dated , 1997, of Adelphia Communications Corporation
(the "Issuer"), which, together with this Letter of Transmittal and the
Instructions hereto (the "Letter of Transmittal"), constitute the Issuer's
offer (the "Exchange Offer") to exchange $1,000 principal amount of its 9 1/4%
Series B Notes due 2002 (the "New Notes") that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which the Prospectus constitutes a part, for each
$1,000 principal amount of its outstanding 9 1/4% Notes due 2002 (the "Old
Notes"), upon the terms and subject to the conditions set forth in the
Prospectus.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, is
acquiring the New Notes in its ordinary course of business and has no
arrangement or understanding with any person to participate in the
distribution of the New Notes to be received in the Exchange Offer.
<PAGE>
This Letter of Transmittal is to be used by Holders if: (i) certificates
representing Old Notes are to be physically delivered to the Exchange Agent
herewith by Holders; (ii) tender of Old Notes is to be made by book-entry
transfer to the Exchange Agent's account at The Depository Trust Company
("DTC") pursuant to the procedures set forth in the Prospectus under "The
Exchange Offer--Procedures for Tendering" by any financial institution that is
a participant in DTC and whose name appears on a security position listing as
the owner of Old Notes (such participants, acting on behalf of Holders (as
defined below), are referred to herein, together with such Holders, as "Acting
Holders"); or (iii) tender of Old Notes is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer--Guaranteed Delivery Procedures." Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person: (i)
in whose name Old Notes are registered on the books of the Issuer or any other
person who has obtained a properly completed bond power from the registered
Holder or (ii) whose Old Notes are held of record by DTC and who desires to
deliver such Old Notes by book entry transfer at DTC.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Exchange Offer. Holders who wish to tender their Old Notes must
complete this Letter of Transmittal in its entirety.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Exchange Agent. See Instruction 9 herein.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD NOTES
MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately executed schedule and affix the schedule to this
Letter of Transmittal. Tenders of Old Notes will be accepted only in principal
amounts equal to $1,000 or integral multiples thereof.
DESCRIPTION OF OLD NOTES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF
HOLDER(S) CERTIFICATE AGGREGATE
(PLEASE NUMBER(S)* PRINCIPAL AMOUNT
FILL IN, IF (ATTACH SIGNED LIST TENDERED
BLANK) IF NECESSARY) (IF LESS THAN ALL)**
- -----------------------------------------------------
--------------
--------------
--------------
--------------
--------------
--------------
--------------
--------------
- -----------------------------------------------------
<S> <C> <C>
TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED
- -----------------------------------------------------
</TABLE>
* Need not be completed by Holders tendering by book-entry transfer.
** Need not be completed by Holders who wish to tender with respect to all
Old Notes listed. See Instruction 2.
2
<PAGE>
[_]CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY DTC TO THE EXCHANGE
AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
DTC Book-Entry Account No.: ________________________________________________
Transaction Code No.: ______________________________________________________
If Holders desire to tender Old Notes pursuant to the Exchange Offer and (i)
certificates representing such Old Notes are not lost but are not immediately
available, (ii) time will not permit this Letter of Transmittal, certificates
representing such Old Notes or other required documents to reach the Exchange
Agent prior to the Expiration Date or (iii) the procedures for book-entry
transfer cannot be completed prior to the Expiration Date, such Holders may
effect a tender of such Old Notes in accordance with the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer--Guaranteed
Delivery Procedures."
- -------------------------------------------------------------------------------
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name(s) of Holder(s) of Old Notes: _________________________________________
Window Ticket No. (if any): ________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Eligible Institution that Guaranteed Delivery: _____________________
DTC Book-Entry Account No.: ________________________________________________
If Delivered by Book-Entry Transfer, Name of Tendering Institution: ________
Transaction Code No.: ______________________________________________________
- -------------------------------------------------------------------------------
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
3
<PAGE>
Ladies and Gentlemen:
Subject to the terms of the Exchange Offer, the undersigned hereby tenders
to the Issuer the principal amount of Old Notes indicated above. Subject to
and effective upon the acceptance for exchange of the principal amount of Old
Notes tendered in accordance with this Letter of Transmittal, the undersigned
sells, assigns and transfers to, or upon the order of, the Issuer all right,
title and interest in and to the Old Notes tendered hereby. The undersigned
hereby irrevocably constitutes and appoints the Exchange Agent as its agent
and attorney-in-fact (with full knowledge that the Exchange Agent also acts as
the agent of the Issuer and as Trustee under the Indenture for the Old Notes
and the New Notes) with respect to the tendered Old Notes with full power of
substitution to (i) deliver certificates for such Old Notes to the Issuer, or
transfer ownership of such Old Notes on the account books maintained by DTC,
together, in either such case, with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Issuer and (ii) present such Old
Notes for transfer on the books of the Issuer and receive all benefits and
otherwise exercise all rights of beneficial ownership of such Old Notes, all
in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that he or she has full power
and authority to tender, sell, assign and transfer the Old Notes tendered
hereby and that the Issuer will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim when the same are acquired by the Issuer. The
undersigned also acknowledges that this Exchange Offer is being made in
reliance upon an interpretation by the staff of the Securities and Exchange
Commission that the New Notes issued in exchange for the Old Notes pursuant to
the Exchange Offer may be offered for resale, resold and otherwise transferred
by the holders thereof (other than any such holder that is an "affiliate" of
the Issuer 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 Notes 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 Notes. The undersigned
acknowledges that if he or she is participating in the Exchange Offer for the
purpose of distributing the New Notes, the undersigned must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of the New Notes. If the undersigned
is a broker-dealer that will receive New Notes for its own account in exchange
for Old Notes and the undersigned represents that such Old Notes were acquired
as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale
of such New Notes, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned represents that (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of such Holder's
business, (ii) such Holder has no arrangements with any person to participate
in the distribution of such New Notes and (iii) such Holder is not an
"affiliate," as defined under Rule 405 of the Securities Act, of the Issuer
or, if such Holder is an affiliate, that such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the assignment and transfer of the Old Notes tendered
hereby.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted validly tendered Old Notes when, as and if the Issuer has given oral
or written notice thereof to the Exchange Agent. If any tendered Old Notes are
not accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for any such unaccepted Old Notes will be terminated (except as
noted below with respect to tenders through DTC), without expense, to the
undersigned at the address shown below or at a different address shown below
or at a different address as may be indicated under "Special Issuance
Instructions" as soon as practicable following the Expiration Date.
4
<PAGE>
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned and every obligation under this Letter of Transmittal shall be
binding upon the undersigned's heirs, personal representatives, successors and
assigns.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Issuer upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the certificates representing the New Notes issued in exchange for the
Old Notes accepted for exchange and return any Old Notes not tendered or not
exchanged, in the name(s) of the undersigned (or in such event in the case of
Old Notes tendered by DTC, by credit to the account at DTC). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please send the
certificates representing the New Notes issued in exchange for the Old Notes
accepted for exchange and any certificates for Old Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at
the address shown below the undersigned's signatures, unless, in either event,
tender is being made through DTC. In the event that both "Special Issuance
Instructions" and "Special Delivery Instructions" are completed, please issue
the certificates representing the New Notes issued in exchange for the Old
Notes accepted for exchange and return any Old Notes not tendered or not
exchanged in the name(s) of, and send said certificates to, the person(s) so
indicated. The undersigned recognizes that the Issuer has no obligation
pursuant to the "Special Issuance Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
holder(s) thereof if the Issuer does not accept for exchange any of the Old
Notes so tendered.
5
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD NOTES REGARDLESS
OF WHETHER OLD NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Notes
exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if
tendered by a participant in DTC, exactly as such participant's name appears
on a security position listing as the owner of Old Notes, or by person(s)
authorized to become registered Holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person
acting in a fiduciary or representative capacity, such person must set forth
his or her full title below under "Capacity" and submit evidence satisfactory
to the Issuer of such person's authority to so act. See Instruction 3 herein.
If the signature appearing below is not of the registered Holder(s) of the Old
Notes, then the registered Holder(s) must sign a valid proxy.
X __________________________________ Date: ______________________________
X __________________________________ Date: ______________________________
Signature(s) of Holder(s) or Address: ___________________________
Authorized Signatory
____________________________________
Name(s): ___________________________ (Including Zip Code)
____________________________________ Area Code and Telephone No.: _______
(Please Print)
Capacity: __________________________
Social Security No.: _______________
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
_____________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
_____________________________________________________________________________
(Address (including zip code) and Telephone Number
(including area code) of Firm)
_____________________________________________________________________________
(Authorized Signatures)
_____________________________________________________________________________
(Printed Name)
_____________________________________________________________________________
(Title)
Date: ______________________________
6
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTION 3 AND 4 HEREIN)
To be completed ONLY if
certificates for Old Notes in a
principal amount not tendered are
to be issued in the name of, or the
New Notes issued pursuant to the
Exchange Offer are to be issued to
the order of, someone other than
the person or persons whose
signature(s) appear(s) within this
Letter of Transmittal or issued to
an address different from that
shown in the box entitled
"Description of Old Notes" within
this Letter of Transmittal, or if
Old Notes tendered by book-entry
transfer that are not accepted for
purchase are to be credited to an
account maintained at DTC.
Name: ______________________________
(Please Print)
Address: ___________________________
(Please Print)
Zip Code: __________________________
____________________________________
Taxpayer Identification or
Social Security Number
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4 HEREIN)
To be completed ONLY if
certificates for Old Notes in a
principal amount not tendered or
not accepted for purchase or the
New Notes issued pursuant to the
Exchange Offer are to be sent to
someone other than the person or
persons whose signature(s)
appear(s) within this Letter of
Transmittal or to an address
different from that shown in the
box entitled "Description of Old
Notes" within this Letter of
Transmittal.
Name: ______________________________
(Please Print)
Address: ___________________________
(Please Print)
Zip Code: __________________________
____________________________________
Taxpayer Identification or
Social Security Number
7
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: ADELPHIA COMMUNICATIONS CORPORATION
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN:------------
FORM W-9 TIN IN THE BOX AT RIGHT AND Social security
DEPARTMENT OF CERTIFY BY SIGNING AND DATING number
THE TREASURY BELOW. OR
INTERNAL
REVENUE SERVICE
------------------
Employer
identification
number
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
PART 2--Tin Applied For [_]
PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND CERTIFICATION
-----------------------------------------------------
(1) the number shown on this form is my correct
Taxpayer Identification Number (or I am
waiting for a number to be issued to me).
(2) I am not subject to backup withholding either
because: (a) I am exempt from backup
withholding, or (b) I have not been notified
by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding,
and
(3) any other information provided on this form is
true and correct.
-----------------------------------------------------
You must cross out item (2) of the above
certification if you have been notified by the IRS
that you are subject to backup withholding because
of underreporting of interest or dividends on your
tax return and you have not been notified by the
IRS that you are no longer subject to backup
withholding.
SIGNATURE _________________ DATE _________________
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a Taxpayer Identification Number to
the appropriate Internal Revenue Service Center or Social Security
Administrative Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number by the time of the exchange, 31 percent of all
reportable payments made to me thereafter will be withheld until I provide
a number.
-------------------------------------
-----------------------------------
Signature Date
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The certificates
for the tendered Old Notes (or a confirmation of a book-entry into the
Exchange Agent's account at DTC of all Old Notes delivered electronically), as
well as a properly completed and duly executed copy of this Letter of
Transmittal or facsimile hereof and any other documents required by this
Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration
Date. The method of delivery of the tendered Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the Holder and, except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange
Agent. Instead of delivery by mail, it is recommended that the Holder use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assume timely delivery. No Letter of Transmittal or Old Notes
should be sent to the Issuer.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, this Letter
of Transmittal or any other documents required hereby to the Exchange Agent
prior to the Expiration Date must tender their Old Notes and follow the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible
Institution; (ii) prior to the Expiration Date, the Exchange Agent must have
received from the Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand
delivery) setting forth the name and address of the Holder of the Old Notes,
the certificate number or numbers of such Old Notes and the principal amount
of Old Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within five business days after the Expiration Date, this
Letter of Transmittal (or facsimile thereof) together with the certificate(s)
representing the Old Notes (or a confirmation of electronic delivery of book-
entry delivery into the Exchange Agent's account at DTC) and any of the
required documents will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) such properly completed and executed Letter of
Transmittal (or facsimile hereof), as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all tendered
Old Notes in proper form for transfer (or a confirmation of electronic mail
delivery of book-entry delivery into the Exchange Agent's account at DTC),
must be received by the Exchange Agent within five business days after the
Expiration Date, all as provided in the Prospectus under the caption
"Guaranteed Delivery Procedures." Any Holder of Old Notes who wishes to tender
his Old Notes pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
prior to 5:00 p.m., New York City time, on the Expiration Date.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Notes will be determined
by the Issuer in its sole discretion, which determination will be final and
binding. The Issuer reserves the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes the Issuer's acceptance of which
would, in the opinion of counsel for the Issuer, be unlawful. The Issuer also
reserves the right to waive any irregularities or conditions of tender as to
particular Old Notes. The Issuer's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be
cured within such time as the Issuer shall determine. Neither the Issuer, 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
Notes, nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Notes will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Old Notes
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned
without cost by the Exchange Agent to the tendering Holders of Old Notes,
unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
2. PARTIAL TENDERS. Tenders of Old Notes will be accepted in all
denominations of $1,000 and integral multiples in excess thereof. If less than
the entire principal amount of any Old Notes is tendered, the tendering
9
<PAGE>
Holders should fill in the principal amount tendered in the third column of
the chart entitled "Description of Old Notes." The entire principal amount of
Old Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Old Notes is
not tendered, Old Notes for the principal amount of Old Notes delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise
indicated. If the entire principal amount of all Old Notes is not tendered,
Old Notes for the principal amount of Old Notes not tendered and a certificate
or certificates representing New Notes issued in exchange of any Old Notes
accepted will be sent to the Holder at his or her registered address, unless a
different address is provided in the appropriate box on this Letter of
Transmittal or unless tender is made through DTC, promptly after the Old Notes
are accepted for exchange.
3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof)
is signed by the registered Holder(s) of the Old Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Notes without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder(s) of Old Notes tendered and the certificate(s) for New
Notes issued in exchange thereof is to be issued (or any untendered principal
amount of Old Notes is to be reissued) to the registered Holder, such Holder
need not and should not endorse any tendered Old Note, nor provide a separate
bond power. In any other case, such Holder must either properly endorse the
Old Notes tendered or transmit a properly completed separate bond power with
this Letter of Transmittal, with the signatures on the endorsement or bond
power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and
unless waived by the Issuer, evidence satisfactory to the Issuer of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 3 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal (or facsimile hereof) must be
guaranteed by an Eligible Institution unless the Old Notes tendered pursuant
thereto are tendered (i) by a registered Holder (including any participant in
DTC whose name appears on a security position listing as the owner of Old
Notes) who has not completed the box set forth herein entitled "Special
Issuance Instructions" or the box entitled "Special Delivery Instructions" or
(ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should
indicate, in the applicable spaces, the name and address to which New Notes or
substitute Old Notes for principal amounts not tendered or not accepted for
exchange are to be issued or sent, if different from the name and address of
the person signing this Letter of Transmittal (or in the case of tender of the
Old Notes through DTC, if different from DTC). In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
5. TAX IDENTIFICATION NUMBER. Under the federal income tax laws, payments
that may be made by the Company on account of New Notes issued pursuant to the
Exchange Offer may be subject to backup withholding at the rate of 31%. In
order to avoid such backup withholding, each tendering holder should complete
and sign the Substitute Form W-9 included in this Letter of Transmittal and
either (a) provide the correct taxpayer identification number ("TIN") and
certify, under penalties of perjury, that the TIN provided is correct and that
(i) the holder has not been notified by the Internal Revenue Service (the
"IRS") that the holder is subject to backup withholding as a result of failure
to report all interest or dividends or (ii) the IRS has notified the holder
that the holder is no longer subject to backup withholding; or (b) provide an
adequate basis for exemption. If the tendering holder has not been issued a
TIN and has applied for one, or intends to apply for one in the near future,
such holder should write "Applied For" in the space provided for the TIN in
Part I of the Substitute Form W-9,
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<PAGE>
sign and date the Substitute Form W-9 and sign the Certificate of Payee
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part
I, the Company (or the Transfer Agent with respect to the New Notes or a
broker or custodian) may still withhold 31% of the amount of any payments made
on account of the New Notes until the holder furnishes the Company or the
Transfer Agent with respect to the New Notes, broker or custodian with its
TIN. In general, if a holder is an individual, the taxpayer identification
number is the Social Security number of such individual. If the Exchange Agent
or the Company is not provided with the correct TIN, the holder may be subject
to a $50 penalty imposed by the IRS. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, such holder must submit a
statement (generally, IRS Form W-8), signed under penalties of perjury,
attesting to that individual's exempt status. Such statements can be obtained
from the Exchange Agent.
Failure to complete the Substitute Form W-9 will not, by itself, cause Old
Notes to be deemed invalidly tendered, but may require the Company or the
Transfer Agent with respect to the New Notes, broker or custodian to withhold
31% of the amount of any payments made on account of the New Notes. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the IRS.
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, certificates representing New Notes or Old Notes 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 Notes tendered hereby, or if tendered Old Notes
are registered in the name of any person other than the person signing this
Letter of Transmittal, or if a transfer tax is imposed for any reason other
than the exchange of Old Notes pursuant to the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered Holder or any
other person) will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
this Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering Holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to amend,
waive or modify specified conditions in the Exchange Offer in the case of any
Old Notes tendered.
8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering Holder
whose Old Notes have been mutilated, lost, stolen or destroyed should contact
the Exchange Agent at the address indicated herein for further instruction.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Prospectus or this Letter
of Transmittal may be directed to the Exchange Agent at the address specified
in the Prospectus. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
CERTIFICATE SURRENDERED OLD NOTES TENDERED OLD NOTES ACCEPTED
<S> <C> <C>
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Delivery Prepared by _______________ Check by _____________ Date ________________
- -------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9 1/4% NOTES DUE 2002 (THE "OLD NOTES")
OF
ADELPHIA COMMUNICATIONS CORPORATION
This form, or one substantially equivalent hereto, must be used to tender
Old Notes pursuant to the Exchange Offer described in the Prospectus dated
, 1997 (the "Prospectus") of Adelphia Communications Corporation (the
"Company"), if a holder of Old Notes cannot deliver a Letter of Transmittal to
the Exchange Agent listed below (the "Exchange Agent") or cannot either
deliver the Old Notes to be tendered or complete the procedure for book-entry
transfer prior to 5:00 P.M., New York City time, on , 1997 or such later
date and time to which the Exchange Offer may be extended (the "Expiration
Date"). This form, or one substantially equivalent hereto, must be delivered
by hand or sent by facsimile transmission or mail to the Exchange Agent, and
must be received by the Exchange Agent on or prior to the Expiration Date. See
"The Exchange Offer--Procedures for Tendering" in the Prospectus. Capitalized
terms used herein and not defined herein shall have the meanings ascribed
thereto in the Prospectus.
TO: BANK OF MONTREAL TRUST COMPANY, EXCHANGE AGENT
By Mail, by Hand or Overnight Delivery:
Bank of Montreal Trust Company
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005
Attn: Corporate Trust Department
By Facsimile:
(212) 701-7664
Confirm by Telephone:
(212) 701-7652
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby represents that he or she is the holder of the Old
Notes indicated below and that the Letter of Transmittal cannot be delivered
to the Exchange Agent and/or either the certificates representing such Old
Notes cannot be delivered to the Exchange Agent or the procedure for book-
entry transfer cannot be completed prior to the Expiration Date. The
undersigned hereby tenders the Old Notes indicated below pursuant to the
guaranteed delivery procedures set forth in the Prospectus and the Letter of
Transmittal, receipt of which is hereby acknowledged.
Name(s) of Tender Holder(s): __________________________________________________
_______________________________________________________________________________
Please Print or Type
_______________________________________________________________________________
Signature
Address(es): __________________________________________________________________
_______________________________________________________________________________
Telephone Number(s): __________________________________________________________
Name(s) in which Old Notes are registered: ____________________________________
CERTIFICATE NO(S). (IF APPLICABLE)* PRINCIPAL AMOUNT TRANSFERRED
- -------------------------------------------------------------------------------
____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________
*Need not be completed by book-entry holders.
2
<PAGE>
GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, 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 a correspondent in the
United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby
guarantees that the undersigned will deliver to the Exchange Agent the
certificates representing the Old Notes being tendered hereby in proper form
for transfer (or a confirmation of book-entry transfer of such Old Notes,
into the Exchange Agent's account at the book-entry transfer facility) with
delivery of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
required documents, all within five business days after the Expiration Date.
Name of Firm _______________________
------------------------------------
Authorized Signature
Address ____________________________ Name ______________________________
Please Print or Type
------------------------------------ Title _____________________________
Zip Code
Telephone No. _____________________ Dated _____________________________
The institution that completes this form must communicate the guarantee to
the Exchange Agent and must deliver the certificates representing any Old
Notes (or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account at the book-entry transfer facility) and the Letter
of Transmittal to the Exchange Agent within the time period shown herein.
Failure to do so could result in a financial loss to such institution.
3
