SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) July 24, 1997
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-16014 23-2417713
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
Main at Water Street - Coudersport, PA 16915-1141 (Address of
principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 274-9830
Item 5. Other Events
The Registrant is filing certain exhibits herewith under Item 7 hereof.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
3.01 Certificate of Incorporation of Adelphia Communications
Corporation, as amended (Filed herewith)
4.01 Certificate of Designations for 13% Series A and Series B
Cumulative Exchangeable Preferred Stock (contained in Exhibit
3.01 filed herewith)
4.02 Certificate of Designations for Series C Convertible Preferred
Stock (contained in Exhibit 3.01 filed herewith)
4.03 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 (Filed
herewith)
4.04 Form of 10-1/2% Senior Note due 2004
(contained in Exhibit 4.03)
4.05 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 (set forth
as Annex A to Exhibit 4.01 which is contained in Exhibit 3.01
filed herewith)
4.06 Form of Certificate for 13% Cumulative Exchangeable Preferred
Stock (Filed herewith)
4.07 Form of Certificate for Series C Convertible Preferred Stock
(Filed herewith)
10.01 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 (Filed herewith)
10.02 Registration Rights Agreement among Adelphia Communications
Corporation, the Initial Purchasers and Highland Holdings,
dated July 7, 1997, regarding the 13% Cumulative Exchangeable
Preferred Stock (Filed herewith)
10.03 Registration Rights Agreement among Adelphia Communications
Corporation and the Initial Purchasers, dated July 7, 1997,
regarding the 10-1/2 % Senior Notes due 2004 (Filed herewith)
10.04 Registration Rights Agreement among Adelphia Communications
Corporation, Highland Holdings and Telesat Cablevision, Inc.,
dated July 7, 1997 (Filed herewith)
10.05 Purchase Agreement between Adelphia and Highland Holdings,
dated July 1, 1997 (Filed herewith)
10.06 Series C Preferred Stock Purchase Agreement among Adelphia
Communications Corporation, Highland Holdings and Telesat
Cablevision, Inc., dated June 22, 1997 (Filed herewith)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: July 24, 1997 ADELPHIA COMMUNICATIONS CORPORATION
(Registrant)
By: /s/Timothy J. Rigas
Timothy J. Rigas
Executive Vice President,
Treasurer and Chief
Financial Officer
EXHIBIT INDEX
Exhibit No. Description
3.01 Certificate of Incorporation of Adelphia Communications
Corporation, as amended (Filed herewith)
4.01 Certificate of Designations for 13% Series A and Series B
Cumulative Exchangeable Preferred Stock (contained in Exhibit
3.01 filed herewith)
4.02 Certificate of Designations for Series C Convertible Preferred
Stock (contained in Exhibit 3.01 filed herewith)
4.03 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 (Filed
herewith)
4.04 Form of 10-1/2% Senior Note due 2004
(contained in Exhibit 4.03)
4.05 Form of Indenture, with respect to the Registrant's 13% Senior
Subordinated Exchange Debentures due 2009, between the
Registrant and the Bank of Monteal Trust Company (set forth as
Annex A to Exhibit 4.01 which is contained in Exhibit 3.01
filed herewith)
4.06 Form of Certificate for 13% Cumulative Exchangeable Preferred
Stock (Filed herewith)
4.07 Form of Certificate for Series C Convertible Preferred Stock
(Filed herewith)
10.01 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 (Filed herewith)
10.02 Registration Rights Agreement among Adelphia Communications
Corporation, the Initial Purchasers and Higthland Holdings,
dated July 7, 1997, regarding the 13% Cumulative Exchangeable
Preferred Stock (Filed herewith)
10.03 Registration Rights Agreement among Adelphia Communications
Corporation and the Initial Purchasers, dated July 7, 1997,
regarding the 10-1/2 % Senior Notes due 2004 (Filed herewith)
10.04 Registration Rights Agreement among Adelphia Communications
Corporation, Highland Holdings and Telesat Cablevision, Inc.,
dated July 7, 1997 (Filed herewith)
10.05 Purchase Agreement between Adelphia and Highland Holdings,
dated July 1, 1997 (Filed herewith)
10.06 Series C Preferred Stock Purchase Agreement among Adelphia
Communications Corporation, Highland Holdings and Telesat
Cablevision, Inc., dated June 22, 1997 (Filed herewith)
CERTIFICATE OF INCORPORATION
OF
ADELPHIA COMMUNICATIONS CORPORATION
FIRST: The name of the corporation is Adelphia Communications
Corporation.
SECOND: The address of the corporation's registered office in the State
of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County
of Kent. The name of its registered agent at such address is the Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The aggregate number of shares of capital stock which the
Corporation shall have the authority to issue shall be 230,000,000 shares which
shall be classified into three classes as follows:
5,000,000 shares of Preferred Stock, $.01 par value per share (the
"Preferred Stock");
200,000,000 shares of Class A Common Stock, par value $.01 per share;
and
25,000,000 shares of Class B Common Stock, par value $.01 per share.
The Class A Common Stock and the Class B Common Stock are sometimes together
referred to as the "Common Stock."
A description of each class of shares and a statement of the
designations and the powers, preferences, and rights and the qualifications,
limitation, or restrictions thereof and of the authority vested in the Board of
Directors to establish series of the Preferred Stock and to fix the variations
in the relative rights and preferences as between the series of such class are
as follows:
1. The Preferred Stock.
The Board of Directors is authorized, subject to limitations prescribed
by law, to provide for the issuance of the Preferred Stock in series, and by
filing a certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, and to fix the designations and the powers, preferences and rights of
the shares of each such series and the qualifications, limitations, or
restrictions thereof.
The authority of the Board with respect to each series shall include,
but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment
of dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of
such voting rights;
(d) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions
and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and the relative rights of priority, if
any, of payment of shares of that series;
(h) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
2. The Common Stock.
a. Voting Rights
(i) The holders of Class A Common Stock shall be entitled by
class vote, exclusive of all other stockholders, to elect one director of the
entire Board of Directors of the Corporation at any annual meeting of the
stockholders for the election of directors. If during the interval between
annual meetings of stockholders for the election of directors, the number of
directors who have been elected by the holders of Class A Common Stock shall, by
reason of resignation, death, disqualification or removal, be reduced, the
vacancy or vacancies in the directors so created may be filled by a majority
vote of the remaining directors then in office, even if less than a quorum, or
by a sole remaining director. Any director elected by the remaining directors
then in office to fill any vacancy in the directorship designated by the holders
of Class A Common Stock may be removed from office, with or without cause, by
vote of the holders of or majority of the shares of Class A Common Stock voting
as a class.
(ii) Except as provided in Sub-paragraph (i) above, each
holder of Class A Common Stock shall be entitled to one vote for each share of
Class A Common Stock held by such stockholder in the election of directors and
on all other matters presented to the stockholders, and each holder of Class B
Common Stock shall be entitled to ten votes for each share of Class B Common
Stock held by such stockholder in the election of directors and on all other
matters presented to stockholders. The stockholders of the Corporation shall not
be entitled to cumulate their votes in any election of the directors of the
Corporation.
(iii) Except as provided in Sub-paragraph (i) above, the
holders of Class A Common Stock and Class B Common Stock (and any series or
class of Preferred Stock, if such series or class of Preferred Stock shall be
entitled to vote as a single class with the Common Stock, pursuant to the
designations, powers, preferences, privileges and rights of such class or
series) shall vote together as a single class, except as otherwise required by
the General Corporation Law of Delaware, provided further, however, that the
number of authorized shares of Class A Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote, voting as a single class.
b. Conversion Rights
(i) Subject to and upon compliance with the provisions of this
Paragraph b, Class B Common Stock shall be convertible into fully paid and
nonassessable Class A Common Stock on the basis of one share of Class A Common
Stock for each share of Class B Common Stock surrendered for conversion. Any
holder of Class B Common Stock may, at the option of such holder, at any time
during normal business hours and from time to time convert any or all shares of
Class B Common Stock held by such holder into an equal number of shares of Class
A Common Stock by delivering to the principal executive offices of the
Corporation or any transfer agent for the Class A Common Stock (i) the
certificate or certificates representing the share or shares of Class B Common
Stock to be converted, duly endorsed, (ii) written notice to the Corporation
stating that such holder elects to convert such share or shares and stating the
name and addresses in which each certificate for the shares of Class A Common
Stock issued upon such conversion is to be issued, (iii) and any transfer tax
stamps or funds therefore required to be paid in connection with the transfer.
(ii) Conversion shall be deemed to have been effected at the
close of business on the date of the surrender of the certificate or
certificates representing shares of Class B Common Stock in the manner described
above and such date is referred to herein as the "Conversion Date." On the
Conversion Date or as promptly thereafter as practicable, the Corporation or its
transfer agent shall issue and deliver to the holder of the shares of Class B
Common Stock surrendered for conversion a certificate for the number of full
shares of Class A Common Stock issuable upon the conversion or transfer of such
shares of Class B Common Stock. The person in whose name the certificate is to
be issued shall be deemed to have become a holder of record of the shares of
Class A Common Stock on the Conversion Date. The Corporation hereby reserves and
shall at all times reserve and keep available, out of its authorized and
unissued Class A Common Stock, for the purposes of effecting conversions, such
number of duly authorized shares of Class A Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of Class B
Common Stock, provided, that nothing contained herein shall be construed to
preclude the Corporation from satisfying its obligations in respect of the
conversion by delivery of purchased shares of Class A Common Stock which are
held in the treasury of the Corporation. The Corporation covenants that if any
Class A Common Stock required to be reserved for purposes of the conversion
hereunder require registration with or approval of any governmental authority
under any federal or state law before such Class A Common Stock may be issued
upon conversion, the Corporation will cause such shares to be duly registered or
approval, as the case may be. The Corporation covenants that all Class A Common
Stock which shall be issued upon conversion of the Class B Common Stock will,
upon issue, be fully paid and nonassessable and not subject to any preemptive
rights.
(iii) No adjustments in respect to dividends shall be made
upon the conversion of any share of Class B Common Stock, provided, however,
that if a share shall be converted subsequent to the record date for the payment
of a dividend or other distribution on Class B Common Stock but prior to such
payment, the registered holder of such share at the close of business on such
record date shall be entitled to receive the dividend or other distribution
payable on such share on the date set for payment of such dividend or other
distribution notwithstanding the conversion thereof hereunder or the
Corporation's default in payment of the dividend due on such date.
c. Dividends
(i) After there shall have been paid or declared and set apart
for payment full cumulative dividends for all past dividend periods and the then
current dividend period on any class or series of Preferred Stock as provided
for in the terms and provisions of any such class or series of Preferred Stock
(with any interest required to be paid thereon), and after there shall have been
set apart a sum or sums sufficient to provide for all past and then current
sinking fund installments for the Preferred Stock as provided in the terms and
provisions, if any, of any class or series of any Preferred Stock (with any
interest required to be paid thereon), then out of any funds lawfully available
therefor dividends may be paid upon the Common Stock and upon any class of
shares ranking as to dividends or distribution of assets subordinate to the
Preferred Stock if, when and as declared by the Board of Directors in its
discretion, and shares of any outstanding class of share of the Corporation
ranking as to dividends or distribution of assets subordinate to the Preferred
Stock may be purchased, acquired, redeemed or otherwise retired by the
Corporation.
(ii) Except as hereinafter in this Paragraph c provided and
except with respect to a "stock dividend" as hereinafter defined, no dividend
may be declared or paid in cash on Class B Common Stock unless concurrently
therewith a dividend in the amount per share of one hundred five percent (105%)
of the amount per share of the dividend declared and paid in cash on the Class B
Common Stock is declared and paid on the Class A Common Stock; and no dividend
may be declared or paid in property on either class of Common Stock unless
concurrently therewith a dividend of the same value per share is declared and
paid on the other class of Common Stock. If at any time a dividend is to be paid
in Class A Common Stock or Class B Common Stock (a "stock dividend"), such stock
dividend may be declared and paid only as follows: (i) so long as no share of
Class A Common Stock has been issued and is outstanding, shares of Class A
Common Stock may be paid to holders of Class B Common stock and (ii) if shares
of both Class A Common Stock and Class B Common Stock are issued and
outstanding, shares of Class A Common Stock may be paid only to holders of Class
A Common Stock and shares of Class B Common Stock may be paid only to holders of
Class B Common Stock, and whenever a stock dividend is paid, the same number of
shares of stock shall be paid in respect of each outstanding share of Class A
Common Stock and each outstanding share of Class B Common Stock.
d. Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Corporation, or any reduction of its capital, resulting in a
distribution of its assets to its stockholders, whether voluntary or
involuntary, after there shall have been paid or set apart for the holders of
the Preferred Stock the full preferential amount to which they are respectively
entitled pursuant to the terms and provisions of all outstanding series and
classes of Preferred Stock, there shall be paid to holders of shares of Class A
Common Stock the sum of $1.00 per share and the amount of all unpaid declared
dividends thereon before any sums shall be paid or any assets distributed among
the holders of shares of Class B Common Stock (and if the assets of the
Corporation shall be insufficient to pay the holders of shares of Class A Common
Stock the full amount thus distributable, then such assets shall be distributed
ratably among the holders of the shares of Class A Common Stock); then and
thereafter there shall be paid to the holders of shares of Class B Common Stock
the sum of $1.00 per share and the amount of all unpaid declared dividends
thereon (and if the assets of the Corporation shall be insufficient to pay to
holders of shares of Class B Common Stock the full amount thus distributable,
then the entire remaining assets of the Corporation shall be distributed ratably
among the holders of the shares of Class B Common Stock); and after the
foregoing payments to the holders of the shares of Class A Common Stock and the
shares of Class B Common Stock, then the remaining funds shall be distributed
among and paid to the holders of the shares of Class A Common Stock and the
shares of Class B Common Stock, share and share alike, and in proportion to
their holdings.
e. Change in Class. Neither the shares of Class A Common Stock nor the
shares of Class B Common Stock may be subdivided, consolidated, reclassified or
otherwise changed unless concurrently the shares of the other class of Common
Stock is subdivided, consolidated, reclassified or otherwise changed in the same
proportion and the same manner.
f. General. Except as above provided, each share of Class A
Common Stock and each share of Class B Common Stock shall be identical and have
the same powers, preferences, rights, qualifications, limitations and
restrictions and rank equally, share ratably and be identical in all respects as
to all matters.
FIFTH: The name and mailing address of the incorporator is Daniel R.
Milliard, 5 West Third Street, Coudersport, Pennsylvania 16915.
SIXTH: The Corporation shall have perpetual existence.
SEVENTH: The Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal by-laws of the Corporation, but the
stockholders may adopt additional by-laws and may amend or repeal any by-law
whether adopted by them or otherwise.
EIGHTH: Elections of directors need not be by written ballot except
and to the extent provided in the by-laws of the Corporation.
NINTH: Any director or the entire board of directors may be removed,
with or without cause, by the requisite vote of the shares then entitled to vote
upon such removal.
TENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director for any act or omission occurring on or after July 1, 1986;
provided, however, that the foregoing shall not eliminate or limit the liability
of a director (a) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (b) for any act or omission not in good faith
or which involves intentional misconduct or a knowing violation of law, (c)
under Section 174 of the General Corporation Law of the State of Delaware , or
(d) for any transaction from which the director derived an improper personal
benefit.
<PAGE>
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
13% SERIES A CUMULATIVE EXCHANGEABLE PREFERRED STOCK
AND
13% SERIES B CUMULATIVE EXCHANGEABLE PREFERRED STOCK
OF
ADELPHIA COMMUNICATIONS CORPORATION
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------
ADELPHIA COMMUNICATIONS CORPORATION (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, certifies that pursuant to the authority contained in its
Certificate of Incorporation, as amended (the "Certificate of Incorporation")
and in accordance with the provisions of Section 151 of the General Corporation
Law of the State of Delaware, the 1997 Debt Offering Committee of the Board of
Directors of the Corporation by unanimous written consent dated July 2, 1997
duly approved and adopted the following resolution which resolution remains in
full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the 1997
Debt Offering Committee of the Board of Directors on June 22, 1997 and pursuant
to the authority vested in the Board of Directors by the Certificate of
Incorporation, the 1997 Debt Offering Committee of the Board of Directors does
hereby designate, create, authorize and provide for the issue of 13% Series A
Cumulative Exchangeable Preferred Stock (the "Series A Exchangeable Preferred
Stock"), par value $.01 per share, with a liquidation preference of $100.00 per
share, consisting of 1,500,000 shares and 13% Series B Cumulative Exchangeable
Preferred Stock, par value $.01 per share, with a liquidation preference of
$100.00 per share, consisting of 1,500,000 shares (the "Series B Exchangeable
Preferred Stock" and together with the Series A Exchangeable Preferred Stock,
the "Exchangeable Preferred Stock"), no shares of either of such series having
heretofore been issued by the Corporation, possessing the following voting
powers, preferences and relative, participating, optional and other special
rights, and qualifications, limitations and restrictions thereof as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural):
"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, the Corporation, (ii) which beneficially owns or holds 10%
or more of any class of the voting Capital Stock of the Corporation, or (iii) of
which 10% or more of the voting Capital Stock is beneficially owned or held by
the Corporation, a Restricted Subsidiary or an Unrestricted Subsidiary of the
Corporation. Without a limitation, an Affiliate also includes any director or
executive officer of the Corporation. 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
the Corporation.
"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 the Corporation only, the
Corporation's Aggregate Excess Restricted Investments for such fiscal quarter.
"Applicable Redemption Price" means a price per share equal to
the following redemption prices (expressed as a percentage of the Liquidation
Preference thereof) during the twelve-month periods commencing on July 15 of the
years indicated:
2002........................................ 106.500%
2003........................................ 105.417%
2004........................................ 104.333%
2005........................................ 103.250%
2006........................................ 102.167%
2007........................................ 101.083%
2008 and thereafter......................... 100.000%
in each case, together with accrued and unpaid dividends and Liquidated Damages,
if any thereon to the Redemption Date; provided, that the Applicable Redemption
Price with respect to any redemption by the Corporation under Section 4(c) below
shall be the redemption price specified in Section 4(c) below.
"Asset Sale" means the sale, transfer or other disposition
(other than to the Corporation 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 the Corporation or of any Restricted Subsidiary or (c) all
or substantially all of the assets of a Corporation system or part thereof
serving at least 5,000 basic subscribers, a division, line of business or
comparable business segment of the Corporation or any Restricted Subsidiary.
"Board of Directors" means the Board of Directors of the
Corporation or any committee authorized to act therefor.
"Business Day" means a day other than a Saturday or a Sunday
or any federal of New York holiday.
"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
any 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 the Corporation from
the issue or sale (other than to a Subsidiary) by the Corporation of any class
of its Capital Stock on or after January 1, 1993 (including Capital Stock of the
Corporation issued after January 1, 1993 upon conversion of or in exchange for
other securities of the Corporation but excluding the Exchangeable Preferred
Stock).
"Capitalized Lease Obligations" means Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Certificate of Designations" means this certificate of
Designations, Preferences and Relative, Participating, Optional and other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof of the 13% Series A Cumulative Exchangeable Preferred Stock
and the 13% Series B Cumulative Exchangeable Preferred Stock of Adelphia
Communications Corporation
"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 the
Corporation's Board of Directors and attaching to the then outstanding voting
Capital Stock of the Corporation 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 the Corporation's Board of
Directors and attaching to the then outstanding voting Capital Stock of the
Corporation, or (ii) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the Corporation's
Board of Directors (together with any new directors whose election by the
Corporation's Board of Directors or whose nomination for election by the
Corporation'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 the Corporation'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.
"Class A Common Stock" means the Corporation's Class A Common
Stock, $.01 par value per share.
"Class B Common Stock" means the Corporation's Class B Common
Stock, $.01 par value per share.
"Common Equity" means the Class A Common Stock and the Class B
Common Stock and any other stock of the Corporation, howsoever designated,
authorized after the date of this Certificate of Designations, that has the
right (subject always to prior rights of any class or series of preferred stock)
to participate in the distribution of the assets and earnings of the Corporation
without limit as to per share amount.
"Common Stock" means the Class A Common Stock and the Class B
Common Stock.
"Corporation" means the party named as such in the first
paragraph of this Certificate of Designations.
"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 GAAP. 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 GAAP consistently applied.
"Convertible Preferred Stock" means the 100,000 shares of
Series C Cumulative Convertible Preferred Stock purchased by certain Affiliates
of the Rigas Family and a Subsidiary of the FPL Group, Inc., each share of which
is convertible into 117.9245 shares of Class A Common Stock of the Corporation.
"Cumulative Credit" means the sum of (i) Capital Stock Sale
Proceeds plus (ii) cumulative EBITDA of the Corporation 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 the Corporation 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 GAAP.
"Dividend Payment Date" has the meaning set forth in Section
2(a) below.
"Dividend Period" means (i) with respect to the Series A
Exchangeable Preferred Stock, the period from, and including, the Initial Issue
Date to, but not including, the first Dividend Payment Date and thereafter, each
period from, and including, the preceding Dividend Payment Date to, but not
including the next Dividend Payment Date and (ii) with respect to the Series B
Exchangeable Preferred Stock, the period from, and including, the date such
Series B Exchangeable Preferred Stock is first issued by the Corporation to, but
not including, the first Dividend Payment Date following such issuance and
thereafter, each period from, and including, the preceding Dividend Payment Date
to, but not including the next Dividend Payment Date.
"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 GAAP consistently applied, except
that with respect to the Corporation, each of the foregoing items shall be
determined on a consolidated basis with respect to the Corporation and its
Restricted Subsidiaries only.
"Excess Restricted Investment" means, with respect to any
particular Unrestricted Subsidiary or Affiliate of the Corporation 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: (i) the aggregate amount of any
Restricted Investments (other than the Initial Investment) made by the
Corporation 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 the
Corporation 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 the Corporation 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.
"Exchange Date" has the meaning set forth in Section 5(b)
below.
"Exchange Debentures" means the Corporation's 13% Series A
Senior Subordinated Exchange Debentures due 2009 and the Corporation's 13%
Series B Senior Subordinated Exchange Debentures due 2009, both issuable in
exchange for the Corporation's Exchangeable Preferred Stock.
"Exchange Indenture" means that certain indenture under which
the Exchange Debentures would be issued and which shall be substantially in the
form attached as Annex A hereto.
"Exchange Offer" means the Exchange Offer as defined in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Holder" means the Person in whose name Exchangeable Preferred
Stock is registered on the Transfer Agent's books.
"Indebtedness" means (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 GAAP, 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
the Corporation, 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 the Corporation or a Restricted Subsidiary that first results in
such Person becoming an Unrestricted Subsidiary or Affiliate of the Corporation,
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.
"Initial Issue Date" means the date that shares of
Exchangeable Preferred Stock are first issued by the Corporation.
"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.
"Junior Securities" means the Common Stock and any other class
or series of stock of the Corporation ranking junior to the Exchangeable
Preferred Stock in respect of the right to receive dividends and in respect of
the right to participate in any distribution upon liquidation, dissolution or
winding up of the affairs of the Corporation.
"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Corporation, its Restricted Subsidiaries) divided by (ii) the Annualized Pro
Forma EBITDA of such Person.
"Liquidated Damages" has the meaning assigned to it in the
Registration Rights Agreement.
"Liquidation Preference" means $100.00 per share of
Exchangeable Preferred Stock.
"Mandatory Redemption Date" has the meaning set forth in
Section 4(a) below.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any
Assistant Secretary of the Corporation.
"Officers' Certificate" means a certificate signed on behalf
of the Corporation by two officers of the Corporation, one of whom must be the
Chief Executive Officer, the Chief Financial Officer, the Treasurer or the
principal accounting officer of the Corporation that meets the requirements of
Section 10 hereof.
"Olympus" means Olympus Communications, L.P., a Delaware
limited partnership.
"Parity Securities" means the Convertible Preferred Stock and
any other class or series of stock of the Corporation authorized after the
Initial Issue Date that is entitled to receive payment of dividends and to
receive distributions upon liquidation, dissolution or winding up of the affairs
of the Corporation on a parity with the Exchangeable Preferred Stock.
"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 the Corporation 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 the Corporation and its
Restricted Subsidiaries under Section 8(a); provided further that no Restricted
Investments may be made under (ii), (iii), (iv) or (v) unless pro forma for such
Restricted Investment the Corporation could incur $1 of debt under the first
paragraph of Section 8(b).
"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 the Corporation, the average
life and the date such Indebtedness is scheduled to mature is not shortened and
(iii) in the case of Indebtedness of the Corporation, the new Indebtedness shall
not be senior in right of payment to the Indebtedness that is being extended,
renewed, substituted, refinanced or replaced.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"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
GAAP 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 the Corporation, all of the foregoing references to "Subsidiary" or
"Subsidiaries" shall be deemed to refer only to a "Restricted Subsidiary" or
"Restricted Subsidiaries" of the Corporation.
"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 the Corporation 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 the Corporation to effect a Change of Control
(which period shall be extended so long as the rating of the Exchangeable
Preferred Stock is under publicly announced consideration for possible downgrade
by Moody's or Standard & Poor's Corporation): (a) in the event the Exchangeable
Preferred Stock is rated by either Moody's or Standard & Poor's on the Rating
Date as investment grade Preferred Stock, the rating of the Exchangeable
Preferred Stock by both Moody's and Standard & Poor's shall be below investment
grade Preferred Stock; or (b) in the event the Exchangeable Preferred Stock is
rated below investment grade Preferred Stock by both Moody's and Standard &
Poor's on the Rating Date, the rating of the Exchangeable Preferred Stock by
either Moody's or Standard & Poor's shall be decreased by one or more gradations
(including gradations within rating categories as well as between rating
categories).
"Record Date" has the meaning set forth in Section 2(a) below.
"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 July 15, 2009.
"Redemption Date" has the meaning set forth in Section 4(e)
below.
"Registration Rights Agreement" means the Exchangeable
Preferred Stock Registration Rights Agreement, dated as of July 7, 1997, by and
among the Corporation, the Initial Purchasers (as defined in such Registration
Rights Agreement) and Highland Holdings, which shall be substantially in the
form attached hereto as Annex B.
"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 the
Corporation.
"Restricted Payment" means (i) any dividend or distribution
(whether made in cash, property or securities), on or with respect to any Junior
Securities of the Corporation, or (ii) any redemption, repurchase, retirement or
other direct or indirect acquisition of (a) Junior Securities, or (b) any
warrants, rights or options to directly or indirectly purchase or acquire any
such Junior Securities or any securities exchangeable for or convertible into
any such Junior Securities, other than options issued or shares purchased or
granted under the Corporation's Stock Option Plan of 1986 or the Corporation's
Restricted Stock Bonus Plan, from any employee of the Corporation 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 the Corporation, except
for the purchase, redemption, retirement or other acquisition of any shares of
its Junior Securities by exchange for, or out of the proceeds of the
substantially concurrent sale of, other shares of its Junior Securities other
than any Junior Securities which, by their terms (or by the terms of any
security into which they are convertible or for which they are 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 July 15, 2009.
"Restricted Subsidiary" means (a) any Subsidiary of the
Corporation, whether existing on or after the date of this Certificate of
Designations, 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 the Corporation and (b) an Unrestricted Subsidiary which
is reclassified as a Restricted Subsidiary by a resolution adopted by the Board
of Directors of the Corporation, 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 this Certificate of Designations.
"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 the
Corporation's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Securities" means any class or series of stock of the
Corporation authorized after the Initial Issue Date ranking senior to the
Exchangeable Preferred Stock in respect of the right to receive dividends and in
respect of the right to participate in any distribution upon liquidation,
dissolution or winding up of the affairs of the Corporation.
"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 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 GAAP such entity is consolidated with the first-named Person for financial
statement purposes.
"Transfer Agent" means American Stock Transfer and Trust Co.
or any other entity designated from time to time by the Corporation to act as
the registrar and transfer agent for the Exchangeable Preferred Stock.
"Transfer Restricted Security" has the meaning set forth in
the Registration Rights Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary, (b) any Subsidiary of the Corporation which is
classified after the date of this Certificate of Designations as an Unrestricted
Subsidiary by a resolution adopted by the Board of Directors of the Corporation
and (c) any subsidiary which as of the date of this Certificate of Designations
has been declared an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors of the Corporation (such Unrestricted Subsidiaries being
Hyperion Telecommunications, Inc., Global Cablevision, Inc., Orchard Park
Cablevision, Inc. and Global Acquisition Partners, L.P. on the date hereof);
provided that a Subsidiary organized or acquired after the date of this
Certificate of Designations may be so classified as an Unrestricted Subsidiary
only if immediately after the date of such classification, any investment by the
Corporation and its Restricted Subsidiaries in any such Subsidiary made at the
time of the organization or acquisition of such Subsidiary would be a Restricted
Investment permissible under this Certificate of Designations. The Transfer
Agent shall be given prompt notice by the Corporation of each resolution adopted
by its Board of Directors under this provision, together with a copy of each
such resolution adopted.
"Voting Rights Triggering Event" has the meaning set forth in
Section 6(b) below.
"Voting Stock" means with respect to any specified Person,
Capital Stock with voting power, under ordinary circumstances and without regard
to the occurrence of any contingency, to elect the directors or other managers
or trustees of such Person.
2. Dividends.
(a) The Holders of the Exchangeable Preferred Stock will be
entitled to receive, when, as and if dividends are declared by the Board of
Directors out of funds of the Corporation legally available therefor, cumulative
preferential dividends from the issue date of the applicable series of
Exchangeable Preferred Stock accruing at the rate per share of $13.00 per annum,
payable semi-annually in arrears on January 15 and July 15 in each year or, if
any such date is not a Business Day, on the next succeeding Business Day (each,
a "Dividend Payment Date"), to the Holders of record as of the next preceding
January 1 and July 1 (each, a "Record Date"). Dividends will be payable in cash.
The first dividend payment will be payable on January 15, 1998. Dividends
payable on the Exchangeable Preferred Stock will be computed on the basis of a
360-day year of twelve 30-day months and will be deemed to accrue on a daily
basis.
(b) Dividends on the Exchangeable Preferred Stock will accrue
whether or not the Corporation has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether or not
dividends are declared. Dividends will accumulate to the extent they are not
paid on the Dividend Payment Date for the period to which they relate.
Accumulated unpaid dividends will bear interest at the rate of 13% per annum.
The Corporation will take all actions required or permitted under Delaware law
(including, but not limited to, conducting a fair market appraisal of its
assets) to permit the payment of dividends on the Exchangeable Preferred Stock.
(c) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding
Exchangeable Preferred Stock with respect to any dividend period unless all
dividends for all preceding dividend periods have been declared and paid upon,
or declared and a sufficient sum set apart for the payment of such dividends
upon, all outstanding shares of Exchangeable Preferred Stock. If dividends on
the Exchangeable Preferred Stock with respect to any dividend period are not
paid in full, the Exchangeable Preferred Stock will share any partial dividends
paid on Parity Securities on a pro rata basis. Unless full cumulative dividends
on all outstanding shares of Exchangeable Preferred Stock due for all past
dividend periods shall have been declared and paid, or declared and a sufficient
sum for the payment thereof set apart, then: (i) no dividend (other than a
dividend payable solely in shares of Junior Securities) shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (ii) no other distribution shall be declared or made upon, or
any sum set apart for the payment of any distribution upon, any shares of Junior
Securities; (iii) no shares of Junior Securities shall be purchased, redeemed or
otherwise acquired or retired for value (excluding an exchange for shares of
other Junior Securities) by the Corporation or any of its Subsidiaries; and (iv)
no monies shall be paid into or set apart or made available for a sinking or
other like fund for the purchase, redemption or other acquisition or retirement
for value of any shares of Junior Securities by the Corporation or any of its
Subsidiaries. Holders of the Exchangeable Preferred Stock will not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
full cumulative dividends as herein described.
3. Distributions Upon Liquidation, Dissolution or
Winding Up.
Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, each Holder of the Exchangeable
Preferred Stock will be entitled to payment out of the assets of the Corporation
available for distribution of an amount equal to the Liquidation Preference per
share of Exchangeable Preferred Stock held by such Holder, plus accrued and
unpaid dividends and Liquidated Damages, if any, to the date fixed for
liquidation, dissolution, or winding up, before any distribution is made on any
Junior Securities, including, without limitation, any Common Equity of the
Corporation. If, upon any voluntary or involuntary liquidation, dissolution of
winding-up of the Corporation, the amounts payable with respect to the
Exchangeable Preferred Stock and all other Parity Securities are not paid in
full, the holders of the Exchangeable Preferred Stock and all Parity Securities
will share equally and ratably in any distribution of assets of the Corporation.
After payment in full of the Liquidation Preference and all accrued dividends
and Liquidated Damages, if any, to which Holders of Exchangeable Preferred Stock
are entitled, such Holders will not be entitled to any further participation in
any distribution of assets of the Corporation. However, neither the voluntary
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets of
the Corporation nor the consolidation or merger of the Corporation with or into
one or more corporations will be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, unless such sale,
conveyance, exchange or transfer shall be in connection with a liquidation,
dissolution or winding up of the business of the Corporation.
4. Redemption by the Corporation.
(a) On July 15, 2009 (the "Mandatory Redemption Date"), the
Corporation shall redeem (subject to the legal availability of funds therefor)
all outstanding shares of Exchangeable Preferred Stock at a price in cash equal
to the Liquidation Preference thereof, plus accrued and unpaid dividends and
Liquidated Damages, if any, to the date of redemption.
(b) Except as set forth in paragraph (c) below, the
Exchangeable Preferred Stock may not be redeemed at the option of the
Corporation on or prior to July 15, 2002. The Exchangeable Preferred Stock may
be redeemed, in whole or in part, at the option of the Corporation on or after
July 15, 2002 at the Applicable Redemption Price.
(c) In addition, prior to July 15, 2000 the Corporation may,
at its option, redeem up to 33% of the aggregate of (i) the Liquidation
Preference of the Exchangeable Preferred Stock issued less the Liquidation
Preference of Exchangeable Preferred Stock exchanged for Exchange Debentures and
(ii) the principal amount of Exchange Debentures issued, with the net proceeds
of one or more common equity offerings received on or after the date of original
issuance of the Exchangeable Preferred Stock at a redemption price of 113% of
the Liquidation Preference or principal amount, as the case may be, plus
accumulated and unpaid dividends and Liquidated Damages, if any, in the case of
Exchangeable Preferred Stock and accrued and unpaid interest and Liquidated
Damages, if any, in the case of Exchange Debentures; provided, that after any
such redemption, at least 67% of the aggregate of (i) the Liquidation Preference
of the Exchangeable Preferred Stock issued less the Liquidation Preference of
Exchangeable Preferred Stock exchanged for Exchange Debentures and (ii) the
principal amount of Exchange Debentures issued remain outstanding; and provided
further, that any such redemption shall occur within 75 days of the date of
closing of such offerings of common equity of the Corporation.
(d) In case of redemption of less than all of the shares of
Exchangeable Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Corporation in its
sole discretion.
(e) Notice of any redemption shall be sent by or on behalf of
the Corporation not more than 60 days nor less than 30 days prior to the date
specified for redemption in such notice (including the Mandatory Redemption
Date, the "Redemption Date"), by first class mail, postage prepaid, to all
Holders of record of the Exchangeable Preferred Stock at their respective last
addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of Exchangeable Preferred Stock except as to the Holder to whom
the Corporation has failed to give notice or except as to the Holder to whom
notice was defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Exchangeable Preferred Stock may be
listed or admitted to trading, such notice shall state: (i) whether such
redemption is being made pursuant to the optional or the mandatory redemption
provisions hereof; (ii) the Redemption Date; (iii) the Applicable Redemption
Price; (iv) the number of shares of Exchangeable Preferred to be redeemed and,
if less than all shares held by such Holder are to be redeemed, the number of
such shares to be redeemed; (v) the place or places where certificates for such
shares are to be surrendered for payment of the Applicable Redemption Price,
including any procedures applicable to redemptions to be accomplished through
book-entry transfers; and (vi) that dividends on the shares to be redeemed will
cease to accrue on the Redemption Date. Upon the mailing of any such notice of
redemption, the Corporation shall become obligated to redeem at the time of
redemption specified therein all shares called for redemption.
(f) If notice has been mailed in accordance with Section 4(e)
above and, provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds in trust for the pro rata
benefit of the Holders of the shares so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the Redemption Date,
dividends on the shares of the Exchangeable Preferred Stock so called for
redemption shall cease to accrue, and said shares shall no longer be deemed to
be outstanding and shall not have the status of shares of Exchangeable Preferred
Stock, and all rights of the Holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the Applicable Redemption
Price) shall cease. Upon surrender, in accordance with said notice, of the
certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the Applicable Redemption
Price. In case fewer than all the shares represented by any such certificate are
redeemed, a new certificate or certificates shall be issued representing the
unredeemed shares without cost to the Holder thereof.
(g) Any funds deposited with a bank or trust company for the
purpose of redeeming Exchangeable Preferred Stock shall be irrevocable except
that:
(i) the Corporation shall be entitled to receive from
such bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the Holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(ii) any balance of monies so deposited by the
Corporation and unclaimed by the Holders of the Exchangeable Preferred
Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any interest
or other earnings earned thereon, to the Corporation, and after any
such repayment, the Holders of the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for
payment without interest or other earnings.
(h) No Exchangeable Preferred Stock may be redeemed except
with funds legally available for the purpose. The Corporation will take all
actions required or permitted under Delaware law (including, but not limited to,
conducting a fair market appraisal of its assets) to permit the redemption of
the Exchangeable Preferred Stock.
(i) Notwithstanding the foregoing provisions of this Section
4, unless the full cumulative dividends on all outstanding shares of
Exchangeable Preferred Stock shall have been paid or contemporaneously are
declared and paid for all past dividend periods, none of the shares of
Exchangeable Preferred Stock shall be redeemed unless all outstanding shares of
Exchangeable Preferred Stock are simultaneously redeemed.
(j) All shares of Exchangeable Preferred Stock redeemed
pursuant to this Section 4 shall be restored to the status of authorized and
unissued shares of Preferred Stock, without designation as to series and may
thereafter be reissued as shares of any series of preferred stock but not as
shares of Exchangeable Preferred Stock.
5. Exchange.
(a) The Corporation may, at its option on any Dividend Payment
Date, exchange, in whole or in part, on a pro rata basis, the then-outstanding
shares of Exchangeable Preferred Stock for Exchange Debentures; provided that
immediately after giving effect to any partial exchange, there shall be
outstanding Exchangeable Preferred Stock with an aggregate Liquidation
Preference of not less than $75.0 million and not less than $75.0 million in
aggregate principal amount of Exchange Debentures; and, provided further, that
(i) on the date of such exchange there are no accumulated and unpaid dividends
or Liquidated Damages on the Exchangeable Preferred Stock (including the
dividend payable on such date) or other contractual impediments to such
exchange; (ii) immediately after giving effect to such exchange, no Default or
Event of Default (each as defined in the Exchange Indenture) would exist under
the Exchange Indenture, or any other material instrument governing Indebtedness
outstanding at the time of such exchange; (iii) the Exchange Indenture has been
qualified under the Trust Indenture Act, if such qualification is required at
the time of exchange; and (iv) the Corporation shall have delivered a written
opinion to the trustee under the Exchange Indenture to the effect that all
conditions to be satisfied prior to such exchange have been satisfied.
(b) The Exchange Debentures shall be issuable in all
appropriate denominations. Notice of the intention to exchange will be sent by
or on behalf of the Corporation not more than 60 days nor less than 30 days
prior to the date fixed for exchange (the "Exchange Date"), by first class mail,
postage prepaid, to each Holder of record of Exchangeable Preferred Stock at its
registered address; provided, however, that no failure to give such notice or
any defect therein or in the mailing thereof shall affect the validity of the
proceedings for the exchange of any shares of Exchangeable Preferred Stock
except as to the Holder to whom the Corporation has failed to give notice or
except as to the Holder to whom notice was defective. In addition to any
information required by law or by the applicable rules of any exchange upon
which Exchangeable Preferred Stock may be listed or admitted to trading, such
notice will state: (i) the Exchange Date; (ii) the place or places where
certificates for such shares are to be surrendered for exchange, including any
procedures applicable to exchanges to be accomplished through book-entry
transfers; and (iii) that dividends and Liquidated Damages on the Exchangeable
Preferred Stock to be exchanged will cease to accrue on the Exchange Date. Prior
to giving the notice of intention to exchange, the Corporation shall execute and
deliver with a bank or trust company, with capital, surplus and undivided
profits of not less than $100,000,000, selected by the Corporation, and qualify
under the Trust Indenture Act, the Exchange Indenture with such changes as would
not adversely affect any of the voting powers, preferences and relative,
participating, optional and other special rights of any holders of Exchangeable
Preferred Stock as may be required by law or usage.
(c) A Holder delivering Exchangeable Preferred Stock for
exchange will not be required to pay any taxes or duties in respect of the issue
or delivery of Exchange Debentures on exchange but will be required to pay any
tax or duty that may be payable in respect of any transfer involved in the issue
or delivery of the Exchange Debentures in a name other than that of the Holder
of the Exchangeable Preferred Stock. Certificates representing Exchange
Debentures will not be issued or delivered unless all taxes and duties, if any,
payable by the Holder have been paid.
(d) If notice of any exchange has been properly given, and if
on or before the Exchange Date the Exchange Debentures have been duly executed
and authenticated and an amount in cash equal to all accrued and unpaid
dividends thereon to the Exchange Date has been deposited with the Transfer
Agent, then on or after the close of business on the Exchange Date, Exchangeable
Preferred to be exchanged will no longer be deemed to be outstanding and may
thereafter be issued in the same manner as the other authorized but unissued
preferred stock, but not as Exchangeable Preferred Stock, and all rights of the
Holders thereof as stockholders of the Corporation will cease, except the right
of the Holders to receive upon surrender of their certificates the Exchange
Debentures and all accrued and unpaid dividends and Liquidated Damages, if any,
thereon to the Exchange Date.
(e) As a condition to the exercise of the exchange rights
described in this Section 5, the Corporation shall deliver an opinion to the
Trustee as to the due authorization, execution, delivery and enforceability of
both the Exchange Debentures and the Exchange Indenture.
6. Voting Rights.
(a) The Holders of record of shares of Exchangeable Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 6 or as otherwise provided by law.
(b) If and upon:
(i) the accumulation of accrued and unpaid dividends
on the outstanding Exchangeable Preferred Stock in an amount equal to
three (3) full semi-annual dividends (whether or not consecutive);
(ii) the failure of the Corporation to satisfy any
mandatory redemption or repurchase obligation (including, without
limitation, pursuant to any required Change of Control Offer) with
respect to the Exchangeable Preferred Stock;
(iii) the failure of the Corporation to make a Change
of Control Offer on the terms and in accordance with the provisions
described below in Section 7 hereof;
(iv) the failure of the Corporation to comply with
any of the other covenants or agreements set forth in this Certificate
of Designations and the continuance of such failure for 60 consecutive
days or more after written notice by the Transfer Agent or Holders of
25% or more of the aggregate Liquidation Preference of the Exchangeable
Preferred Stock; or
(v) the failure of the Corporation to pay when due
principal, interest or premium aggregating $10,000,000 or more with
respect to any Indebtedness of the Corporation or any Restricted
Subsidiary in the principal amount of $100,000,000 or more 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 by the Transfer Agent or Holders
of 25% or more of the aggregate Liquidation Preference of the
Exchangeable Preferred Stock (each of the events described in clauses
6(b)(i) through (v) being referred to herein as a "Voting Rights
Triggering Event").
then the authorized number of members of the Corporation's Board of Directors
will be immediately and automatically increased by two, and the Holders of a
majority of the outstanding shares of Exchangeable Preferred Stock, voting as a
separate class, shall be entitled to elect two directors of the Corporation.
(c) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the Holders of
Exchangeable Preferred Stock, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent of the Holders of
Exchangeable Preferred Stock. Such right of the Holders of Exchangeable
Preferred Stock to elect directors may be exercised until (i) all dividends in
arrears shall have been paid in full and (ii) all other Voting Rights Triggering
Events have been cured or waived, at which time the right of the Holders of
Exchangeable Preferred Stock to elect such number of directors shall cease, the
term of such directors previously elected shall thereupon terminate, and the
authorized number of directors of the Corporation shall thereupon return to the
number of authorized directors otherwise in effect, but subject always to the
same provisions for the renewal and divestment of such special voting rights in
the case of any such future Voting Rights Triggering Event.
(d) At any time when such voting right shall have vested in
the Holders of Exchangeable Preferred Stock and if such right shall not already
have been initially exercised, a proper officer of the Corporation shall, upon
the written request of Holders of record of 10% or more of the shares of
Exchangeable Preferred Stock then outstanding, addressed to the Secretary of the
Corporation, call a special meeting of Holders of Exchangeable Preferred Stock.
Such meeting shall be held at the earliest practicable date upon the notice
required for annual meetings of stockholders at the place for holding annual
meetings of stockholders of the Corporation or, if none, at a place designated
by the Secretary of the Corporation. If such meeting shall not be called by the
proper officers of the Corporation within 30 days after the personal service of
such written request upon the Secretary of the Corporation, or within 30 days
after mailing the same within the United States, by registered mail, addressed
to the Secretary of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
Holders of record of 10% of the shares of Exchangeable Preferred Stock then
outstanding may designate in writing a Holder of Exchangeable Preferred Stock to
call such meeting at the expense of the Corporation, and such meeting may be
called by such person so designated upon the notice required for annual meetings
of stockholders and shall be held at the place for holding annual meetings of
the Corporation or, if none, at a place designated by such Holder. Any Holder of
Exchangeable Preferred Stock that would be entitled to vote at such meeting
shall have access to the stock books of the Corporation for the purpose of
causing a meeting of stockholders to be called pursuant to the provisions of
this Section. Notwithstanding the provisions of this paragraph, however, no such
special meeting shall be called if any such request is received less than 90
days before the date fixed for the next ensuing annual or special meeting of
stockholders.
(e) If a director so elected by the Holders of Exchangeable
Preferred Stock shall cease to serve as a director before his term shall expire,
the Holders of Exchangeable Preferred Stock then outstanding may, at a special
meeting of the Holders called as provided above, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
(f) Subject to the provisions in Section 6(h) below, the
Corporation shall not, without the affirmative vote or consent of the Holders of
a majority of the then outstanding shares of Exchangeable Preferred Stock (with
shares held by the Corporation not being considered to be outstanding for this
purpose) amend or otherwise alter its Certificate of Incorporation (including
this Certificate of Designations) in any manner that adversely affects the
rights of Holders of Exchangeable Preferred Stock.
(g) Without the consent of each Holder affected, an amendment
or waiver may not (with respect to any shares of Exchangeable Preferred Stock
held by a non-consenting Holder):
(i) alter the voting rights with respect to the
Exchangeable Preferred Stock or reduce the number of shares of
Exchangeable Preferred Stock whose Holders must consent to an
amendment, supplement or waiver;
(ii) reduce the Liquidation Preference of or change
the Mandatory Redemption Date of any share of Exchangeable Preferred
Stock or alter the provisions with respect to the redemption of the
Exchangeable Preferred Stock;
(iii) reduce the rate of or change the time for
payment of dividends on any share of Exchangeable Preferred Stock;
(iv) waive a default or event of default in the
payment of dividends on the Exchangeable Preferred Stock;
(v) make any share of Exchangeable Preferred
Stock payable in any form other than that stated in this Certificate of
Designations;
(vi) make any change in the provisions of this
Certificate of Designations relating to waivers of the rights of
Holders of Exchangeable Preferred Stock to receive the Liquidation
Preference or dividends on the Exchangeable Preferred Stock;
(vii) waive a redemption payment with respect to
any share of Exchangeable Preferred Stock; or
(viii) make any change in the foregoing amendment
and waiver provisions.
(h) The Corporation may not, without the consent of the
Holders of at least a majority of the then outstanding shares of Exchangeable
Preferred Stock, authorize, create (by way of reclassification or otherwise) or
issue any class or series of Parity Securities (other than Convertible Preferred
Stock) or any obligation or security convertible or exchangeable into or
evidencing a right to purchase, shares of any class or series of Parity
Securities (provided, that no such consent with respect to the issuance of
Parity Securities shall be required unless such Parity Securities mature or have
a mandatory redemption date prior to July 15, 2009) and the Corporation may not,
without the consent of the Holders of at least two-thirds of the then
outstanding shares of Exchangeable Preferred Stock, authorize, create (by way of
reclassification or otherwise) or issue any class or series of Senior Securities
or any obligation or security convertible or exchangeable into or evidencing a
right to purchase, shares of any class or series of Senior Securities.
(i) The Corporation in its sole discretion may without the
vote or consent of any Holders of the Exchangeable Preferred Stock amend this
Certificate of Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) to provide for uncertificated Exchangeable
Preferred Stock in addition to or in place of certificated Exchangeable
Preferred Stock;
(iii) to make any change that would provide any
additional rights or benefits to the Holders of the Exchangeable
Preferred Stock or that does not materially and adversely affect the
legal rights or benefits under this Certificate of Designations of any
such Holder;
(iv) in the event, and to the extent, that the
Exchange Offer is not permissible under applicable law or SEC policy,
to redesignate the unissued shares of Series B Exchangeable Preferred
Stock as any series of preferred stock other than Exchangeable
Preferred Stock; or
(v) upon consummation of the Exchange Offer, to
redesignate any shares of Series A Exchangeable Preferred Stock
acquired by the Corporation in the Exchange Offer as any series of
preferred stock other than Exchangeable Preferred Stock.
7. Change of Control Offer.
(a) Within 50 days of (i) the proposed occurrence of a Change
of Control or (ii) the occurrence of a Change of Control Triggering Event, the
Corporation shall notify the Holders 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 shares of Exchangeable Preferred Stock at a purchase
price equal to 100% of the aggregate Liquidation Preference thereof plus any
accrued and unpaid dividends and Liquidated Damages 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 Section 7.
(b) Within 50 days of (i) the proposed occurrence of a Change
of Control or (ii) the occurrence of a Change of Control Triggering Event, the
Corporation 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 each Holder, at his address appearing in the register of the Exchangeable
Preferred Stock maintained by the registrar, a notice stating:
(i) that the Change of Control Offer is being made
pursuant to this covenant and that all Exchangeable Preferred Stock
tendered will be accepted for payment, provide that a Change of Control
Triggering Event has occurred and otherwise subject to the terms and
conditions set forth herein;
(ii) 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");
(iii) that any Exchangeable Preferred Stock not
tendered will continue to accrue dividends;
(iv) that, unless the Corporation defaults in the
payment of the Change of Control Purchase Price, any Exchangeable
Preferred Stock accepted for payment pursuant to the Change of Control
Offer shall cease to accrue dividends after the Change of Control
Payment Date;
(v) that Holders accepting the offer to have their
Exchangeable Preferred Stock purchased pursuant to a Change of Control
Offer will be required to surrender the Exchangeable Preferred Stock 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;
(vi) 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 Liquidation Preference of the
Exchangeable Preferred Stock delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Exchangeable
Preferred Stock purchased;
(vii) that Holders whose Exchangeable Preferred Stock
is being purchased only in part will be issued new Exchangeable
Preferred Stock certificates equal in Liquidation Preference to the
unpurchased portion of the Exchangeable Preferred Stock surrendered;
and
(viii) 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 Section 7, in the
case of a notice of a Change of Control Offer that is being furnished by the
Corporation with respect to a proposed Change of Control that has not yet
actually occurred, the Corporation may specify in such notice that Holders of
the Exchangeable Preferred Stock shall be required to notify the Corporation, by
a date not earlier 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 Exchangeable Preferred Stock for payment pursuant to the
Change of Control Offer and to notify the Corporation of the Liquidation
Preference of such Exchangeable Preferred Stock to be so tendered (with the
failure of any holder to so notify the Corporation within such 30-day period to
be deemed an election of such Holder not to accept such Change of Control
Offer). In such event, the Corporation shall have the option, to be exercised by
a subsequent 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, the Corporation shall
(a) accept for payment Exchangeable Preferred Stock 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 Exchangeable Preferred Stock or
portions thereof so tendered and (c) deliver or cause to be delivered to the
Transfer Agent Exchangeable Preferred Stock so accepted together with an
Officers' Certificate stating the Exchangeable Preferred Stock or portions
thereof tendered to the Corporation. The paying agent shall promptly mail to
each holder of Exchangeable Preferred Stock so accepted payment in an amount
equal to the purchase price for such Exchangeable Preferred Stock, and the
Transfer Agent shall promptly authenticate and mail to such holder new
Exchangeable Preferred Stock certificates equal in Liquidation Preference to any
unpurchased portion of the Exchangeable Preferred Stock surrendered.
There shall be no purchase of any Exchangeable Preferred Stock
pursuant to this covenant if there has occurred (prior to, on or after, as the
case may be, the tender of such Exchangeable Preferred Stock pursuant to the
Change of Control Offer, by the Holders of such Exchangeable Preferred Stock)
and is continuing a Voting Rights Triggering Event. The paying agent will
promptly return to the respective Holders thereof any Exchangeable Preferred
Stock (a) the tender of which has been withdrawn in compliance with this
certificate or (b) held by it during the continuance of a Voting Rights
Triggering Event (other than any such event arising from a default in the
payment of the Change of Control Purchase Price with respect to such
Exchangeable Preferred Stock).
In the event that the Corporation is required to make a Change
of Control Offer, the Corporation will comply with all applicable tender offer
rules including Rule 14e-1 under the Exchange Act, to the extent applicable.
8. Certain Covenants.
(a) Restricted Payments. So long as any of the shares of
Exchangeable Preferred Stock remain outstanding, the Corporation shall not make,
and shall not permit any Restricted Subsidiary to make, any Restricted Payment
if (a) at the time of such proposed Restricted Payment, a Voting Rights
Triggering Event 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 the Corporation'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 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.
(b) Limitation on Indebtedness. The Corporation shall not, and
shall 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 Exchange Debentures
issued under the Exchange Indenture) unless, after giving effect to such
incurrence on a pro forma basis, Indebtedness of the Corporation 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, this provision will not limit the
incurrence of Indebtedness which is incurred by the Corporation or its
Restricted Subsidiaries for working capital purposes or capital expenditures
with respect to plant, property and equipment of the Corporation and its
Restricted Subsidiaries in an aggregate amount not to exceed $50,000,000.
Further, this provision will not limit Permitted Refinancing Indebtedness,
subject to the provisions of Section 8(a).
(c) Merger and Consolidation. The Corporation 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) the Corporation
shall be the continuing Person, or the Person (if other than the Corporation)
formed by such consolidation or into which the Corporation is merged or to which
the properties and assets of the Corporation 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 the Exchangeable Preferred Stock
shall be converted into or exchanged for and shall become shares of such
successor, transferee or resulting Person, having in respect of such successor,
transferee or resulting Person the same powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereon, that the Exchangeable Preferred Stock had
immediately prior to such transaction; (ii) immediately before and immediately
after giving effect to such transaction, no Voting Rights Triggering Event 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 the Corporation 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 the
Corporation for the most recent quarter preceding such transaction set forth in
Column B or the ratio set forth in Column C below:
A B C
1.1111:1 to 1.4999:1 90% 1.00:1
--------------------------------------
1.5 and higher 80% 1.35:1
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, the Corporation shall deliver, or cause to be
delivered, to the Transfer Agent, in form and substance reasonably satisfactory
to the Transfer Agent, an Officers' Certificate and an opinion of counsel, each
stating that such consolidation, merger or transfer comply with this provision
and that all conditions precedent herein provided for relating to such
transaction or transactions have been complied with.
(d) Transactions with Affiliates. The Corporation shall not,
and shall 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 the Corporation or a Restricted Subsidiary in a comparable
arm's-length transaction with a person which is not an affiliate. The
Corporation 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
the Corporation 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 the Corporation or any of its Restricted
Subsidiaries, so long as the Board of Directors of the Corporation 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 the Corporation 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 Transfer Agent.
Notwithstanding the foregoing, nothing prohibits any such transaction which is
determined by the independent members of the Board of Directors of the
Corporation, in their reasonable, good faith judgment (as evidenced by a Board
Resolution filed with the Transfer Agent) to be (a) in the best interests of the
Corporation or such Restricted Subsidiary, and (b) upon terms which would be
obtainable by the Corporation or a Restricted Subsidiary in a comparable
arm's-length transaction with a Person which is not an Affiliate.
(e) Limitation on Investment in Affiliates and Unrestricted
Subsidiaries. After the date of this Certificate of Designations, the
Corporation may not, nor will the Corporation 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 the
Corporation does not exceed 7.75:1.
(f) Reports to Holders. The Corporation will send to the
Transfer Agent and Holders, within 15 days after the filing thereof with the
SEC, copies of its annual reports on Form 10-K, its Quarterly Reports on Form
10-Q and its Current Reports on Form 8-K; provided, however, that
notwithstanding any event which results in the Corporation being relieved of its
obligation to file information, document and reports with the SEC pursuant to
Sections 13 or 15(d) of the Exchange Act, the Corporation shall nevertheless
continue, so long as any Exchangeable Preferred Stock remains outstanding and
unpaid, (i) to file with the SEC (at such time as it would be required to file
such reports under the Exchange Act), and to send to the Transfer Agent and
Holders (within 15 days thereafter), quarterly and annual reports and
information, documents and other reports substantially equivalent to those it
would have been obligated to file if it had remained subject to such sections of
the Exchange Act, and (ii) so long as the Exchangeable Preferred Stock has not
been registered pursuant to the Registration Rights Agreement, upon the request
of a Holder, to provide information required to be delivered under Rule
144A(d)(4) under the Securities Act to such Holder and its prospective
purchasers designated by such Holder.
(g) Conflicts with By-laws. If any provisions of the
Corporation's By-laws conflict in any way with this Certificate of Designations,
the Corporation shall, so long as any of the shares of Exchangeable Preferred
Stock are outstanding, take all necessary actions to amend such By-laws and
thereby resolve the conflict.
(h) Compliance Certificate. The Corporation shall deliver to
the Transfer Agent 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
Officers' Certificate stating whether or not the signers know of any Voting
Rights Triggering Event. If they do know of such a Voting Rights Triggering
Event, the certificate shall describe such Voting Rights Triggering Event and
the efforts to remedy or obtain a waiver of the same. The certificate must
comply with Section 10 hereof.
9. Payment.
(a) All amounts payable with respect to the Exchangeable
Preferred Stock shall be payable in United States dollars at the office or
agency of the Corporation maintained for such purpose within the City and State
of New York or, at the option of the Corporation, payment of dividends may be
made by check mailed to the Holders of the Exchangeable Preferred Stock at their
respective addresses set forth in the register of Holders of Exchangeable
Preferred Stock maintained by the Transfer Agent, provided that all payments
with respect to the Global Shares (as defined below in Section 14) and shares of
Exchangeable Preferred Stock the Holders of which hold at least 10 shares and
have given wire transfer instructions to the Corporation will be required to be
made by wire transfer of immediately available funds to the accounts specified
by the Holders thereof. Unless otherwise designated by the Corporation, the
Corporation's office or agency in New York shall be the office of the paying
agent maintained for such purpose.
(b) Any payment on the Exchangeable Preferred Stock due on any
day that is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such due date.
(c) The Corporation has initially appointed the Transfer Agent
to act as the paying agent. The Corporation may at any time terminate the
appointment of any paying agent and appoint additional or other paying agents,
provided that until the Exchangeable Preferred Stock has been delivered to the
Corporation for cancellation, or moneys sufficient to pay the Liquidation
Preference and accrued dividends and Liquidated Damages on the Exchangeable
Preferred Stock have been made available for payment and either paid or returned
to the Corporation as provided in this Certificate of Designations, it shall
maintain an office or agency in the Borough of Manhattan, The City of New York
for surrender of Exchangeable Preferred Stock.
(d) Dividends payable on the Exchangeable Preferred Stock on
any redemption date or repurchase date that is a Dividend Payment Date will be
paid to the Holders of record as of the immediately preceding Record Date.
(e) All moneys deposited with any paying agent or then held by
the Corporation in trust for the payment of the Liquidation Preference and
dividends and Liquidated Damages on any shares of Exchangeable Preferred Stock
which remain unclaimed at the end of two years after such payment has become due
and payable will be repaid to the Corporation, and the Holder of such shares of
Exchangeable Preferred Stock will thereafter look only to Corporation for
payment thereof.
10. Officers' Certificate.
Each Officers' Certificate provided for in this Certificate of
Designations shall include:
(a) a statement that the officer making such certificate
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
(c) a statement that, in the opinion of such officer, he or
she has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of
such officer, such condition or covenant has been satisfied.
11. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of
Exchangeable Preferred Stock shall not have any voting powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate of Designations (as such Certificate
of Designations may be amended from time to time) and in the Certificate of
Incorporation. The shares of Exchangeable Preferred Stock shall have no
preemptive or subscription rights.
12. Headings of Subdivisions.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
13. Severability of Provisions.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Exchangeable Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Exchangeable Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Exchangeable Preferred Stock
and qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Exchangeable Preferred Stock
and qualifications, limitations and restrictions thereof herein set forth shall
be deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Exchangeable Preferred Stock
and qualifications, limitations and restrictions thereof unless so expressed
herein.
14. Form of Securities.
(a) The Exchangeable Preferred Stock shall initially be issued
in the form of one or more Global Preferred Shares (the "Global Shares"), unless
a holder requests initial issuance and delivery of Certificated Securities as
described in Section 14(d) below. The Global Shares shall be deposited on the
Initial Issue Date with, or on behalf of, The Depository Trust Company (the
"Depository") and registered in the name of Cede & Co., as nominee of the
Depository (such nominee being referred to as the "Global Share Holder").
(b) So long as the Global Share Holder is the registered owner
of any Exchangeable Preferred Stock, the Global Share Holder will be considered
the sole Holder under this Certificate of Designations of any shares of
Exchangeable Preferred Stock evidenced by the Global Shares. Beneficial owners
of shares of Exchangeable Preferred Stock evidenced by the Global Shares shall
not be considered the owners or Holders thereof under this Certificate of
Designations for any purpose. The Corporation shall not have any responsibility
or liability for any aspect of the records of the Depository relating to the
Exchangeable Preferred Stock.
(c) Payments in respect of the Liquidation Preference,
dividends on any Exchangeable Preferred Stock registered in the name of the
Global Share Holder on the applicable record date shall be payable by the
Corporation to or at the direction of the Global Share Holder in its capacity as
the registered Holder under this Certificate of Designations. The Corporation
may treat the persons in whose names shares of Exchangeable Preferred Stock,
including the Global Shares, are registered as the owners thereof for the
purpose of receiving such payments. The Corporation does not have nor will it
have any responsibility or liability for the payments of such amounts to
beneficial holders of Exchangeable Preferred Stock.
(d) Any person having a beneficial interest in a Global Share
may, upon request to the Corporation, exchange such beneficial interest for
Exchangeable Preferred Stock in the form of registered definitive certificates
("Certificated Securities"). Upon any such issuance, the Corporation shall
register such Certificated Securities in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof). If (i) the
Corporation notifies the Holders in writing that the Depository is no longer
willing or able to act as a depository and the Corporation is unable to locate a
qualified successor within 90 days or (ii) the Corporation, at its option,
notifies the Holders in writing that it elects to cause the issuance of
Exchangeable Preferred Stock in the form of Certificated Securities, then, upon
surrender by the Global Share Holder of its Global Shares, Exchangeable
Preferred Stock in such form will be issued to each person that the Global Share
Holder and the Depository identify as being the beneficial owner of the related
Exchangeable Preferred Stock.
15. Legends.
(a) Except as permitted by the following paragraphs (b) and
(c), each share certificate evidencing the Global Shares and Certificated
Securities (and all securities issued in exchange therefor or substitution
thereof) shall bear legends in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (4) TO
INSTITUTIONAL ACCREDITED INVESTORS IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS
(b) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by the Global
Shares) pursuant to Rule 144 under the Securities Act ("Rule 144") or pursuant
to an effective registration statement under the Securities Act:
(i) in the case of any Transfer Restricted Security
that is a Certificated Security, the registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Certificated Security that does not bear the legend set forth in (a)
above and rescind any restriction on the transfer of such Transfer
Restricted Security upon receipt of a certification from the
transferring Holder that such transfer is being made pursuant to Rule
144, and;
(ii) in the case of any Transfer Restricted Security
represented by the Global Shares, such Transfer Restricted Security
shall not be required to bear the legend set forth in (a) above;
provided, however, that with respect to any request for an exchange of
a Transfer Restricted Security that is represented by the Global Shares
for a Certificated Security that does not bear the legend set forth in
(a) above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the registrar that such request is
being made pursuant to Rule 144.
(c) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by the Global
Shares) in reliance on any exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to Rule 144A or Rule 144 under
the Securities Act) in which the Holder or the transferee provides an opinion of
counsel to the Corporation and the registrar in form and substance reasonably
acceptable to the Corporation and the registrar (which opinion of counsel shall
also state that the transfer restrictions contained in the legend are no longer
applicable):
(i) in the case of any Transfer Restricted Security
that is a Certificated Security, the registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Certificated Security that does not bear the legend set forth in (a)
above and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(ii) in the case of any Transfer Restricted Security
represented by the Global Shares, such Transfer Restricted Security
shall not be required to bear the legend set forth in (a) above.
(d) Notwithstanding the foregoing, upon consummation of the
Exchange Offer in accordance with the Registration Rights Agreement, the
Corporation shall issue Series B Exchangeable Preferred Stock in exchange for
Series A Exchangeable Preferred Stock accepted for exchange in the Exchange
Offer, which Series B Exchangeable Preferred Stock shall not bear the legend set
forth in (a) above, and the Transfer Agent shall rescind any restriction on the
transfer of such Series B Exchangeable Preferred Stock, in each case unless the
Holder of such Series A Exchangeable Preferred Stock is either (i) a
broker-dealer, (ii) a Person participating in the distribution of the Series A
Exchangeable Preferred Stock or (iii) a Person who is an affiliate (as defined
in Rule 144A) of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be duly executed by Timothy J. Rigas, Executive Vice President
and Chief Financial Officer, and attested by Colin Higgin, its Assistant
Secretary, this 2nd day of July, 1997.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President and Chief Financial Officer
ATTEST:
By: /s/ Colin Higgin
Colin Higgin
Assistant Secretary
<PAGE>
ANNEX A
EXCHANGE INDENTURE
<PAGE>
ANNEX B
REGISTRATION RIGHTS AGREEMENT
<PAGE>
Annex A
ADELPHIA COMMUNICATIONS CORPORATION
13% Senior Subordinated Exchange Debentures Due 2009
INDENTURE
Dated as of _________, ____
BANK OF MONTREAL TRUST COMPANY,
Trustee
<PAGE>
- vi -
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TIA Indenture
SectionSection
<C> <C>
310(a)(1).............................................................................................7.10
(a)(2).......................................................................................7.10
(a)(3).......................................................................................N.A.
(a)(4).......................................................................................N.A.
(b)...............................................................................7.08;7.10;12.02
(b)(1).......................................................................................7.10
(b)(9).......................................................................................7.10
(c)..........................................................................................N.A.
311(a) 7.11
(b)..........................................................................................7.11
(c)..........................................................................................N.A.
312(a) 2.05
(b).........................................................................................12.03
(c).........................................................................................12.03
313(a) 7.06
(b)(1).......................................................................................7.06
(b)(2).......................................................................................7.06
(c)...................................................................................7.06, 12.02
(d)..........................................................................................7.06
314(a) 4.02;12.02
(b)..........................................................................................N.A.
(c)(1)................................................................................12.04;12.05
(c)(2)................................................................................12.04;12.05
(c)(3).......................................................................................N.A.
(d)..........................................................................................N.A.
(e).........................................................................................12.05
(f)..........................................................................................N.A.
315(a) 7.01;7.02
(b)....................................................................................7.05;12.02
(c)..........................................................................................7.01
(d)................................................................................6.05;7.01;7.02
(e)..........................................................................................6.11
316(a) (last sentence)...............................................................................12.06
(a)(1)(A)....................................................................................6.05
(a)(1)(B)....................................................................................6.04
(a)(2).......................................................................................8.02
(b)..........................................................................................6.07
317(a)(1).............................................................................................6.08
(a)(2).......................................................................................6.09
(b)..........................................................................................2.04
318(a) 12.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C>
Section 1.01. Definitions.................................................................................1
Section 1.02. Other Definitions..........................................................................10
Section 1.03. Incorporation by Reference of Trust Indenture..............................................10
Section 1.04. Rules of Construction......................................................................11
Section 1.05. Acts of Holders............................................................................11
ARTICLE 2
THE EXCHANGE DEBENTURES
Section 2.01. Form And Dating............................................................................12
Section 2.02. Execution and Authentication...............................................................13
Section 2.03. Registrar and Paying Agent.................................................................13
Section 2.04. Paying Agent to Hold Money in Trust........................................................14
Section 2.05. Holder Lists...............................................................................14
Section 2.06. Transfer and Exchange......................................................................14
Section 2.07. Replacement Exchange Debentures............................................................21
Section 2.08. Outstanding Exchange Debentures............................................................21
Section 2.09. Treasury Exchange Debentures...............................................................21
Section 2.10. Temporary Exchange Debentures..............................................................21
Section 2.11. Cancellation...............................................................................22
Section 2.12. Defaulted Interest.........................................................................22
ARTICLE 3
CHANGE OF CONTROL OFFER
ARTICLE 4
COVENANTS
Section 4.01. Payment of Exchange Debentures.............................................................24
Section 4.02. SEC Reports................................................................................25
Section 4.03. Waiver of Stay, Extension or Usury Laws....................................................25
Section 4.04. Limitation on Transactions with Affiliates.................................................25
Section 4.05. Limitation on Indebtedness.................................................................26
Section 4.06. Limitation on Restricted Payments..........................................................26
Section 4.07. Reports to Holders.........................................................................26
Section 4.08. Notice of Defaults Or Events of Default....................................................27
Section 4.09. Compliance Certificates....................................................................27
Section 4.10. Covenant to Secure Exchange Debentures Equally.............................................27
Section 4.11. Limitation on Investment in Affiliates and Unrestricted Subsidiaries.......................27
Section 4.12. Limitation on Sale of Assets...............................................................27
Section 4.13. No Senior Subordinated Debt................................................................28
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations.................................................................28
Section 5.02. Successor Person Substituted...............................................................29
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................................................29
Section 6.02. Acceleration...............................................................................31
Section 6.03. Other Remedies.............................................................................31
Section 6.04. Waiver of Past Defaults and Events of Default..............................................31
Section 6.05. Control by Majority........................................................................32
Section 6.06. Limitation on Suits........................................................................32
Section 6.07. Rights of Holders to Receive Payment.......................................................32
Section 6.08. Collection Suit by Trustee.................................................................33
Section 6.09. Trustee May File Proofs of Claim...........................................................33
Section 6.10. Priorities.................................................................................33
Section 6.11. Undertaking for Costs......................................................................34
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..........................................................................34
Section 7.02. Rights of Trustee..........................................................................35
Section 7.03. Individual Rights of Trustee...............................................................36
Section 7.04. Trustee's Disclaimer.......................................................................36
Section 7.05. Notice of Defaults.........................................................................36
Section 7.06. Reports by Trustee to Holders..............................................................36
Section 7.07. Compensation and Indemnity.................................................................37
Section 7.08. Replacement of Trustee.....................................................................37
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion...................................38
Section 7.10. Eligibility; Disqualification..............................................................38
Section 7.11. Preferential Collection of Claims Against Company..........................................38
Section 7.12. Paying Agents..............................................................................38
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.................................................................39
Section 8.02. With Consent of Holders....................................................................40
Section 8.03. Compliance with Trust Indenture Act........................................................41
Section 8.04. Revocation and Effect of Consents..........................................................41
Section 8.05. Notation on or Exchange of Exchange Debentures.............................................41
Section 8.06. Trustee to Sign Amendments, etc............................................................42
ARTICLE 9
SATISFACTION AND DISCHARGE OF
INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture....................................................42
Section 9.02. Funds Deposited for Payment of Exchange Debentures.........................................43
Section 9.03. Moneys Held by Paying Agent................................................................43
Section 9.04. Moneys Held by Trustee.....................................................................43
Section 9.05. Reinstatement..............................................................................44
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE
Section 10.01. Applicability of Article; Company Option to Effect Defeasance..............................44
Section 10.02. Defeasance and Discharge...................................................................44
Section 10.03. Covenant Defeasance........................................................................45
Section 10.04. Conditions to Defeasance or Covenant Defeasance............................................45
Section 10.05. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions...................................................................46
Section 10.06 Reinstatement..............................................................................47
ARTICLE 11
SUBORDINATION
Section 11.01. Agreement to Subordinate...................................................................47
Section 11.02. Certain Definitions........................................................................47
Section 11.03. Liquidation; Dissolution; Bankruptcy.......................................................48
Section 11.04. Default on Designated Senior Debt..........................................................48
Section 11.05. Acceleration of Securities.................................................................49
Section 11.06. When Distribution Must Be Paid Over........................................................49
Section 11.07. Notice by Company..........................................................................50
Section 11.08. Subrogation................................................................................50
Section 11.09. Relative Rights............................................................................50
Section 11.10. Subordination May Not Be Impaired by Company...............................................51
Section 11.11. Distribution or Notice to Representatives..................................................51
Section 11.12. Rights of Trustee and Paying Agent.........................................................51
Section 11.13. Authorization to Effect Subordination......................................................51
Section 11.14. Amendments.................................................................................52
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...............................................................52
Section 12.02. Notices....................................................................................52
Section 12.03. Communications by Holders with Other Holders...............................................53
Section 12.04. Certificate and Opinion as to Conditions...................................................53
Section 12.05. Statements Required in Certificate and Opinion.............................................53
Section 12.06. When Treasury Exchange Debentures Disregarded..............................................54
Section 12.07. Rules by Trustee and Agents................................................................54
Section 12.08. Business Days; Legal Holidays..............................................................54
Section 12.09. Governing Law..............................................................................54
Section 12.10. No Adverse Interpretation of Other Agreements..............................................55
Section 12.11. No Recourse against Others.................................................................55
Section 12.12. Successors.................................................................................55
Section 12.13. Multiple Counterparts......................................................................55
Section 12.14. Table of Contents, Headings, etc...........................................................55
Section 12.15. Separability...............................................................................55
ARTICLE 13
REDEMPTION
Section 13.01. Notices to Trustee.........................................................................57
Section 13.02. Selection of Exchange Debentures to Be Redeemed............................................57
Section 13.03. Notice of Redemption.......................................................................57
Section 13.04. Effect of Notice of Redemption.............................................................58
Section 13.05. Deposit of Redemption Price................................................................58
Section 13.06. Exchange Debentures Redeemed in Part.......................................................59
Section 13.07. Optional Redemption........................................................................59
Section 13.08. Mandatory Redemption.......................................................................59
</TABLE>
<PAGE>
EXHIBITS
Exhibit A FORM OF EXCHANGE DEBENTURE
Exhibit B-1 FORM OF CERTIFICATE FOR EXCHANGE
Exhibit B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM GLOBAL EXCHANGE DEBENTURE TO DEFINITIVE EXCHANGE
DEBENTURE
Exhibit B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM DEFINITIVE EXCHANGE DEBENTURE TO GLOBAL EXCHANGE
DEBENTURE
<PAGE>
THIS INDENTURE, dated as of _______________, _____, is by and
between ADELPHIA COMMUNICATIONS CORPORATION, a Delaware corporation (the
"Company"), and BANK OF MONTREAL TRUST COMPANY, a trust company organized under
the laws of the State of New York (the "Trustee").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.05 hereof.
"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, the Company, (ii) which beneficially owns or holds 10% or
more of any class of the voting Capital Stock of the Company, or (iii) of which
10% or more of the voting Capital Stock is beneficially owned or held by the
Company, a Restricted Subsidiary or an Unrestricted Subsidiary of the Company.
Without a limitation, an Affiliate also includes any director or executive
officer of the Company. As used herein, "Affiliate" shall not include a
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent, co-registrar or
agent for service of notices and demands. See Section 2.03 hereof.
"Agent Members" means members of, or participants in, the
Depository.
"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
the Company.
"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 the Company only, the Company's
Aggregate Excess Restricted Investments for such fiscal quarter.
"Asset Sale" means the sale, transfer or other disposition
(other than to the Company 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 the Company 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 the Company or any Restricted Subsidiary.
"Applicable Procedures" means the procedures of the
Depository.
"Board of Directors" means the Board of Directors of the
Company or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect, and delivered to the Trustee.
"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
any 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 the Company from the
issue or sale (other than to a Subsidiary) by the Company of any class of its
Capital Stock on or after January 1, 1993 (including Capital Stock of the
Company issued after January 1, 1993 upon conversion of or in exchange for other
securities of the Company but excluding the 13% Series A Cumulative Exchangeable
Preferred Stock of the Company).
"Capitalized Lease Obligations" means Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"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 the
Company's Board of Directors and attaching to the then outstanding voting
Capital Stock of the Company 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 the Company's Board of Directors
and attaching to the then outstanding voting Capital Stock of the Company, or
(ii) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Company's Board of Directors (together
with any new directors whose election by the Company's Board of Directors or
whose nomination for election by the Company'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 the
Company'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.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means the successor and any other obligor on the
Exchange Debentures.
"Company Request" means any written request signed in the name
of the Company by the Chairman, the President or a Vice President of the Company
and attested to by a Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Company.
"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 GAAP. 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 GAAP consistently applied.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 77 Water Street, New York, New York 10005.
"Cumulative Credit" means the sum of (i) Capital Stock Sale
Proceeds plus (ii) cumulative EBITDA of the Company 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 the Company 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 GAAP.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Definitive Exchange Debentures" means Exchange Debentures
that are in the form of the Exchange Debentures attached hereto as Exhibit A,
that do not include the information called for by footnotes 1 and 2 thereof.
"Depository" means The Depository Trust Company and its
successors.
"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 GAAP consistently applied, except
that with respect to the Company, each of the foregoing items shall be
determined on a consolidated basis with respect to the Company and its
Restricted Subsidiaries only.
"Excess Restricted Investment" means, with respect to any
particular Unrestricted Subsidiary or Affiliate of the Company 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:
(i) the aggregate amount of any Restricted Investments
(other than the Initial Investment) made by the
Company 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 the
Company 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 the Company 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.
"Exchange Debentures" means the securities that are issued
under this Indenture, as amended or supplemented from time to time pursuant to
this Indenture.
"Exchange Offer" means the Exchange Offer as defined in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Global Exchange Debenture" means a permanent global exchange
debenture that contains the paragraph referred to in footnote 1 and the
additional schedule referred to in footnote 2 to the form of the Exchange
Debenture attached hereto as Exhibit A, and that is deposited with and
registered in the name of the Depository.
"Holder" or "Exchange Debentureholder" means the Person in
whose name an Exchange Debenture is registered on the Registrar's books.
"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 GAAP, 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 the Company, 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.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Initial Investment" means the Restricted Investment in a
Person made by the Company or a Restricted Subsidiary that first results in such
Person becoming an Unrestricted Subsidiary or Affiliate of the Company, 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 Payment Date" means the stated maturity of an
installment of interest on the Exchange Debentures.
"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 Subordinated Debt" means, with respect to
any Person, subordinated indebtedness of such Person which has been rated with
an investment grade rating by Moody's or Standard & Poor's Corporation.
"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Company, its Restricted Subsidiaries) divided by (ii) the Annualized Pro Forma
EBITDA of such Person.
"Lien" means with respect to any property or assets of the
Company (it being understood that for the purposes of this definition property
or assets of the Company do not include property or assets of any Subsidiary of
the Company) 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 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 the aggregate.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers. See Sections 12.04 and 12.05 hereof.
"Olympus" means Olympus Communications, L.P., a Delaware
limited partnership.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee. See Sections 12.04 and 12.05 hereof.
"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 the Company 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 the Company and its Restricted
Subsidiaries under Section 4.06; provided further that no Restricted Investments
may be made under (ii), (iii), (iv) or (v) unless pro forma for such Restricted
Investment the Company could incur $1 of debt under the first paragraph of
Section 4.05.
"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 the Company, the average
life and the date such Indebtedness is scheduled to mature is not shortened and
(iii) in the case of Indebtedness of the Company, the new Indebtedness shall not
be senior in right of payment to the Indebtedness that is being extended,
renewed, substituted, refinanced or replaced.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"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
GAAP 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 the Company, all of the foregoing references to "Subsidiary" or
"Subsidiaries" shall be deemed to refer only to a "Restricted Subsidiary" or
"Restricted Subsidiaries" of the Company.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"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 the Company 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 the Company to effect a Change of Control (which
period shall be extended so long as the rating of the Exchange Debentures is
under publicly announced consideration for possible downgrade by Moody's or
Standard & Poor's Corporation): (a) in the event the Exchange Debentures are
rated by either Moody's or Standard & Poor's on the Rating Date as Investment
Grade Subordinated Debt, the rating of the Exchange Debentures by both Moody's
and Standard & Poor's shall be below Investment Grade Subordinated Debt; in the
event the Exchange Debentures are rated below Investment Grade Subordinated Debt
by both Moody's and Standard & Poor's on the Rating Date, the rating of the
Exchange Debentures by either Moody's or Standard & 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
Exchange Debentures.
"Registration Rights Agreement" means the Exchangeable
Preferred Stock Registration Rights Agreement, dated as of July 7, 1997, by and
between the Company, Smith Barney Inc., Bear, Stearns & Co., Inc., NationsBanc
Capital Markets, Inc., TD Securities (USA) Inc. and Highland Holdings.
"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 the Company.
"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 the Company or Capital Stock of any Subsidiary which is
consolidated with the Company in accordance with GAAP consistently applied,
except for any dividend or distribution which is made solely to the Company or
another Subsidiary or dividends or distributions payable solely in shares of
Common Stock of the Company, or (ii) any redemption, repurchase, retirement or
other direct or indirect acquisition of (a) Indebtedness of the Company which is
pari passu with or subordinate in right of payment to the Exchange Debentures,
except by exchange for or out of the proceeds of the substantially concurrent
issuance of Permitted Refinancing Indebtedness or from proceeds of a sale of
Capital Stock by the Company, or (b) shares of Capital Stock of the Company or
any warrants, rights or options to directly or indirectly purchase or acquire
any such Capital Stock of the Company or any securities exchangeable for or
convertible into any such shares, other than options issued or shares purchased
or granted under the Company's Stock Option Plan of 1986 or the Company's
Restricted Stock Bonus Plan, from any employee of the Company 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 the Company, except for
the purchase, redemption, retirement or other acquisition of any shares of the
Company'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 July 15, 2009.
"Restricted Subsidiary" means (a) any Subsidiary of the
Company, whether existing on or after the date of this 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 the
Company and (b) an Unrestricted Subsidiary which is reclassified as a Restricted
Subsidiary by a resolution adopted by the Board of Directors of the Company,
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 this 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 the
Company's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"SEC" means the United States Securities and Exchange
Commission as constituted from time to time or any successor performing
substantially the same functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Exchange Debentures" and "Series B Exchange
Debentures" mean the Exchange Debentures as described and in the forms
contemplated herein, and as authenticated and issued under this Indenture.
"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 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 GAAP such entity is consolidated with the first-named Person for financial
statement purposes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
SS-SS- 77aaa-77bbbb) as in effect on the date of this Indenture (except as
provided in Section 8.03 hereof).
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Trust Officer" means any officer or assistant officer of the
Trustee.
"U.S. Government Obligations" means (a) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt; provided, that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or a specific payment of
principal or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary, (b) any Subsidiary of the Company which is classified
after the date of this Indenture as an Unrestricted Subsidiary by a resolution
adopted by the Board of Directors of the Company 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 the Company (such Unrestricted
Subsidiaries being Hyperion Telecommunications, Inc., Global Cablevision, Inc.,
Orchard Park Cablevision, Inc. and Global Acquisition Partners, L.P. on the date
hereof); provided that a Subsidiary organized or acquired after the date of this
Indenture may be so classified as an Unrestricted Subsidiary only if immediately
after the date of such classification, any investment by the Company and its
Restricted Subsidiaries in any such Subsidiary made at the time of the
organization or acquisition of such Subsidiary would be a Restricted Investment
permissible under this Indenture. The Trustee shall be given prompt notice by
the Company of each resolution adopted by its Board of Directors under this
provision, together with a copy of each such resolution adopted.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
The definitions of the following terms may be found in the
sections indicated as follows:
Term Defined in Section
<S> <C>
"Act".......................................................... 1.05
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"Bankruptcy Law"............................................... 6.01
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"Business Day"................................................. 12.08
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"Certificated Exchange Debentures"............................. 2.01
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"Change of Control Offer"...................................... 3.00
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"Change of Control Purchase Price"............................. 3.00
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"Covenant Defeasance".......................................... 10.03
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"Designated Senior Debt"....................................... 11.02
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"Custodian".................................................... 6.01
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"Defeasance"................................................... 10.02
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"DTC".......................................................... 2.03
----------------------------------------------------------------
"Event of Default"............................................. 6.01
----------------------------------------------------------------
"Legal Holiday"................................................ 12.08
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"Paying Agent"................................................. 2.03
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"Proposed Change of Control Response Date"..................... 3.00
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"Reclassification"............................................. 4.12
----------------------------------------------------------------
"Registrar".................................................... 2.03
----------------------------------------------------------------
"Representative"............................................... 11.02
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"Senior Debt".................................................. 11.02
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the SEC.
"indenture securities" means the Exchange Debentures.
"indenture debentureholder" means a Debentureholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" means the Company or any other obligor on the
indenture exchange securities.
All other terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings therein assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it
herein, whether defined expressly or by reference;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural,
and in the plural include the singular; and
(5) words used herein implying any gender shall
apply to every gender.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing an agent therefor shall be sufficient for any purpose of
this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Exchange Debentures shall be proved by
the register of Exchange Debentures maintained by the Registrar pursuant to
Section 2.03 hereof.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Exchange Debenture shall bind
every future Holder of the same Exchange Debenture and the Holder of every
Exchange Debenture issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Exchange Debenture.
ARTICLE 2
THE EXCHANGE DEBENTURES
Section 2.01. Form And Dating.
The Exchange Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A attached hereto.
The Exchange Debentures may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Exchange Debenture shall be dated the
date of its authentication. The Exchange Debentures shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Exchange Debentures
shall constitute, and are hereby expressly made, a part of this Indenture and
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(a) Global Exchange Debenture. Exchange Debentures shall be
issued initially in the form of the Global Exchange Debenture (provided, that
any Holder may request Definitive Exchange Debentures in accordance with Section
2.01(c)), which shall be deposited on behalf of the owners of beneficial
interests in the Exchange Debentures represented thereby with the Depository at
its New York office, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of the Global Exchange
Debenture may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depository or its nominee as hereinafter
provided.
The Global Exchange Debenture shall represent such of the
outstanding Exchange Debentures as shall be specified therein and shall provide
that it shall represent the aggregate amount of outstanding Exchange Debentures
from time to time endorsed thereon and that the aggregate amount of outstanding
Exchange Debentures represented thereby may from time to time be reduced or
increased, as appropriate, to reflect issuances, exchanges and redemptions. Any
endorsement of the Global Exchange Debenture to reflect the amount of any
increase or decrease in the amount of outstanding Exchange Debentures
represented thereby shall be made by the Trustee or the Exchange Debenture
Custodian (as hereinafter defined), at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
Except as set forth in Section 2.06 hereof, the Global
Exchange Debenture may be transferred, in whole and not in part, only to another
nominee of the Depository or to a successor of the Depository or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall
apply only to the Global Exchange Debenture deposited with or on behalf of the
Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver the Global Exchange
Debenture that (i) shall be registered in the name of the Depository or the
nominee of the Depository and (ii) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instructions or held by the Exchange
Debenture Custodian.
Agent Members shall have no rights either under this Indenture
with respect to any Global Exchange Debenture held on their behalf by the
Depository or by the Exchange Debenture Custodian or under such Global Exchange
Debenture, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Exchange Debenture for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices of such
Depository governing the exercise of the rights of an owner of a beneficial
interest in the Global Exchange Debenture.
(c) Definitive Exchange Debentures. Exchange Debentures issued
in certificated form shall be substantially in the form of Exhibit A attached
hereto (but without including the text referred to in footnotes 1 and 2
thereto). Except as provided in Section 2.06, owners of beneficial interests in
the Global Exchange Debenture will not be entitled to receive physical delivery
of certificated Securities.
Section 2.02. Execution and Authentication.
An Officer shall sign the Exchange Debentures for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Exchange Debentures and may be in facsimile form. If an Officer whose signature
is on an Exchange Debenture no longer holds that office at the time an Exchange
Debenture is authenticated, the Exchange Debenture shall nevertheless be valid.
An Exchange Debenture shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Exchange Debenture has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by an Officer, authenticate Series A Exchange Debentures for original issue up
to the aggregate principal amount stated in paragraph 4 of the Exchange
Debentures. The Trustee shall, upon a written order of the Company signed by an
Officer, authenticate Series B Exchange Debentures for original issue up to the
aggregate principal amount of Series A Exchange Debentures exchanged in the
Exchange Offer or otherwise exchanged for Series A Exchange Debentures pursuant
to the terms of the Registration Rights Agreement. The aggregate principal
amount of Exchange Debentures outstanding at any time may not exceed such
amounts except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Exchange Debentures. An authenticating agent may
authenticate Exchange Debentures whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Exchange
Debentures may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Exchange Debentures may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the
Exchange Debentures and of their transfer and exchange. The Company may appoint
one or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such.
The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Exchange Debenture.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent respect to the Global Exchange Debenture.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Exchange Debentures, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Exchange Debentures.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA SS- 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Exchange Debentures and the Company shall otherwise comply with TIA SS- 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Exchange Debenture. The
transfer and exchange of beneficial interests in the Global Exchange Debenture
shall be effected through the Depository, in accordance with this Indenture and
the procedures of the Depository therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Beneficial interests in the Global Exchange Debenture may be
transferred to Persons who take delivery thereof in the form of a beneficial
interest in the Global Exchange Debenture in accordance with the transfer
restrictions set forth in the legend in subsection (g) of this Section 2.06.
(b) Transfer and Exchange of Definitive Exchange
Debentures. When Definitive Exchange Debentures are presented by a Holder to
the Registrar with a request:
(x) to register the transfer of the Definitive
Exchange Debentures; or
(y) to exchange such Definitive Exchange
Debentures for an equal principal amount of
Definitive Exchange Debentures of other
authorized denominations, the Registrar
shall register the transfer or make the
exchange as requested if its requirements
for such transactions are met; provided,
however, that the Definitive Exchange
Debentures presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instruction of transfer in form
satisfactory to the Registrar duly executed
by such Holder or by his attorney, duly
authorized in writing; and
(ii) in the case of a Definitive Exchange
Debenture that is a Transfer Restricted
Security, such request shall be accompanied
by the following additional information and
documents, as applicable:
(A) if such Transfer Restricted Security
is being delivered to the Registrar
by a Holder for registration in the
name of such Holder, without
transfer, a certification to that
effect from such Holder (in
substantially the form of Exhibit
B-1 hereto);
(B) if such Transfer Restricted Security
is being transferred to a QIB in
accordance with Rule 144A under the
Securities Act or pursuant to an
exemption from registration in
accordance with Rule 144 under the
Securities Act or pursuant to an
effective registration statement
under the Securities Act, a
certification to that effect from
such Holder (in substantially the
form of Exhibit B-1 hereto); or
(C) if such Transfer Restricted Security
is being transferred in reliance on
another exemption from the
registration requirements of the
Securities Act, a certification to
that effect from such Holder (in
substantially the form of Exhibit
B-1 hereto) and an Opinion of
Counsel from such Holder or the
transferee reasonably acceptable to
the Company and to the Registrar to
the effect that such transfer is in
compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in the Global
Exchange Debenture for a Definitive Exchange Debenture.
(i) Any Person having a beneficial interest in
the Global Exchange Debenture may upon
request, subject to the Applicable
Procedures, exchange such beneficial
interest for a Definitive Exchange
Debenture. Upon receipt by the Trustee of
written instructions or such other form of
instructions as is customary for the
Depository, from the Depository or its
nominee on behalf of any Person having a
beneficial interest in the Global Exchange
Debenture, and, in the case of a Transfer
Restricted Security, the following
additional information and documents (all of
which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated
by the Depository as being the
beneficial owner, a certification to
that effect from such Person (in
substantially the form of Exhibit
B-2 hereto);
(B) if such beneficial interest is being
transferred to a QIB in accordance
with Rule 144A under the Securities
Act or pursuant to an exemption from
registration in accordance with Rule
144 under the Securities Act or
pursuant to an effective
registration statement under the
Securities Act, a certification to
that effect from the transferor (in
substantially the form of Exhibit
B-2 hereto); or
(C) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that
effect from the transferor (in substantially
the form of Exhibit B-2 hereto) and an
Opinion of Counsel from the transferee or
transferor reasonably acceptable to the
Company and to the Registrar to the effect
that such transfer is in compliance with the
Securities Act, the Company shall execute
and, the Trustee shall authenticate and
deliver to the transferee a Definitive
Exchange Debenture in the appropriate
principal amount.
(ii) Definitive Exchange Debentures issued in
exchange for a beneficial interest in the
Global Exchange Debenture pursuant to this
Section 2.06(c) shall be registered in such
names and in such authorized denominations
as the Depository, pursuant to instructions
from its direct or indirect participants or
otherwise, shall instruct the Trustee. The
Trustee shall deliver such Definitive
Exchange Debentures to the Persons in whose
names such Exchange Debentures are so
registered.
(d) Restrictions on Transfer and Exchange of Global Exchange
Debenture. Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), the Global
Exchange Debenture may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee to
a successor Depository or a nominee of such successor Depository.
(e) Transfer and Exchange of a Definitive Exchange Debenture
for a Beneficial Interest in the Global Exchange Debenture. A Definitive
Exchange Debenture may not be exchanged for a beneficial interest in the Global
Exchange Debenture except, subject to the Applicable Procedures, upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Exchange Debenture, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, and, in the case
of a Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile):
(i) if such beneficial interest is being
transferred to the Person designated by the
Depository as being the beneficial owner, a
certification to that effect from such
Person (in substantially the form of Exhibit
B-3 hereto);
(ii) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 under the Securities Act or
pursuant to an effective registration
statement under the Securities Act, a
certification to that effect from the
transferor (in substantially the form of
Exhibit B-3 hereto); or
(iii) if such beneficial interest is being
transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from the transferor (in
substantially the form of Exhibit B-3
hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act,
the Trustee shall cancel such Definitive Exchange Debenture in accordance with
Section 2.11 hereof and cause, or direct the Exchange Debenture Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Exchange Debenture Custodian, the aggregate
principal amount of Exchange Debentures represented by the Global Exchange
Debenture to be increased accordingly. If no part of the Global Exchange
Debenture is then outstanding, the Company shall execute and the Trustee shall
authenticate a new Global Exchange Debenture in the appropriate principal
amount.
(f) Authentication of Definitive Exchange Debentures in
Absence of Depository. If at any time:
(i) the Depository for the Exchange Debentures
notifies the Company that the Depository is
unwilling or unable to continue as
Depository for the Global Exchange Debenture
and a successor Depository for the Global
Exchange Debenture is not appointed by the
Company within 90 days after delivery of
such notice; or
(ii) the Company at its sole discretion, notifies
the Trustee in writing that it elects to
cause the issuance of Definitive Exchange
Debentures under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Exchange Debentures in an aggregate principal amount equal
to the principal amount of the Global Exchange Debenture in exchange for such
Global Exchange Debenture.
(g) Legends.
(i) Except as permitted by the following
paragraphs (ii) and (iii), each Exchange
Debenture certificate evidencing the Global
Exchange Debenture and Definitive Exchange
Debentures (and all Exchange Debentures
issued in exchange therefor or substitution
thereof) shall bear legends in substantially
the following form:
THE DEBENTURES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3)
PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (4) TO
INSTITUTIONAL ACCREDITED INVESTORS IN A
TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer
Restricted Security represented by the
Global Exchange Debenture) pursuant to Rule
144 under the Securities Act or pursuant to
an effective registration statement under
the Securities Act:
(A) in the case of any Transfer
Restricted Security that is a
Definitive Exchange Debenture, the
Registrar shall permit the Holder
thereof to exchange such Transfer
Restricted Security for a Definitive
Exchange Debenture that does not
bear the legend set forth in (i)
above and rescind any restriction on
the transfer of such Transfer
Restricted Security upon receipt of
a certification from the
transferring holder substantially in
the form of Exhibit B-1 hereto, and;
(B) in the case of any Transfer
Restricted Security represented by
the Global Exchange Debenture, such
Transfer Restricted Security shall
not be required to bear the legend
set forth in (i) above, but shall
continue to be subject to the
provisions of Section 2.06(a) and
(b) hereof; provided, however, that
with respect to any request for an
exchange of a Transfer Restricted
Security that is represented by the
Global Exchange Debenture for a
Definitive Exchange Debenture that
does not bear the legend set forth
in (i) above, which request is made
in reliance upon Rule 144, the
Holder thereof shall certify in
writing to the Registrar that such
request is being made pursuant to
Rule 144 (such certification to be
substantially in the form of Exhibit
B-2 hereto).
(iii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer
Restricted Security represented by the
Global Exchange Debenture) in reliance on
any exemption from the registration
requirements of the Securities Act (other
than exemptions pursuant to Rule 144A or
Rule 144 under the Securities Act) in which
the Holder or the transferee provides an
Opinion of Counsel to the Company and the
Registrar in form and substance reasonably
acceptable to the Company and the Registrar
(which Opinion of Counsel shall also state
that the transfer restrictions contained in
the legend are no longer applicable):
(A) in the case of any Transfer
Restricted Security that is a
Definitive Exchange Debenture, the
Registrar shall permit the Holder
thereof to exchange such Transfer
Restricted Security for a Definitive
Exchange Debenture that does not
bear the legend set forth in (i)
above and rescind any restriction on
the transfer of such Transfer
Restricted Security; and
(B) in the case of any Transfer
Restricted Security represented by
the Global Exchange Debenture, such
Transfer Restricted Security shall
not be required to bear the legend
set forth in (i) above, but shall
continue to be subject to the
provisions of Section 2.06(a) and
(b)
hereof.
(iv) Notwithstanding the foregoing, upon
consummation of the Exchange Offer in
accordance with the Registration Rights
Agreement, the Company shall issue and, upon
receipt of an authentication order in
accordance with Section 2.02 hereof, the
Trustee shall authenticate Series B Exchange
Debentures in exchange for Series A Exchange
Debentures accepted for exchange in the
Exchange Offer, which Series B Exchange
Debentures shall not bear the legend set
forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of
such Series B Exchange Debentures, in each
case unless the Holder of such Series A
Exchange Debentures is either (A) a
broker-dealer, (B) a Person participating in
the distribution of the Series A Exchange
Debentures or (C) a Person who is an
affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of the Global Exchange
Debenture. At such time as all beneficial interests in the Global Exchange
Debenture have been exchanged for Definitive Exchange Debentures, redeemed,
repurchased or cancelled, the Global Exchange Debenture shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in the Global
Exchange Debenture is exchanged for Definitive Exchange Debentures, redeemed,
repurchased or cancelled, the principal amount of Exchange Debentures
represented by the Global Exchange Debenture shall be reduced accordingly and an
endorsement shall be made on the Global Exchange Debenture, by the Trustee or
the Exchange Debenture Custodian, at the direction of the Trustee, to reflect
such reduction.
(i) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the
Trustee shall authenticate Definitive
Exchange Debentures and the Global Exchange
Debenture at the Registrar's request.
(ii) No service charge shall be made to a Holder
for any registration of transfer or
exchange, but the Company may require
payment of a sum sufficient to cover any
transfer tax or similar governmental charge
payable in connection therewith (other than
any such transfer taxes or similar
governmental charge payable upon exchange or
transfer pursuant to Sections 2.10 and 8.05
hereto).
(iii) All Definitive Exchange Debentures and the
Global Exchange Debenture issued upon any
registration of transfer or exchange of
Definitive Exchange Debentures or the Global
Exchange Debenture shall be the valid
obligations of the Company, evidencing the
same debt, and entitled to the same benefits
under this Indenture, as the Definitive
Exchange Debentures or the Global Exchange
Debenture surrendered upon such registration
of transfer or exchange.
(iv) Prior to due presentment for the
registration of a transfer of any Exchange
Debenture, the Trustee, any Agent and the
Company may deem and treat the Person in
whose name any Exchange Debenture is
registered as the absolute owner of such
Exchange Debenture for the purpose of
receiving payment of principal of and
interest on such Exchange Debentures, and
neither the Trustee, any Agent nor the
Company shall be affected by notice to the
contrary.
(v) The Trustee shall authenticate Definitive
Exchange Debentures and the Global Exchange
Debenture in accordance with the provisions
of Section 2.02 hereof.
(vi) Neither the Company nor the Registrar shall
be required (i) to issue or register the
transfer or exchange of Exchange Debentures
during a period beginning at the opening of
business on a Business Day fifteen (15)
Business Days before the day of any
selection of Exchange Debentures for
redemption under Section 13.02 hereof and
ending at the close of business on the day
of selection, or (ii) to register the
transfer of or exchange any Exchange
Debentures so selected for redemption, in
whole or in part, except the unredeemed
portion of any Exchange Debenture being
redeemed in part.
Section 2.07. Replacement Exchange Debentures.
If any mutilated Exchange Debenture is surrendered to the
Trustee, or the Company and the Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Exchange Debenture, the Company shall
issue and the Trustee shall authenticate a replacement if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if an Exchange
Debenture is replaced. The Company may charge for any expenses in replacing an
Exchange Debenture.
Every replacement Exchange Debenture is an additional
obligation of the Company and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Exchange Debentures duly
issued hereunder.
Section 2.08. Outstanding Exchange Debentures.
The Exchange Debentures outstanding at any time are all the
Exchange Debentures authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding. Except as set forth in Section 2.09 hereof, an Exchange
Debenture does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Exchange Debenture.
If an Exchange Debenture is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Exchange Debenture is held by a bona fide
purchaser.
If the principal amount of any Exchange Debenture is
considered paid under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Exchange Debentures payable on that date, then on and after
that date such Exchange Debentures shall be deemed to be no longer outstanding
and shall cease to accrue interest.
Section 2.09. Treasury Exchange Debentures.
In determining whether the Holders of the required principal
amount of Exchange Debentures have concurred in any direction, waiver or
consent, Exchange Debentures owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, shall be considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Exchange Debentures that
a Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Exchange Debentures.
Until definitive Exchange Debentures are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Exchange
Debentures upon a written order of the Company signed by an Officer. Temporary
Exchange Debentures shall be substantially in the form of definitive Exchange
Debentures but may have variations that the Company considers appropriate for
temporary Exchange Debentures and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Exchange Debentures in exchange for temporary
Exchange Debentures.
Holders of temporary Exchange Debentures shall be entitled to
all of the benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Exchange Debentures to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Exchange Debentures surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Exchange Debentures surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall dispose of cancelled Exchange Debentures
(subject to the record retention requirement of the Exchange Act in accordance
with its standard disposition policies in effect from time to time).
Certification of the destruction of all cancelled Exchange Debentures shall be
delivered to the Company. The Company may not issue new Exchange Debentures to
replace Exchange Debentures that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Exchange Debentures, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Exchange Debentures and in Section 4.01 hereof. The Company
shall notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Exchange Debenture and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
ARTICLE 3
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, the
Company 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 Exchange Debentures 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, the
Company 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 Exchange Debentures, at his address appearing
in the register of the Exchange Debentures maintained by the Registrar, a notice
stating:
(1) that the Change of Control Offer is being made
pursuant to this covenant and that all Exchange Debentures
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 Exchange Debenture not tendered
will continue to accrue interest;
(4) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, any Exchange
Debentures 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
Exchange Debentures purchased pursuant to a Change of Control
Offer will be required to surrender the Exchange Debentures 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 Exchange Debentures delivered for
purchase, and a statement that such holder is withdrawing his
election to have such Exchange Debentures purchased;
(7) that holders whose Exchange Debentures are being
purchased only in part will be issued new Exchange Debentures
equal in principal amount to the unpurchased portion of the
Exchange Debentures surrendered, provided that each Exchange
Debenture purchased and each such new Exchange Debenture
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 Article 3, in the
case of a notice of a Change of Control Offer that is being furnished by the
Company 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 Exchange
Debentures shall be required to notify the Company, by a date not earlier 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 Exchange
Debentures for payment pursuant to the Change of Control Offer and to notify the
Company of the principal amount of such Exchange Debentures to be so tendered
(with the failure of any holder to so notify the Company within such 30-day
period to be deemed an election of such holder not to accept such Change of
Control Offer). In such event, the Company shall have the option, to be
exercised by a subsequent 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, the Company shall (a)
accept for payment Exchange Debentures 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 Exchange Debentures or portions thereof so
tendered and (c) deliver or cause to be delivered to the Trustee Exchange
Debentures so accepted together with an Officers' Certificate stating the
Exchange Debentures or portions thereof tendered to the Company. The Paying
Agent shall promptly mail to each holder of Exchange Debentures so accepted
payment in an amount equal to the purchase price for such Exchange Debentures,
and the Trustee shall promptly authenticate and mail to such holder a new
Exchange Debenture equal in principal amount to any unpurchased portion of the
Exchange Debentures surrendered; provided that each such new Exchange Debenture
shall be issued in an original principal amount in denominations of $1,000 and
integral multiples thereof.
There shall be no purchase of any Exchange Debentures pursuant
to this covenant if there has occurred (prior to, on or after, as the case may
be, the tender of such Exchange Debentures pursuant to the Change of Control
Offer, by the holders of such Exchange Debentures) and is continuing an Event of
Default. The Paying Agent will promptly return to the respective holders thereof
any Exchange Debentures (a) the tender of which has been withdrawn in compliance
with this 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 Exchange Debentures).
In the event that the Company is required to make a Change of
Control Offer, the Company will comply with all applicable tender offer rules
including Rule 14e-1 under the Exchange Act, to the extent applicable.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Exchange Debentures.
The Company shall pay the principal of and all interest on the
Exchange Debentures on the dates and in the manner provided in the Exchange
Debentures and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay such installment.
The Company will pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law) and on overdue
interest, to the extent lawful, at the rate borne by the Exchange Debentures.
Section 4.02. SEC Reports.
The Company shall file with the Trustee, within 15 days after
it files with the SEC, copies of the annual reports and of the other
information, documents and reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe), if any, which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. The Company shall also comply with
the other provisions of TIA SS- 314(a).
Section 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead (as a defense or
otherwise) or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of and/or
interest on the Exchange Debentures as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 4.04. Limitation on Transactions with Affiliates.
The Company shall not, and shall 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 the Company or a Restricted
Subsidiary in a comparable arm's-length transaction with a Person which is not
an Affiliate. The Company shall not, and shall 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 the Company 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 the Company or any of its
Restricted Subsidiaries, so long as the Board of Directors of the Company 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 the Company 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, this provision shall not prohibit any such
transaction which is determined by the independent members of the Board of
Directors of the Company, in their reasonable, good faith judgment (as evidenced
by a Board Resolution filed with the Trustee) to be (a) in the best interests of
the Company or such Restricted Subsidiary, and (b) upon terms which would be
obtainable by the Company or a Restricted Subsidiary in a comparable
arm's-length transaction with a Person which is not an Affiliate.
Section 4.05. Limitation on Indebtedness.
The Company shall not, and shall 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 Exchange Debentures issued under this Indenture)
unless, after giving effect to such incurrence on a pro forma basis,
Indebtedness of the Company 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, this provision will not limit the
incurrence of Indebtedness which is incurred by the Company or its Restricted
Subsidiaries for working capital purposes or capital expenditures with respect
to plant, property and equipment of the Company and its Restricted Subsidiaries
in an aggregate amount not to exceed $50,000,000. Further, this provision will
not limit Permitted Refinancing Indebtedness, subject to the provisions of
Section 4.06.
Section 4.06. Limitation on Restricted Payments.
So long as any of the Exchange Debentures remain outstanding,
the Company shall not make, and shall not permit any Restricted Subsidiary to
make, any Restricted Payment if (a) at the time of such proposed Restricted
Payment, a Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence of such Restricted Payment, or (b) immediately
after giving effect to 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 the Company'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 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.
Section 4.07. Reports to Holders.
The Company will send to the Trustee and to Exchange
Debentureholders, within 15 days after the filing thereof with the SEC, copies
of its annual reports on Form 10-K, its Quarterly Reports on Form 10-Q and its
Current Reports on Form 8-K; provided, however, that notwithstanding any event
which results in the Company being relieved of its obligation to file
information, documents and reports with the SEC pursuant to Sections 13 or 15(d)
of the Exchange Act, the Company shall nevertheless continue, so long as any
Exchange Debenture remains outstanding and unpaid, (i) to file with the SEC (at
such time as it would be required to file such reports under the Exchange Act),
and to send to the Trustee and Exchange Debentureholders (within 15 days
thereafter), quarterly and annual reports and information, documents and other
reports substantially equivalent to those it would have been obligated to file
if it had remained subject to such sections of the Exchange Act, and (ii) so
long as the Exchange Debentures have not been registered pursuant to the
Registration Rights Agreement, upon the request of an Exchange Debentureholder,
to provide information required to be delivered under Rule 144A(d)(4) under the
Securities Act to such Exchange Debentureholder and its prospective purchasers
designated by such Exchange Debentureholder.
Section 4.08. Notice of Defaults Or Events of Default.
In the event that any Default or Event of Default shall occur
and be continuing, the Company will, within 10 days of the occurrence thereof,
give written notice of such Default or Event of Default to the Trustee.
Section 4.09. Compliance Certificates.
The Company shall 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 Officers' Certificate stating whether or
not the signers know of any Default or Event of Default. If they do know of such
a Default or Event of Default, the certificate shall describe such Default or
Event of Default and the efforts to remedy or obtain a waiver of the same. The
certificate must comply with Section 12.05 hereof.
Section 4.10. Covenant to Secure Exchange Debentures Equally.
Except for Liens created or assumed by the Company in
connection with the acquisition of real property or equipment to be used by the
Company in the operation of its business which do not secure Indebtedness in
excess of the purchase price of such real property or equipment, the Company
covenants that, if it shall create or assume any Lien upon any of its property
or assets, whether now owned or hereafter acquired, to secure Indebtedness that
is subordinate or junior in right of payment to any Senior Debt, it will make or
cause to be made effective provisions whereby the Exchange Debentures will be
secured by such Lien equally and ratably with such Indebtedness of the Company
secured by such Lien as long as any such other Indebtedness of the Company shall
be so secured. The restriction imposed by this Section 4.10 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 the Company.
Section 4.11. Limitation on Investment in Affiliates and Unrestricted
Subsidiaries.
After the date of this Indenture, the Company may not, nor
will the Company 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 the Company does not exceed 7.75:1.
Section 4.12. Limitation on Sale of Assets.
Neither the Company nor any Restricted Subsidiary of the
Company shall sell an asset (including Capital Stock of Restricted Subsidiaries)
or reclassify a Restricted Subsidiary existing on the date of this 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 the Company 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 the Company'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 the Company 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 the Company undertake an asset sale or Reclassification, if pro forma
for such an asset sale or Reclassification the Company and its Restricted
Subsidiaries would be the owners of fewer than 75% of the cable systems
(measured on the basis of basis subscribers as of February 22, 1994) owned by
the Company and its Restricted Subsidiaries as of February 22, 1994, provided
however, that the Company 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.
Section 4.13. No Senior Subordinated Debt
The Company shall not directly or indirectly create, incur,
issue, assume or become liable for, contingently or otherwise, any Indebtedness
that is subordinate or junior in right of payment to any Senior Debt and senior
in any respect in right of payment to the Exchange Debentures.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations.
The Company 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) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or to which the properties and assets of the Company 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 the Company under
the Exchange Debentures and this Indenture, and the obligations under this
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
the Company 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 the Company for the most recent quarter preceding such transaction set
forth in Column B below or the ratio set forth in Column C below:
A B C
1.1111:1 to 1.4999:1 90% 1.00:1
--------------------------------------
1.5 and higher 80% 1.35:1
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 Section 5.01, the Company 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 Section 5.01 and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01
above, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Exchange
Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of any
principal of any Exchange Debenture when the same becomes due
and payable at maturity, upon acceleration, redemption or
otherwise, whether or not such payment is prohibited by the
provisions of Article 11 hereof;
(2) the Company defaults in the payment of any
interest on any Exchange Debenture when the same becomes due
and payable and the default continues for a period of 30 days,
whether or not such payment is prohibited by the provisions of
Article 11 hereof;
(3) the Company defaults in the observance or
performance of any other covenant in the Exchange Debentures
or this Indenture for 60 days after written notice from the
Trustee or the Holders of not less than 25% in aggregate
principal amount of the Exchange Debentures then outstanding;
(4) the Company fails to pay when due principal,
interest or premium aggregating $10,000,000 or more with
respect to any Indebtedness of the Company 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 this Indenture;
(5) a court of competent jurisdiction enters a final
judgment or judgments for the payment of money in excess of
$10,000,000 against the Company or any Restricted Subsidiary
and such judgment remains undischarged for a period of 60
consecutive days during which a stay of enforcement of such
judgment shall not be in effect;
(6) the Company, or any Restricted Subsidiary with
liabilities of greater than $10,000,000 under GAAP as of the
date of the event described in this clause (6), pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property, or
(D) makes a general assignment for the
benefit of its creditors;
(7) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company, or
any Restricted Subsidiary with liabilities of greater
than $10,000,000 under GAAP as of the effective date
of such order or decree, in an involuntary case,
(B) appoints a Custodian of the Company, or
any Restricted Subsidiary with liabilities of greater
than $10,000,000 under GAAP as of the effective date
of such order or decree, or for all or substantially
all of its property, or
(C) orders the liquidation of the Company,
or any Restricted Subsidiary with liabilities of
greater than $10,000,000 under GAAP as of the
effective date of such order or decree, and the order
or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clauses (3) and (4) is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities notify the Company and the Trustee,
of the Default and the Company does not cure the Default within (a) 60 days
after receipt of such notice in the case of a Default under clause (3) and (b)
10 days after receipt of such notice in the case of a Default under clause (4).
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." If the Holders of at least 25% in principal
amount of the outstanding Exchange Debentures request the Trustee to give such
notice on their behalf, the Trustee shall do so.
Subject to Section 7.05 hereof, the Trustee may withhold
notice to the Holders of the Exchange Debentures of any default (except in
payment of principal or interest on the Exchange Debentures) if the Trustee
considers it to be in the best interest of the Holders of the Exchange
Debentures to do so.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default
resulting from certain events of bankruptcy, insolvency or reorganization)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of not less than 25% in aggregate principal amount of the Exchange Debentures
then outstanding may declare to be immediately due and payable the principal
amount of all the Exchange Debentures 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 such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of outstanding Exchange Debentures by written notice to the Trustee and the
Company may rescind and annul such acceleration and its consequences if all
existing Events of Default, other than the nonpayment of accelerated principal
or interest, have been cured or waived. In case an Event of Default specified in
Section 6.01(6) or (7) occurs, such amount with respect to all of the Exchange
Debentures shall be due and payable immediately without any declaration or other
act on the part of the Trustee or the Holders of the Exchange Debentures.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of and interest on the Exchange Debentures or to enforce
the performance of any provision of the Exchange Debentures or this Indenture
and may take any necessary action requested of it as Trustee to settle,
compromise, adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not
possess any of the Exchange Debentures or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Exchange Debentureholder
in exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of
a majority in principal amount of the Exchange Debentures then outstanding have
the right to waive any existing default or compliance with any provision of this
Indenture or the Exchange Debentures 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 this Indenture.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the Exchange
Debentures then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee by this Indenture. The Trustee, however, may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines may be unduly prejudicial to the rights of another
Exchange Debentureholder not taking part in such direction, and the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, determines that the action so directed may not
lawfully be taken or if the Trustee in good faith shall, by a Trust Officer,
determine that the proceedings so directed would involve it in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, an Exchange Debentureholder may
not institute any proceeding or pursue any remedy with respect to this Indenture
or the Exchange Debentures unless:
(1) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate
principal amount of the Exchange Debentures then outstanding
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity reasonably satisfactory to the Trustee against any
loss, liability or expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of
indemnity; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60 day
period by the Holders of a majority in aggregate principal
amount of the Exchange Debentures then outstanding.
An Exchange Debentureholder may not use this Indenture to
prejudice the rights of another Exchange Debentureholder or to obtain a
preference or priority over another Exchange Debentureholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of an Exchange Debenture to receive payment of principal of
and interest on the Exchange Debenture on or after the respective due dates
expressed in the Exchange Debenture, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or any other obligor on the Exchange Debentures for the whole amount
of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate then borne by the Exchange Debentures, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Exchange Debentureholders allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Exchange Debentures), its creditors or
its property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same after deduction of its charges and expenses to the extent
that any such charges and expenses are not paid out of the estate in any such
proceedings and any Custodian in any such judicial proceeding is hereby
authorized by each Exchange Debentureholder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Exchange Debentureholders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee or any predecessor trustee under Section 7.07 hereof.
To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee or any predecessor Trustee under Section 7.07
hereof out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other properties which
the Holders of the Exchange Debentures may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Exchange Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Exchange Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Exchange Debentureholder in any such proceedings.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
FIRST: to the Trustee or any predecessor trustee for amounts
due under Sections 6.09 and 7.07 hereof;
SECOND: to Exchange Debentureholders for amounts due and
unpaid on the Exchange Debentures for principal and interest as to each,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Exchange Debentures; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Exchange Debentureholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the Exchange Debentures then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the same circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
The Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05 hereof.
(4) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, paragraphs
(a), (b) and (c) of this Section 7.01 shall govern every provision of this
Indenture that in any way relates to the Trustee.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity reasonably satisfactory to it
against any loss, liability, expense or fee.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on any document reasonably
believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to the provisions of
Section 12.05 hereof. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on
such Certificate or Opinion.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably
believes to be authorized or within its rights or powers.
(5) The Trustee may consult with counsel, and the
advice or opinion of such counsel as to matters of law shall
be full and complete authorization and protection in respect
of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of
such counsel.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Exchange Debentures and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, shall
be subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Exchange Debentures, it shall not be
accountable for the Company's use of the proceeds from the sale of Exchange
Debentures and it shall not be responsible for any statement in the Exchange
Debentures other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Exchange Debentureholder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of the principal of or interest on any Exchange Debenture the Trustee
may withhold the notice if and so long as the board of directors of the Trustee,
the executive committee or any trust committee of such board and/or its Trust
Officers in good faith determine(s) that withholding the notice is in the
interests of the Exchange Debentureholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of any year, commencing the May 15
following the date of this Indenture, the Trustee shall mail to each Exchange
Debentureholder a brief report dated as of such May 15 that complies with TIA
SS- 313(a) (but if no event described in TIA SS- 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA SS- 313(b)(2).
Reports pursuant to this Section shall be transmitted by mail:
(1) to all registered Holders of Exchange Debentures,
as the names and addresses of such Holders appear on the
Registrar's books;
(2) to such Holders of Exchange Debentures as have,
within the two years preceding such transmission, filed their
names and addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to TIA SS-
313(b), to each Exchange Debentureholder whose name and
address is preserved at the time by the Trustee, as provided
in Section 2.05.
A copy of each report at the time of its mailing to Exchange
Debentureholders shall be filed with the SEC and each stock exchange on which
the Exchange Debentures are listed. The Company shall notify the Trustee when
the Exchange Debentures are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it in
connection with its duties under this Indenture, including the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss, liability or reasonable expense incurred by it in
connection with the performance of its duties under this Indenture including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder (including, without limitation, settlement costs). The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by the Trustee through its
negligence or bad faith. To secure the Company's payment obligations in Sections
6.09 and 7.07, the Trustee shall have a lien prior to the Exchange Debentures on
all money or property held or collected by the Trustee except such money or
property held in trust to pay principal of and interest on particular Exchange
Debentures.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. However, in the event that such
expenses of administration are disallowed by a final judgment of a court of
competent jurisdiction, the expenses thereby, and all other unreimbursed
expenses of the Trustee, shall constitute a general unsecured claim of the
Trustee against the estate.
For purposes of this Section 7.07, the term "Trustee" shall
include any trustee appointed pursuant to Article 10.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the outstanding Exchange Debentures
may remove the Trustee by notifying the removed Trustee and may appoint a
successor Trustee with the Company's written consent. Subject to the provisions
of Section 6.11, any Exchange Debentureholder who has been a bona fide holder of
Exchange Debentures for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee, and the appointment of a successor, if the Trustee
fails, after written notice therefor by such Holder, to comply with the
provisions of clause (i) of TIA 310(b). The Company may remove the Trustee at
its election if:
(1) the Trustee fails to comply with
Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property;
(4) the Trustee otherwise becomes incapable of
acting; or
(5) a successor corporation becomes successor
Trustee pursuant to Section 7.09 below.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Exchange Debentures may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Exchange
Debentureholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Exchange Debentureholder.
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA SS- 310(a)(1) and (2) in every respect. The Trustee shall
have a combined capital and surplus of at least $5,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA SS- 310(b), including the provision in SS- 310(b)(1).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA 311(a), excluding any
creditor relationship listed in TIA 311(b). A Trustee who has resigned or been
removed shall be subject to TIA 311(a) to the extent indicated therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to it and the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
7.12:
(A) that it will hold all sums held by it as agent
for the payment of principal of or interest on, the Exchange
Debentures (whether such sums have been paid to it by the
Company or by any obligor on the Exchange Debentures) in trust
for the benefit of Holders of the Exchange Debentures;
(B) that it will at any time during the continuance
of any Event of Default, upon written request from the Trustee,
deliver to the Trustee all sums so held in trust by it; and
(C) that it will give the Trustee written notice
within three (3) Business Days of any failure of the Company
(or by any obligor on the Exchange Debentures) in the payment
of any installment of the principal of or interest on, the
Exchange Debentures when the same shall be due and payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Exchange Debentures without notice to or consent of any
Exchange Debentureholder:
(1) to comply with Section 5.01 hereof;
(2) to convey, transfer, assign, mortgage or
pledge any property to the Trustee and otherwise to comply
with Section 4.10 hereof;
(3) to provide for uncertificated Exchange
Debentures in addition to or in place of certificated Exchange
Debentures; or
(4) to cure any ambiguity, defect or inconsistency,
or to make any other change that does not materially and
adversely affect the rights of any Exchange Debentureholder.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
its own rights, duties or immunities under this Indenture.
Section 8.02. With Consent of Holders.
Except as provided below in this Section 8.02, the Company and
the Trustee may modify or supplement this Indenture or the Exchange Debentures
with the written consent of the Holders of at least one-half in principal amount
of the outstanding Exchange Debentures without notice to any Exchange
Debentureholder. The Holders of a majority in aggregate principal amount of the
outstanding Exchange Debentures may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Exchange Debentures
without notice to any Exchange Debentureholder. Any amendment to the provisions
of Article 11 hereof including the related definitions will require the consent
of the holders of at least two-thirds in aggregate principal amount of the
Exchange Debentures then outstanding if such amendment would adversely affect
the rights of the Holders of Exchange Debentures. Subject to Section 8.04,
without the consent of each Exchange Debentureholder affected, however, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Exchange Debentures
whose Holders must consent to an amendment, supplement or
waiver to this Indenture or the Exchange Debentures;
(2) reduce the rate of or change the time for
payment of interest on any Exchange Debenture;
(3) reduce the principal of or change the stated
maturity of any Exchange Debenture or alter or waive any of
the provisions with respect to the redemption of the Exchange
Debentures;
(4) change the amount or time of any payment
required by the Exchange Debentures;
(5) waive a default in the payment of the
principal of, interest on, or redemption payment with respect
to any Exchange Debenture;
(6) make any Exchange Debenture payable in money
other than that stated in the Exchange Debenture or change the
place of payment from New York, New York; or
(7) make any changes in Sections 6.04, 6.07
hereof or this sentence of Section 8.02.
After an amendment, supplement or waiver under this Section
8.02 becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the Exchange
Debentureholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Exchange Debentures shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of an Exchange Debenture is a continuing
consent conclusive and binding upon such Holder and every subsequent Holder of
the same Exchange Debenture or portion thereof, and of any Exchange Debenture
issued upon the transfer thereof or in exchange therefor or in place thereof,
even if notation of the consent is not made on any such Exchange Debenture. Any
such Holder or subsequent Holder, however, may revoke the consent as to his
Exchange Debenture or portion of an Exchange Debenture, if the Trustee receives
the notice of revocation before the date the amendment, supplement, waiver or
other action becomes effective.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement, or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amendment, supplement, or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date unless the consent of the requisite number
of Holders has been obtained.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Exchange Debentureholder, unless it makes a
change described in any of clauses (1) through (7) of Section 8.02 hereof. In
that case the amendment, supplement, waiver or other action shall bind each
Holder of an Exchange Debenture who has consented to it and every subsequent
Holder of an Exchange Debenture or portion of an Exchange Debenture that
evidences the same debt as the consenting Holder's Exchange Debenture.
Section 8.05. Notation on or Exchange of Exchange Debentures.
If an amendment, supplement, or waiver changes the terms of an
Exchange Debenture, the Trustee may request the Holder of the Exchange Debenture
to deliver it to the Trustee. In such case, the Trustee shall place an
appropriate notation on the Exchange Debenture about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Exchange Debenture shall issue and
the Trustee shall authenticate a new security that reflects the changed terms.
Section 8.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article 8 if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver the Trustee shall be
entitled to receive and, subject to Section 7.01 hereof, shall be fully
protected in relying upon an Officers' Certificate and an Opinion of Counsel
stating that such amendment, supplement or waiver is authorized or permitted by
this Indenture. The Company may not sign an amendment or supplement until the
Board of Directors approves it.
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture.
If at any time
(a) either
(i) there shall have been cancelled by the
Trustee or delivered to the Trustee for cancellation
all Exchange Debentures theretofore authenticated and
delivered (other than any Exchange Debentures that
are asserted to have been destroyed, lost or stolen
and that shall have been replaced as provided in
Section 2.07 hereof, or paid, or Exchange Debentures
for whose payment money has theretofore been
deposited in trust with the Trustee); or
(ii) all such Exchange Debentures not
theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and
payable within one (1) year, and the Company has
deposited or caused to be deposited with the Trustee
as trust funds the entire amount sufficient to pay at
maturity the principal of and accrued interest on all
such Exchange Debentures not theretofore cancelled by
the Trustee or delivered to the Trustee for
cancellation; and
(b) the Company has paid or caused to be paid
all other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an
Officers' Certificate stating that all conditions precedent
provided for herein relating to the satisfaction and discharge
of this Indenture have been complied with; and
(d) the Company has delivered to the Trustee an
Opinion of Counsel stating that the documents and other items
that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture, and that, upon
the basis of a Company Request and the accompanying documents
and items specified in this Section 9.01, all conditions
precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with, then,
upon Company Request, this Indenture and the rights and
interests hereby created shall cease to be of further effect
(except as to any surviving rights of registration of transfer
or exchange of Exchange Debentures), and the Trustee, at the
cost and expense of the Company, shall, subject to Section
9.05 hereof, execute and deliver proper instruments
acknowledging satisfaction and discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 6.09, 7.07, 7.08, 9.04 and 9.05 shall survive until the Exchange
Debentures are no longer outstanding. Thereafter, the Company's obligations to
the Trustee under Sections 7.07, 9.04 and 9.05 hereof shall survive.
Section 9.02. Funds Deposited for Payment of Exchange Debentures.
All moneys deposited with the Trustee pursuant to Section 9.01
hereof shall be held in trust and shall be available for payment when the
Exchange Debentures become due and payable in accordance with their terms,
either directly or through any Paying Agent, to the Holders of the particular
Exchange Debentures for the payment of which such moneys have been deposited
with the Trustee.
Section 9.03. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent under the provisions of this
Indenture shall, upon demand of the Company, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 9.01 hereof, to the
Company, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
Section 9.04. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or
then held by the Company in trust for the payment of the principal of or
interest on any Exchange Debenture that are not applied but remain unclaimed by
the Holder of such Exchange Debenture for two (2) years after the date upon
which the principal of or interest on such Exchange Debenture shall have
respectively become due and payable shall be repaid to the Company upon Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Exchange Debenture entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or any such
Paying Agent, before being required to make any such repayment, may, at the
expense of the Company, either mail to each Exchange Debentureholder affected,
at the address shown in the register of the Exchange Debentures maintained by
the Registrar pursuant to Section 2.03 hereof, or cause to be published once a
week for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in the City
of New York, New York, a notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such mailing or publication, any unclaimed balance of such moneys then
remaining will be repaid to the Company. After payment to the Company, Exchange
Debentureholders entitled to the money must look only to the Company for payment
as general creditors unless applicable abandoned property law designates another
person.
Section 9.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 9.01 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Exchange Debentures shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 9
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 9.01; provided, however, that if the Company
has made any payment of principal of or interest on any Exchange Debentures
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Exchange Debentures to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE
Section 10.01. Applicability of Article; Company Option to Effect Defeasance
The Company may at its option by a Board Resolution at any
time, with respect to the Exchange Debentures elect to have Section 10.02 or
Section 10.03 hereof be applied to the outstanding Exchange Debentures upon
compliance with the conditions set forth below in this Article 10.
Section 10.02. Defeasance and Discharge.
Upon the Company's exercise of the option described in Section
10.01 above applicable to this Section with respect to the Exchange Debentures,
the Company shall be deemed to have been discharged from its obligations with
respect to the Exchange Debentures on the date the conditions set forth in
Section 10.04 below are satisfied (hereinafter, "Defeasance"). For this purpose,
such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Exchange Debentures and to
have satisfied all its other obligations under such Exchange Debentures and this
Indenture insofar as such Exchange Debentures are concerned (and the Trustee, at
the expense of the Company, shall, subject to Section 10.06 hereof, execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of outstanding Exchange Debentures to receive solely from the trust
funds described in Section 10.04 hereof and as more fully set forth in such
Section, payments in respect of the principal of and interest on such Exchange
Debentures when such payments are due, (B) the Company's obligations with
respect to such Exchange Debentures under Sections 2.03, 2.04, 2.05, 2.06, 2.07
and 2.08 hereof, (C) the rights, powers, trusts, duties, and immunities of the
Trustee hereunder (including claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof) and (D) this Article 10. Subject to compliance
with this Article 10, the Company may exercise its option under this Section
10.02 with respect to the Exchange Debentures notwithstanding the prior exercise
of its option under Section 10.03 below with respect to the Exchange Debentures.
Section 10.03. Covenant Defeasance.
Upon the Company's exercise of the option in Section 10.01
above applicable to this Section with respect to the Exchange Debentures, the
Company shall be released from its obligations under Article III, Sections 4.04,
4.05, 4.06, 4.10, 4.11, 4.12 and 4.13 and clause (iii) of Section 5.01 hereof
with respect to the outstanding Exchange Debentures on and after the date the
conditions set forth in Section 10.04 below are satisfied (hereinafter,
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section or
portion thereof, whether directly or indirectly by reason of any reference
elsewhere herein to any such specified Section or portion thereof or by reason
of any reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Exchange Debentures shall be unaffected thereby.
Section 10.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
Section 10.02 or Section 10.03 above to the outstanding Exchange Debentures:
(1) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who shall
agree to comply with the provisions of this Article 10
applicable to it) as funds in trust for the purpose of making
the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the
Exchange Debentures, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with
their terms will provide, not later than the due date of any
payment, money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of and
accrued interest on the outstanding Exchange Debentures at the
maturity date or on the applicable redemption date, as the
case may be, of such principal or interest;
(2) no Event of Default or Default with respect to
the Exchange Debentures shall have occurred and be continuing
on the date of such deposit, or shall have occurred and be
continuing at any time during the period ending on the 91st
day after the date of such deposit or, if longer, ending on
the day following the expiration of the longest preference
period under any Bankruptcy Law applicable to the Company in
respect of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration
of such period);
(3) such Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest for purposes
of the TIA with respect to any securities of the Company;
(4) such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute default
under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound;
(5) in the case of an election under Section 10.02
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that the Company has received from,
or there has been published by, the Internal Revenue Service a
ruling to the effect that, and such opinion shall confirm
that, the Holders of the outstanding Exchange Debentures or
persons in their positions will not recognize income, gain or
loss for Federal income tax purposes as a result of such
Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Defeasance had not occurred;
(6) in the case of an election under Section 10.03
hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Exchange Debentures will not recognize income,
gain or loss for Federal income tax purposes as a result of
such Covenant Defeasance and will be subject to Federal income
tax on the same amount, in the same manner and at the same
times as would have been the case if such Covenant Defeasance
had not occurred;
(7) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to
either the Defeasance under Section 10.02 above or the
Covenant Defeasance under Section 10.03 above (as the case may
be) have been complied with; and
(8) the Company shall have delivered to the Trustee
an Officers' Certificate stating its intention to effect a
Defeasance pursuant to the provisions of this Article 10 at
least sixty (60) days prior to such Defeasance.
Section 10.05. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 10.04 in
respect of the outstanding Exchange Debentures shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Exchange
Debentures and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee may determine, to the Holders of such Exchange
Debentures, of all sums due and to become due thereon in respect of principal
and accrued interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 10.04 above or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Exchange Debentures.
Anything in this Article 10 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 10.04 above which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Defeasance or Covenant
Defeasance.
Section 10.06 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 10.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Exchange
Debentures shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 10 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 10.01; provided, however, that if the Company has made any payment
of principal of or accrued interest on any Exchange Debentures because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Exchange Debentures to receive such payment from the
money or U.S. Governmental Obligations held by the Trustee or Paying Agent.
ARTICLE 11
SUBORDINATION
Section 11.01. Agreement to Subordinate.
The Company agrees, and each Exchange Debentureholder by
accepting an Exchange Debenture agrees, that the Indebtedness evidenced by the
Exchange Debenture is subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full of all Senior Debt
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Section 11.02. Certain Definitions.
As used in this Article 11, the following terms shall have the
following meanings:
"Designated Senior Debt" means any Senior Debt permitted
hereunder that has been designated by the Company as "Designated Senior Debt."
"Obligations" means any principal, interest, penalties, fees
(including, but not limited to, reasonable fees of counsel), indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any indebtedness.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"Senior Debt" means (a) any Indebtedness that is permitted
under this Indenture that is not by its terms pari passu with or subordinated to
the Exchange Debentures, (b) all Obligations of the Company with respect to the
foregoing clause (a) including post-petition interest and (c) all (including all
subsequent) renewals, extensions, amendments, refinancings, repurchases or
redemptions, modifications, replacements or refundings thereto (whether or not
coincident therewith) that are permitted pursuant to this Indenture.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall not
include (i) any Indebtedness of the Company to any of its Subsidiaries, (ii) any
Indebtedness incurred for the purchase of goods or materials or for services
obtained in the ordinary course of business (other than with the proceeds of
borrowings from banks or other financial institutions) or (iii) any Indebtedness
incurred in violation of this Indenture.
A distribution may consist of cash, securities or other
property, by set-off or otherwise.
Section 11.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, or in an assignment for the benefit of creditors or any marshaling of
the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to
receive payment in full of all Obligations due in respect of
such Senior Debt (including interest after the commencement of
any such proceeding at the rate specified in the applicable
Senior Debt, whether or not an allowable claim) before
Exchange Debentureholders shall be entitled to receive any
payment with respect to the Exchange Debentures (except that,
in either case, Exchange Debentureholders may receive (i)
securities that are subordinated at least to the same extent
as the Exchange Debentures to (a) Senior Debt and (b) any
securities issued in exchange for Senior Debt and (ii)
payments made from the trust described in the discharge and
defeasance provisions of Articles 9 and 10 hereunder); and
(2) until all Obligations with respect to Senior Debt
(as provided in subsection (1) above) are paid in full, any
distribution to which the Exchange Debentureholders would be
entitled but for this Article shall be made to holders of
Senior Debt (except that Exchange Debentureholders may receive
(i) securities that are subordinated at least to the same
extent as the Exchange Debentures to (a) Senior Debt and (b)
any securities issued in exchange for Senior Debt and (ii)
payments made from the trust described in the discharge and
defeasance provisions of Articles 9 and 10 hereunder).
Section 11.04. Default on Designated Senior Debt.
The Company may not make any payment or distribution to the
Trustee or any Exchange Debentureholder in respect of Obligations with respect
to the Exchange Debentures and may not acquire from the Trustee or any Exchange
Debentureholder any securities for cash or property (other than (i) securities
that are subordinated at least to the same extent as the Exchange Debentures to
(a) Senior Debt and (b) any securities issued in exchange for Senior Debt and
(ii) payments made from the trust described in the discharge and defeasance
provisions of Articles 9 and 10 hereunder) if:
(i) a default in the payment of principal, premium,
if any, or interest with respect to Designated Senior Debt
occurs and is continuing beyond any applicable grace period in
the agreement, indenture or other documents governing such
Designated Senior Debt; or
(ii) a default, other than a payment default, on
Designated Senior Debt occurs and is continuing that then
permits holders of the Designated Senior Debt to accelerate
its maturity and the Trustee receives a notice of the default
(a "Payment Blockage Notice") from the Company or the
Representative of such Senior Debt. If the Trustee receives
any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this
Section unless and until (i) at least 360 days shall have
elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of
principal, premium, if any, interest and liquidated damages on
the Exchange Debentures that have come due have been paid in
full in cash to the extent required by the terms of the
Exchange Debentures. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Exchange Debentures and may acquire them:
(1) in the case of a default referred to in Section
11.04(i) hereof, the date upon which the default is cured or
waived, or
(2) in the case of a default referred to in Section
11.04(ii) hereof, the earlier of (A) the date upon which such
default is cured or waived or (B) 179 days after the date on
which the applicable Payment Blockage Notice is received,
unless the maturity of such Designated Senior Debt has been
accelerated,
if this Article otherwise permits the payment,
distribution or acquisition at the time of such payment or
acquisition.
Section 11.05. Acceleration of Securities.
If payment of the Exchange Debentures is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior Debt
of the acceleration.
Section 11.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Exchange Debentureholder
receives any payment of any Obligations with respect to the Exchange Debentures
at a time when the Trustee or such Exchange Debentureholder, as applicable, has
actual knowledge that such payment is prohibited by Section 11.04 hereof, such
payment shall be held by the Trustee or such Exchange Debentureholder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Exchange Debentureholders or the Company or any other Person money or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article 11,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 11.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Exchange Debentures to violate this Article, but
failure to give such notice shall not affect the subordination of the Exchange
Debentures to Senior Debt as provided in this Article.
Section 11.08. Subrogation.
After all Senior Debt is paid in full and until the Exchange
Debentures are paid in full, Exchange Debentureholders shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Exchange
Debentures) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Exchange Debentureholders have been applied to the payment of Senior Debt. A
distribution made under this Article to holders of Senior Debt that otherwise
would have been made to Exchange Debentureholders is not, as between the Company
and the Exchange Debentureholders, a payment by the Company on the Exchange
Debentures.
Section 11.09. Relative Rights.
This Article defines the relative rights of Exchange
Debentureholders and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Exchange
Debentureholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest
on the Exchange Debentures in accordance with their terms;
(2) affect the relative rights of Exchange
Debentureholders as creditors of the Company other than their
rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Exchange
Debentureholder from exercising its available remedies upon a
Default or Event of Default, subject to the rights of holders
and owners of Senior Debt to receive distributions and
payments otherwise payable to Exchange Debentureholders.
If the Company fails because of this Article to pay principal
of or interest on the Exchange Debentures on the due date, the failure is still
a Default or Event of Default.
Section 11.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Exchange Debentures shall be
impaired by any act or failure to act by the Company or any Holder or by the
failure of the Company or any Holder to comply with this Indenture.
Section 11.11. Distribution or Notice to Representatives.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 11, the Trustee and the Exchange Debentureholders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Exchange Debentureholders for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 11.
Section 11.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Exchange Debentures, unless the Trustee shall have
received at its Corporate Trust Office at least five Business Days prior to the
date of such payment written notice of facts that would cause the payment of any
Obligations with respect to the Exchange Debentures to violate this Article.
Only the Company or a Representative may give the notice. Nothing in this
Article 11 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 11.13. Authorization to Effect Subordination.
Each Exchange Debentureholder by the Exchange
Debentureholder's acceptance thereof authorizes and directs the Trustee on the
Exchange Debentureholder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 11, and
appoints the Trustee to act as the Exchange Debentureholder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a Representative is hereby authorized to file an appropriate claim
for and on behalf of the Exchange Debentureholders.
Section 11.14. Amendments.
The provisions of this Article 11 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
Section 12.02. Notices.
Any notice or communication shall be given in writing and
delivered in person, sent by telex or telephone facsimile, delivered by
commercial courier service or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16195
Attention: Colin Higgin, Esq.
Copy to:
Buchanan Ingersoll Professional Corporation
1 Oxford Centre
301 Grant Street, 20th Floor
Pittsburgh, Pennsylvania 15219
Attention: Carl E. Rothenberger, Jr., Esq.
If to the Trustee:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Department
Such notices or communications shall be effective when
received and shall be sufficiently given if so given within the time prescribed
in this Indenture.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to an Exchange
Debentureholder shall be mailed to him by first class mail, postage prepaid, at
his address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA SS- 313(c),
to the extent required by the TIA.
Failure to mail a notice or communication to an Exchange
Debentureholder or any defect in it shall not affect its sufficiency with
respect to other Exchange Debentureholders. If a notice or communication to an
Exchange Debentureholder is mailed in the manner provided above, it shall be
deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
Section 12.03. Communications by Holders with Other Holders.
Exchange Debentureholders may communicate pursuant to TIA SS-
312(b) with other Exchange Debentureholders with respect to their rights under
this Indenture or the Exchange Debentures. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA SS- 312(c).
Section 12.04. Certificate and Opinion as to Conditions.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 12.05 below) stating that, in
the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 12.05 below) stating that, in
the opinion of such counsel, all such conditions precedent
have been complied with.
Section 12.05. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA SS- 314(a)(4)) shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
it or he has made such examination or investigation as is
necessary to enable it or him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such covenant or condition has been complied
with.
Section 12.06. When Treasury Exchange Debentures Disregarded.
In determining whether the Holders of the required aggregate
principal amount of Exchange Debentures have concurred in any direction, waiver
or consent, Exchange Debentures owned by the Company or any other obligor on the
Exchange Debentures or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
such obligor shall be disregarded, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Exchange Debentures which the Trustee knows are so owned shall
be so disregarded. Exchange Debentures so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to the Exchange
Debentures and that the pledgee is not the Company or any other obligor upon the
Exchange Debentures or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
such obligor.
Section 12.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or
meetings of Exchange Debentureholders. The Registrar and Paying Agent may make
reasonable rules for their functions.
Section 12.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A
"Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day
on which banking institutions are not required to be open in the State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
Section 12.09. Governing Law.
The laws of the State of New York shall govern this Indenture
and the Exchange Debentures without regard to principles of conflicts of law.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan, security or debt agreement of the Company or any Subsidiary. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 12.11. No Recourse against Others.
No recourse for the payment of the principal of or accrued
interest on any of the Exchange Debentures, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any of the Exchange Debentures, or because of the creation of
any Indebtedness represented thereby, shall be had against any stockholder,
officer, director or employee, as such, past, present or future, of the Company
or of any successor corporation or against the property or assets of any such
stockholder, officer, employee or director, either directly or through the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the Exchange
Debentures are solely obligations of the Company, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, any
stockholder, officer, employee or director of the Company or any successor
corporation because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this
Indenture or the Exchange Debentures or implied therefrom, and that any and all
such personal liability of, and any and all claims against every stockholder,
officer, employee and director, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of the Exchange Debentures. It is understood that this limitation
on recourse is made expressly for the benefit of any such shareholder, employee,
officer or director and may be enforced by any of them.
Section 12.12. Successors.
All agreements of the Company in this Indenture and the
Exchange Debentures shall bind its successor. All agreements of the Trustee, any
additional trustee and any Paying Agents in this Indenture shall bind its
successor.
Section 12.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 12.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 12.15. Separability.
Each provision of this Indenture shall be considered separable
and, if for any reason any provision which is not essential to the effectuation
of the basic purpose of this Indenture or the Exchange Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
ARTICLE 13
REDEMPTION
Section 13.01. Notices to Trustee.
If the Company redeems Exchange Debentures pursuant to the
optional redemption provisions of Section 13.07 hereof, it shall furnish to the
Trustee, at least 45 days (unless a shorter period may be satisfactory to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Exchange Debentures to be redeemed and (iv) the redemption price.
Section 13.02. Selection of Exchange Debentures to Be Redeemed.
If less than all of the Exchange Debentures are to be redeemed
at any time, the Trustee shall select the Exchange Debentures to be redeemed
among the Holders of the Exchange Debentures in compliance with the requirements
of the principal national securities exchange, if any, on which the Exchange
Debentures are listed or, if the Exchange Debentures are not so listed, on a pro
rata basis, by lot or in accordance with any other method the Trustee deems fair
and appropriate. In the event of a partial redemption by lot, the particular
Exchange Debentures to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Exchange Debentures not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of
the Exchange Debentures selected for redemption and, in the case of any Exchange
Debentures selected for partial redemption, the principal amount thereof to be
redeemed. Exchange Debentures and portions of Exchange Debentures selected shall
be in amounts of $1,000 or whole multiples of $1,000; except that if all of the
Exchange Debentures of a Holder are to be redeemed, the entire outstanding
amount of Exchange Debentures held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Exchange Debentures called for
redemption also apply to portions of Exchange Debentures called for redemption.
Section 13.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Exchange Debentures are to be redeemed
at its registered address.
The notice shall identify the Exchange Debentures to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Exchange Debenture is being redeemed in part, the
portion of the principal amount of such Exchange Debenture to be redeemed and
that, after the redemption date upon surrender of such Exchange Debenture, a new
Exchange Debenture in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Exchange Debenture;
(d) the name and address of the Paying Agent;
(e) that Exchange Debentures called for redemption must
be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest and Liquidated Damages, if any, on Exchange
Debentures called for redemption ceases to accrue on and after the redemption
date;
(g) the paragraph of the Exchange Debentures and/or
Section of this Indenture pursuant to which the Exchange Debentures called for
redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Exchange Debentures.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 13.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
13.03 hereof, Exchange Debentures called for redemption become irrevocably due
and payable on the redemption date at the redemption price. A notice of
redemption may not be conditional.
Section 13.05. Deposit of Redemption Price.
On or prior to 10:00 a.m. Eastern Time on the redemption date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest and Liquidated
Damages, if any, on all Exchange Debentures to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest and
Liquidated Damages, if any, on all Exchange Debentures to be redeemed.
If Exchange Debentures called for redemption are paid or if
the Company has deposited with the Trustee or Paying Agent money sufficient to
pay the redemption price of, and unpaid and accrued interest and Liquidated
Damages, if any, on all Exchange Debentures to be redeemed, on and after the
applicable redemption date, interest and Liquidated Damages, if any, ceases to
accrue on the Exchange Debentures or the portions of Exchange Debentures called
for redemption (regardless of whether certificates for such Exchange Debentures
are actually surrendered). If an Exchange Debenture is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest and Liquidated Damages, if any, shall be paid to
the Person in whose name such Exchange Debenture was registered at the close of
business on such record date. If any Exchange Debenture called for redemption
shall not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest or Liquidated Damages, if any, not paid on
such unpaid principal, in each case, at the rate provided in the Exchange
Debentures and in Section 4.01 hereof.
Section 13.06. Exchange Debentures Redeemed in Part.
Upon surrender of an Exchange Debenture that is redeemed in
part, the Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Exchange Debenture equal in principal amount to the unredeemed portion of the
Exchange Debenture surrendered.
Section 13.07. Optional Redemption.
The Exchange Debentures will be subject to redemption on or
after July 15, 2002 at the option of the Company, in whole or in part, in
accordance with the notice provisions of Section 13.03 hereof, at the redemption
prices (expressed as percentages of principal amount thereof) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 15 of the years indicated below:
Year Percentage
2002...............................................................106.500%
2003...............................................................105.417%
2004...............................................................104.333%
2005...............................................................103.250%
2006...............................................................102.167%
2007...............................................................101.083%
2008 and thereafter................................................100.000%
In addition, prior to July 15, 2000, the Company may, at its
option, redeem up to 33% of the aggregate of (i) the Liquidation Preference of
the Exchangeable Preferred Stock issued less the Liquidation Preference of
Exchangeable Preferred Stock exchanged for Exchange Debentures and (ii) the
principal amount of Exchange Debentures issued, with the net proceeds of one or
more common equity offerings received on or after the date of original issuance
of the Exchangeable Preferred Stock at a redemption price of 113% of the
Liquidation Preference or principal amount, as the case may be, plus accumulated
and unpaid dividends and Liquidated Damages, in the case of Exchangeable
Preferred Stock and accrued and unpaid interest and Liquidated Damages, in the
case of Exchange Debentures; provided, that after any such redemption, at least
67% of the aggregate of (i) the Liquidation Preference of the Exchangeable
Preferred Stock issued less the Liquidation Preference of Exchangeable Preferred
Stock exchanged for Exchange Debentures and (ii) the principal amount of
Exchange Debentures issued remain outstanding; and provided further, that any
such redemption shall occur within 75 days of the date of closing of such
offering of common equity of the Company.
Section 13.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption
payments with respect to the Exchange Debentures.
[The rest of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed, and attested, all as of the date and year first written above.
ADELPHIA COMMUNICATIONS CORPORATION
By:
Name:
Title:
WITNESS:
Name:
BANK OF MONTREAL TRUST COMPANY, as Trustee
By:
Name:
Title:
WITNESS:
Name:
<PAGE>
Exhibit A
(Face Of Note)
10 1/2% Senior Notes Due 2004
No. $__________
ADELPHIA COMMUNICATIONS CORPORATION
Promises to pay to ________________________ or registered assigns, the
principal sum of_____________________ Dollars on July 15, 2004.
Interest Payment Dates: January 15, and July 15
Record Dates: January 1, and July 1
Dated:
ADELPHIA COMMUNICATIONS CORPORATION
By
Name:
Title:
(SEAL)
This is one of the Notes referred to in the within mentioned Indenture:
BANK OF MONTREAL TRUST COMPANY,
as Trustee
By:
Authorized Signature
<PAGE>
A-10
(Back of Note)
10 1/2% Senior Notes due 2004
[Unless and until it is exchanged in whole or in part for
Notes in definitive form, this Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]1/
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (4) TO INSTITUTIONAL
ACCREDITED INVESTORS IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Adelphia Communications Corporation, a Delaware
corporation (the "Company") promises to pay interest on the principal amount of
this Note at 10 1/2% per annum from July 7, 1997 until July 15, 2004 and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, semi-annually in arrears on January 15 and July
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
January 15, 1998. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal from
time to time on demand at a rate equal to the per annum rate on the Notes then
in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall make payments in
respect of the Notes represented by the Global Note (including principal,
interest and Liquidated Damages, if any) by wire transfer of immediately
available funds to the accounts specified by the Note Custodian. With respect to
Notes issued in definitive form, the Company shall make all payments of
principal, 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 having an aggregate principal amount of $100,000 or more, the Holders of
which have given wire transfer instructions to the Company 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. The Notes represented by the Global Note 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. The Company expects that secondary
trading in the Definitive Notes also will be settled in immediately available
funds.
3. Paying Agent and Registrar. Initially, Bank of
Montreal Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Notes may be presented for registration of transfer and
exchange at the offices of the Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of July 7, 1997 ("Indenture") between the Company and 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, as amended (15
U.S. Code SS-SS- 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are senior unsecured obligations of the Company limited to $250
million in aggregate principal amount.
5. Mandatory Redemption. Except as set forth in paragraph 6
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.
6. Repurchase at Option of Holder. Within 50 days of (i) the
proposed occurrence of a Change of Control or (ii) the occurrence of Change of
Control Triggering Event, the Company shall be required to make an offer (a
"Change of Control Offer") to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder's Notes at a purchase price equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase, which date shall be
no later than 50 days from the date such notice is mailed (the "Change of
Control Payment Date"). Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of Change of Control Triggering Event,
the Company shall mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture. Such right
to require the repurchase of Notes shall not continue after discharge of the
Company from its obligations with respect to the Notes. The board of directors
of the Company may not waive this provision.
7. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture.
8. Persons Deemed Owners. The registered Holder of a
Note may be treated as its owner for all purposes.
9. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to issue up to $100,000,000 in aggregate
principal amount of additional Notes, to transfer, assign, mortgage or pledge
any property to the Trustee and otherwise comply with the covenant to secure
Notes equally, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
10. Defaults and Remedies. An Event of Default occurs if: (i)
the Company defaults in the payment when due of any interest on, or Liquidated
Damages with respect to, any Note and such default continues for a period of 30
days; (ii) the Company defaults in the payment of the principal of any Note at
its maturity; (iii) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in the Indenture or the Notes for 60
days after written notice to the Company by the Trustee or the Holders of at
least 25% in principal amount of the Notes then outstanding; (iv) the Company
fails to pay when due principal, interest or premium aggregating $10,000,000 or
more with respect to any Indebtedness of the Company 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 10 days after written notice; (v) a final judgment or final judgments for
the payment of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries and such judgment or
judgments remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
judgments exceeds $10 million; or (vi) the Company or any Restricted Subsidiary
with liabilities of greater than $10,000,000 under GAAP as of the date of the
event described in this clause, pursuant to or within the meaning of Bankruptcy
Law: (a) commences a voluntary case, (b) consents to the entry of an order for
relief against it in an involuntary case, (c) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (d) makes a
general assignment for the benefit of its creditors, (vii) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for
relief against the Company, or any Restricted Subsidiary with liabilities of
greater than $10,000,000 under GAAP as of the effective date of such order or
decree in an involuntary case, (b) appoints a custodian of the Company, or any
Restricted Subsidiary of Restricted Subsidiary with liabilities of greater than
$10,000,000 under GAAP as of the effective date of such order or decree or for
all or substantially all of its property or (c) orders the liquidation of the
Company, or any Restricted Subsidiary with liabilities greater than $10,000,000
under GAAP as of the effective date of such order or decree; and the order or
decree remains unstayed and in effect for 60 consecutive days. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case an Event
of Default specified in clauses (6) or (7) of Section 6.01 of the Indenture
occurs with respect to the Company, or a Restricted Subsidiary with liabilities
of greater than $10,000,000 under GAAP as of the effective date of such order or
decree, all outstanding Notes will become due and payable without further action
or notice. Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of the principal of and Liquidated Damages, if any, or interest on, the
Notes (provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequence, including any related payment default) or a default with respect to
any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Note affected.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required,
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default and what action
the Company is taking or proposes to take thereto.
11. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
12. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability including any rights against any general partner of the Company in its
capacity as general partner. The waiver and release are part of the
consideration for the issuance of the Notes.
13. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
15. Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Notes Registration Rights Agreement dated as of July 7, 1997,
between the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
16. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Colin H. Higgin, Esq.
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of
this Note)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Article 3 of the Indenture, check the box below:
[GRAPHIC OMITTED]Article 3
If you want to elect to have only part of the Note purchased
by the Company pursuant to Article 3 of the Indenture, state the amount you
elect to have purchased: $_______________
Date:____________________ Your Signature:
(Sign exactly as your name appears on the
Note)
Tax Identification No.:_______________
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF NOTES2/
The following exchanges of a part of this Global Note for other Notes have been made:
<S> <C> <C> <C> <C>
Principal Amount of
Amount of decrease Amount of increase this Global Note
Signature of in Principal Amount in Principal Amount
following such authorized officer of this Global Note
of this Global Note decrease (or increase) of Trustee
or Note
Custodian
Date of Exchange
</TABLE>
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by one or more Definitive Notes (CUSIP No. __________) and
registered with the Registrar in the name of
_________________________________________ (the "Transferor"). The Transferor has
requested an exchange or transfer of such Definitive Note(s) in the form of an
equal principal amount of Notes evidenced by one or more Definitive Notes (CUSIP
No. __________), to be delivered to the Transferor or, in the case of a transfer
of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being acquired for the
Transferor's own account, without transfer;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
Company;
or
[GRAPHIC OMITTED] Surrendered Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Smith Barney Inc., Bear, Stearns &
Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc. (the
"Initial Purchasers"), the initial purchasers of such Notes being transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: Adelphia Communications Corporation
Smith Barney Inc.
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by the Global Note (CUSIP No. __________) held with the
Depository in the name of ________________ (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in the Notes to a Person
who will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Definitive Notes (CUSIP No. __________), to be
registered with the Registrar in the name of ______________.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
beneficial owner of such Notes;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Smith Barney Inc., Bear,
Stearns & Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA)
Inc. (the "Initial Purchasers"), the initial purchasers of such Notes being
transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: Adelphia Communications Corporation
Smith Barney Inc.
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
DEFINITIVE NOTE TO GLOBAL NOTE
(Pursuant to Section 2.06(e) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by one or more Definitive Notes (CUSIP No. __________) and
registered with the Registrar in the name of
_________________________________________ (the "Transferor"). The Transferor has
requested a transfer of such Definitive Notes to a Person who will take delivery
thereof in the form of an equal beneficial interest in the Global Note (CUSIP
No. ____________).
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
beneficial owner of such Notes;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
Upon giving effect to this request to exchange a Definitive
Note for a beneficial interest in the Global Note, the
resulting beneficial interest shall be subject to the
restrictions on transfer applicable to the Global Note
pursuant to the Indenture and the Securities Act.
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Smith Barney Inc., Bear,
Stearns & Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA)
Inc. (the "Initial Purchasers"), the initial purchasers of such Notes being
transferred.
[Insert Name of Transferor]
By:
Name:
Title:
cc: Adelphia Communications Corporation
Smith Barney Inc.
<PAGE>
EXCHANGEABLE PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT
Dated as of July 7, 1997
by and among
Adelphia Communications Corporation
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
and
Highland Holdings
<PAGE>
This Exchangeable Preferred Stock Registration Rights Agreement (this
"Agreement") is made and entered into as of July 7, 1997 by and among Adelphia
Communications Corporation (the "Company") and Smith Barney Inc., Bear, Stearns
& Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc.
(collectively, the "Initial Purchasers"), who have agreed to purchase an
aggregate of 950,000 shares of 13% Series A Cumulative Exchangeable Preferred
Stock, par value $.01 per share (Liquidation Preference $100.00 per share) of
the Company (the "Exchangeable Preferred Stock") pursuant to the Purchase
Agreement (as defined below) and Highland Holdings who has agreed to purchase
550,000 shares of the Exchangeable Preferred Stock pursuant to a separate
agreement with the Company. Unless the context otherwise requires, the term
"Exchangeable Preferred Stock" refers collectively to the 950,000 shares to be
purchased by the Initial Purchasers and the 550,000 shares to be purchased by
Highland Holdings.
This Agreement is made pursuant to the Purchase Agreement, dated July
1, 1997 (the "Purchase Agreement"), between the Company and the Initial
Purchasers and the separate purchase agreement, dated __________, 1997 between
the Company and Highland Holdings (the "Highland Holdings Purchase Agreement").
In order to induce the Initial Purchasers and Highland Holdings to purchase the
Exchangeable Preferred Stock, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
2 of the Purchase Agreement and the obligations of Highland Holdings set forth
in the Highland Holdings Purchase Agreement.
The parties hereby agree as follows:
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1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Amount: With respect to any Share, the Liquidation Preference of such
Share, and with respect to any Debenture, the principal amount of such
Debenture.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Certificate of Designations: The Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof in
respect of the Exchangeable Preferred Stock.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Transfer Agent and/or the Registrar, as applicable, under the Certificate
of Designations and/or the Exchange Indenture, as applicable, of Exchange
Securities with (a) in the case of Exchange Shares, the same aggregate
Liquidation Preference as the aggregate Liquidation Preference of the
Exchangeable Preferred Stock that was tendered by Holders thereof pursuant to
the Exchange Offer and (b) in the case of New Exchange Debentures, the same
aggregate principal amount as the aggregate principal amount of Exchange
Debentures that were tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Exchangeable Preferred
Stock, each Dividend Payment Date and with respect to the Exchange Debentures,
each Interest Payment Date.
Debentures: The Exchange Debentures and the New Exchange Debentures.
Dividend Payment Date: As defined in the Certificate of Designations.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Debentures: The 13% Senior Subordinated Exchange Debentures
due 2009 of the Company for which the Exchangeable Preferred Stock may be
exchanged.
Exchange Indenture: The Exchange Indenture, to be dated as of the date
of the first issuance of Exchange Debentures thereunder, between the Company and
Bank of Montreal Trust Company, as trustee (the "Trustee"), pursuant to which
the Exchange Debentures are to be issued, as such Exchange Indenture is amended
or supplemented from time to time in accordance with the terms thereof.
Exchange Offer: The registration by the Company under the Act of the
Exchange Securities pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Exchange Securities (a) in the case of Exchangeable
Preferred Stock, with an aggregate Liquidation Preference equal to the aggregate
Liquidation Preference of the Transfer Restricted Securities tendered in such
exchange offer by such Holders and (b) in the case of Exchange Debentures, in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exchange Securities: The Exchange Shares and the New Exchange
Debentures.
Exchange Shares: The shares of 13% Series B Cumulative Exchangeable
Preferred Stock, par value $.01 per share (Liquidation Preference $100.00 per
share) of the Company to be issued pursuant to the Certificate of Designations
in the Exchange Offer.
Exchangeable Preferred Stock: As defined in the preamble hereto.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Exchangeable Preferred Stock purchased by the Initial
Purchasers to certain "qualified institutional buyers," as such term is defined
in Rule 144A under the Act.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Exchange Indenture.
Liquidated Damages: As defined in Section 5 hereof.
Liquidation Preference: $100.00 per share of Exchangeable Preferred
Stock or Exchange Shares.
NASD: National Association of Securities Dealers, Inc.
New Exchange Debentures: The 13% Senior Subordinated Exchange
Debentures due 2009, to be issued pursuant to the Exchange Indenture in the
Exchange Offer.
Payment Date: The Dividend Payment Date and/or the Interest Payment
Date, whichever is applicable.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Shares or Debentures, each Person who is a Holder of Shares or Debentures on the
record date with respect to the Payment Date on which such Damages Payment Date
shall occur.
Registrar: Means the Registrar of the Debentures as defined in the
Exchange Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Securities: The Exchangeable Preferred Stock and the Exchange
Debentures.
Shares: The Exchange Shares and the Exchangeable Preferred Stock.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Agent: Means the Transfer Agent with respect to the Shares as
defined in the Certificate of Designations.
Transfer Restricted Securities: Each Security, until the earliest to
occur of (a) the date on which such Security is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Security has been effectively registered under the Act and disposed of in
accordance with a Shelf Registration Statement and (c) the date on which such
Security is distributed to the public pursuant to Rule 144 under the Act or by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company shall (i) use its reasonable efforts to
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 90 days after the Closing Date, a Registration
Statement under the Act relating to the Exchange Securities and the Exchange
Offer, (ii) use its best efforts to cause such Registration Statement to become
effective no later than 180 days after the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Exchange Securities to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer Registration Statement shall be on the appropriate form
permitting registration of the Exchange Securities to be offered in exchange for
the Transfer Restricted Securities and to permit resales of Exchange Securities
held by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Exchange Securities and the Notes (as defined
in the Purchase Agreement) shall be included in the Exchange Offer Registration
Statement. The Company shall use its best efforts to cause the Exchange Offer to
be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Securities that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and may be required,
therefore, to deliver a prospectus meeting the requirements of the Act in
connection with any sales of the Exchange Securities received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Securities held by any such
Broker-Dealer except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Exchange Securities acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer Registration
Statement is declared effective.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request, at any time
during such one year period in order to facilitate such sales.
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or permitted to Consummate the Exchange
Offer, in either case, because the Exchange Offer is not permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Securities acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder, or (iii) if any Holder of Transfer
Restricted Securities is a Broker-Dealer and holds Securities acquired directly
from the Company or an affiliate of the Company and shall so notify the Company,
then the Company shall
(x) cause to be filed a shelf registration statement pursuant
to Rule 415 under the Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day
after the date on which the Company is notified by the Commission or
otherwise determines that it is not required to file the Exchange Offer
Registration Statement or permitted to Consummate the Exchange Offer,
(2) the 30th day after the date on which the Company receives notice
from a Holder of Transfer Restricted Securities as contemplated by
clauses (ii) or (iii) above, and (3) the 60th day after the Closing
Date (such earliest date being the "Shelf Filing Deadline"), which
Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the
90th day after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for resales of Securities by the Holders of Transfer
Restricted Securities entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, until the second anniversary of the Closing Date or such shorter period
that will terminate when all the Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or become
eligible for resale pursuant to Rule 144 without volume or other restrictions.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
5. LIQUIDATED DAMAGES
If (i) the Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has
not been Consummated within 30 business days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company hereby agrees to pay
liquidated damages ("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 Amount of Transfer Restricted Securities held by such Holder for the
period that the Registration Default continues. The amount of the Liquidated
Damages shall increase by an additional 0.25% per annum for 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 Amount of Transfer
Restricted Securities. All accrued Liquidated Damages shall be paid to Record
Holders by the Company by wire transfer of immediately available funds or by
federal funds check on each Damages Payment Date, as provided in the Exchange
Indenture or the Certificate of Designations, as applicable. Following the cure
of all Registration Defaults relating to any particular Transfer Restricted
Securities, the accrual of Liquidated Damages with respect to such Transfer
Restricted Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Security shall have
been satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below, shall use its best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
(i) If in the reasonable opinion of counsel to the Company
there is a question as to whether the Exchange Offer is permitted by
applicable law, the Company hereby agrees to seek a no-action letter or
other favorable decision from the Commission allowing the Company to
Consummate an Exchange Offer for such Securities. The Company hereby
agrees to pursue the issuance of such a decision to the Commission
staff level but shall not be required to take commercially unreasonable
action to effect a change of Commission policy. The Company hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursue a resolution (which need not be
favorable) by the Commission staff of such submission.
(ii) as a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Securities to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Securities in its ordinary course of business.
In addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, and similar no-action letters (including any no-action
letter obtained pursuant to clause (i) above), and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Exchange Securities obtained by such Holder
in exchange for Securities acquired by such Holder directly from the
Company.
(iii) prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall, provide a supplemental
letter to the Commission stating (A) that the Company is registering
the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above
and (B) including a representation that the Company has not entered
into any arrangement or understanding with any Person to distribute the
Exchange Securities to be received in the Exchange Offer and that, to
the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange
Securities in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Exchange Securities received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof, and pursuant
thereto the Company will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Securities by
Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
for the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and, in the
case of either clause (A) or (B), use its best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for its intended purpose(s) as
soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as applicable or
such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause
the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Act in a timely manner; and comply with
the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Company will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) to which a selling Holder
of Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s), if any, shall reasonably object within
five business days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available
for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the
filing thereof as such selling Holders or underwriter(s), if any,
reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriters, all
financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
such Holders, underwriter, attorney or accountant in connection with
such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the Amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
Amount of Exchangeable Preferred Stock or Exchange Debentures covered
thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company
hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement,
all to such extent as may be requested by the Initial Purchasers or by
any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration
Statement contemplated by this Agreement; and whether or not an
underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company shall:
(A) furnish to the Initial Purchasers, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, (i) upon the date of the Consummation
of the Exchange Offer, (ii) if applicable, the effectiveness of the
Shelf Registration Statement and (iii) upon the filing of any amendment
or supplement to any Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, signed by (y) the President or any Vice
President and (z) a principal financial or accounting officer of the
Company confirming, as of the date thereof, the matters set forth in
paragraphs (j) and (k) of Section 7 of the Purchase Agreement and such
other matters as such parties may reasonably request;
(2) an opinion, dated the date of Consummation of the Offer or
the date of effectiveness of the Shelf Registration Statement, as the
case may be, of counsel for the Company, covering the matters set forth
in paragraphs (d), (e), (f) and (g) of Section 7 of the Purchase
Agreement and such other matters as such parties may reasonably
request, and in any event including a statement to the effect that such
counsel has participated in conferences with officers and other
representatives of the Company's representatives of the independent
public accountants for the Company and the Initial Purchasers'
representatives and the Initial Purchasers' counsel in connection with
the preparation of such Registration Statement and the related
Prospectus and have considered the matters required to be stated
therein and the statements contained therein, although such counsel has
not independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to a certain extent upon facts
provided to such counsel by officers and other representatives of the
Company and without independent check or verification), no facts came
to such counsel's attention that caused such counsel to believe that
the applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became effective,
and, in the case of the Exchange Offer Registration Statement, as of
the date of Consummation, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus contained in such Registration Statement as of its date and,
in the case of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an untrue
statement of a material fact or omitted 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. Without
limiting the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data included in
any Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) customary comfort letters, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness of the
Shelf Registration Statement, as the case may be, from the Company's
independent accountant, Deloitte & Touche LLP, in the customary form
and covering matters of the type customarily covered in comfort letters
by underwriters in connection with primary underwritten offerings, and
affirming the matters set forth in the comfort letters delivered
pursuant to Section 7(i) of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause
(A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the Company
shall so advise the Initial Purchasers and the underwriters(s), if any, and each
selling Holder promptly and, if requested by such Persons, shall confirm such
advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and its respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s) may request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by any
Registration Statement; provided, however, that the Company shall not
be required to register or qualify to transact business where it is not
now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of
Securities covered by the Shelf Registration Statement, Exchange
Securities having an aggregate Amount equal to the aggregate Amount of
Securities surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Securities to be
registered in the name of such Holder or in the name of the
purchaser(s) of such Securities, as the case may be; in return, the
Securities held by such Holder shall be surrendered to the Company for
cancellation;
(xiv) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xii)
above;
(xvi) if any fact or event contemplated by clause (c)(iii)(D)
above shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Exchange Indenture and the
Transfer Agent with printed certificates for the applicable Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use its reasonable best efforts
to cause such Registration Statement to become effective and approved
by such governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to consummate
the disposition of such Transfer Restricted Securities;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xx) in the event of any registration of the Exchange
Debentures or the issuance of New Exchange Debentures in exchange for
Exchange Debentures, cause the Exchange Indenture to be qualified under
the TIA on or prior to the later of (A) the effective date of the first
Registration Statement required by this Agreement or (B) the date of
the first exchange of Exchange Debentures for Exchangeable Preferred
Stock, and, in connection therewith, cooperate with the Trustee and the
Holders of Debentures to effect such changes to the Exchange Indenture
as may be required for such Exchange Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Exchange
Indenture to be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on
which similar securities issued by the Company is then listed if
requested by the Holders of a majority in aggregate Amount of
Exchangeable Preferred Stock or Exchange Debentures or the managing
underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses associated with and incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made by the Initial Purchasers or any Holder with the NASD and
reasonable counsel fees and disbursements in connection therewith (and, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD));
(ii) all reasonable fees and disbursements of compliance with federal securities
and state Blue Sky or securities laws (including all fees and expenses of
counsel to the underwriter(s) in connection with compliance with state Blue Sky
or securities laws); (iii) all expenses of printing (including printing
certificates for the Exchange Securities to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees, if any, in connection with listing the Securities and the
Exchange Securities on a national securities exchange or automated quotation
system pursuant to the requirements hereof; (vi) all fees and expenses of the
Trustee under the Exchange Indenture to the extent provided in the Exchange
Indenture and of any escrow agent, custodian or exchange agent; and (vii) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company shall, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company shall reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins or such other counsel as may be chosen by the Holders of a
majority in Amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared.
8. INDEMNIFICATION
(a) Indemnification by the Company. Upon any registration of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, pursuant to Sections 3 and 4 hereof, and in consideration of the
agreements of the Initial Purchasers and Highland Holdings contained herein, and
as an inducement to the Initial Purchasers and Highland Holdings to purchase the
Securities, the Company shall and hereby agrees to, (i) indemnify and hold
harmless each Holder of Transfer Restricted Securities and Broker-Dealer
Transfer Restricted Securities, as applicable, to be included in such
registration and each person who participates as a placement or sales agent or
as an underwriter in any offering or sale of such Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities, as applicable, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
agent or underwriter may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement under which such
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities,
as applicable, were registered under the Act, or any preliminary, final or
summary Prospectus contained therein or furnished by the Company to any such
Holder, agent or underwriter, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) reimburse such Holder, such agent and such
underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
under (i) above to any such person in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, or preliminary, final or summary Prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, in
any Registration Statement filed pursuant to Sections 3 and 4 hereof and to
entering into any underwriting agreement, if any, with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to them from
the Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter named in any
such underwriting agreement, if any, severally and not jointly, to (i) indemnify
and hold harmless the Company, and, in the case of a Shelf Registration
Statement, all other Holders of Transfer Restricted Securities, against any
losses, claims, damages or liabilities to which the Company, or such other
Holders of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary Prospectus contained therein or furnished by the
Company to any such Holder, agent or underwriter, if any, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter expressly for use therein, and (ii) reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such Holder shall be required to undertake
liability to any person under this Section 8(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of
such Holder's Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the indemnified party shall have been advised by
counsel that representation of the indemnified party by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. The indemnifying party
shall not be required to indemnify any indemnified party for any amount paid or
payable by such indemnified party in the settlement of any action, proceeding or
investigation without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. It is understood that
contribution under this subsection (d) is unavailable to indemnified parties to
the same extent that indemnification is unavailable under the proviso at the end
of subsection (a) above. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) or
Broker-Dealer Transfer Restricted Securities, as applicable, exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
and any underwriters' obligations in this Section 8(d) to contribute shall be
several in proportion to the Amount of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities, as applicable, registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder, agent and underwriter and each person, if any, who controls any
Holder, agent or underwriter within the meaning of the Act; and the obligations
of the Holders and any underwriters contemplated by this Section 8 shall be in
addition to any liability which the respective Holder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Act.
9. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available to any Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the holders of a majority in
aggregate Amount of the Transfer Restricted Securities included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Company.
12. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages (including the
liquidated damages contemplated hereby) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Securities. The Company shall not take
any action, or permit any change to occur, with respect to the Securities that
would materially and adversely affect the ability of the Holders to Consummate
the Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding Amount of
Exchangeable Preferred Stock or Exchange Debentures, as applicable.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being tendered pursuant to such Exchange Offer may be given by the Holders
of a majority of the outstanding Amount of Transfer Restricted Securities being
tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Transfer Agent or the Registrar under the Exchange Indenture (as
applicable), with a copy to the Transfer Agent or the Registrar under
the Exchange Indenture (as applicable); and
(ii) if to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
Telecopier No.: (814) 274-7098
Attention: Tim Rigas
With a copy to:
Buchanan Ingersoll
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, PA 15219
Telecopier No.: (412) 562-1041
Attention: Carl Rothenberger
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Exchange Indenture and to the Transfer Agent at the
address specified in the Certificate of Designations.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the Securities, the
Exchange Securities, the Exchange Indenture, the Certificate of Designations and
the Purchase Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[signature page follows]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Adelphia Communications Corporation
By:
Name:
Title:
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
By: Smith Barney Inc.
By:
Name:
Title:
Highland Holdings
By:
Name:
Title:
<PAGE>
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
SERIES C CUMULATIVE
CONVERTIBLE PREFERRED STOCK
OF
ADELPHIA COMMUNICATIONS CORPORATION
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------
Adelphia Communications Corporation (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, certifies that pursuant to the authority contained in Article
Fourth of its Certificate of Incorporation, as amended (the "Certificate of
Incorporation") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Series C Preferred Stock
Committee (the "Committee") of the Board of Directors of the Corporation at a
meeting held on July 1, 1997 duly approved and adopted the following resolution
which resolution remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the
Committee by the Board of Directors on June 22, 1997, and pursuant to the
authority vested in the Board of Directors by the Certificate of Incorporation,
the Committee does hereby designate, create, authorize and provide for the
issuance of Series C Cumulative Convertible Preferred Stock (the "Series C
Preferred Stock"), par value $.01 per share, with a liquidation preference of
$1,000 per share, consisting of 100,000 shares, no shares of which have
heretofore been issued by the Corporation, having the following voting powers,
preferences and relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural).
Affiliate. The term "Affiliate" of any specified Person shall
mean any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
Applicable Redemption Price. The term "Applicable Redemption
Price" shall mean a price per share equal to the following redemption prices
(expressed as a percentage of the Liquidation Preference thereof) during the
twelve-month periods commencing on August 1 of the years indicated:
2000 104.00%
2001 102.00%
2002 100.00%
in each case, together with accrued and unpaid dividends (if any) thereon to the
Redemption Date.
Business Day. The term "Business Day" shall mean a day other
than a Saturday or Sunday or any federal holiday.
Capital Stock. The term "Capital Stock" shall mean (i) in the
case of a corporation, corporate stock, (ii) in the case of an association or
business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
Class A Common Stock. The term "Class A Common Stock" shall
mean the Class A Common Stock, par value $.01 per share, of the Corporation.
Class B Common Stock. The term "Class B Common Stock" shall
mean the Class B Common Stock, par value $.01 per share, of the Corporation.
Common Equity. The term "Common Equity" shall mean all shares
now or hereafter authorized of any class of common stock of the Corporation,
including the Class A Common Stock and Class B Common Stock, and any other stock
of the Corporation, howsoever designated, authorized after the Initial Issue
Date, that have the right (subject always to prior rights of any class or series
of preferred stock) to participate in the distribution of the assets and
earnings of the Corporation without limit as to per share amount.
Continuing Directors. The term "Continuing Directors" shall
mean, as of any date of determination, any member of the Board of Directors of
the Corporation who (i) was a member of such Board of Directors on the Initial
Issue Date or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
Conversion Agent. The term "Conversion Agent" shall mean the
entity designated from time to time by the Corporation to act as conversion
agent for the Series C Preferred Stock.
Conversion Date. The term "Conversion Date" shall have the
meaning set forth in Section 4(b) below.
Conversion Payments. The term "Conversion Payments" shall
have the meaning set forth in Section 4(a) below.
Conversion Price. The term "Conversion Price" shall
mean $8.48, subject to the adjustments provided in Section 4.
Conversion Rate. The term "Conversion Rate" shall mean the
number of shares of Class A Common Stock issuable upon conversion of one share
of Series C Preferred Stock, determined by dividing the Liquidation Preference
of such share of Series C Preferred Stock by the Conversion Price.
Current Market Price. The term "Current Market Price" shall
mean, with respect to any particular security on any date of determination, the
average over the 20 Trading Days ending on the date immediately preceding the
date of such determination of the last reported sale price, or, if no such sale
takes place on any such day, the closing bid price, in either case as reported
for consolidated transactions on the principal national securities exchange
(including the Nasdaq National Market and Nasdaq Stock Market) on which such
security is listed or admitted for trading; provided, however, that if any event
that results in an adjustment of the Conversion Rate occurs during the period
beginning on the first day of such 20-day period and ending on the date
immediately preceding the date of determination, the Current Market Price as
determined pursuant to the foregoing will be appropriately adjusted to reflect
the occurrence of such event or, if such security is not listed on any exchange
or admitted for trading on any such exchange or market, the Current Market Price
of such security shall be the last reported bid price for such security on the
date preceding the date of such determination provided by a New York Stock
Exchange member firm designated by the Corporation or, if no such member firm
can provide such a bid price, as determined in good faith by a majority of the
independent directors of the Corporation. In the event the Corporation is
required to pay cash to Holders of Series C Preferred Stock seeking to convert
shares of Series C Preferred Stock at a time when an insufficient number of
shares of Class A Common Stock are authorized for issuance, the Corporation is
restricted by government regulations from issuing shares of Class A Common Stock
upon conversion of any shares of Series C Preferred Stock or in lieu of the
issuance of a fractional share, the Current Market Price shall be determined on
the basis of the average of the five Trading Days ending on and including the
third Trading Day preceding the date of such conversion, as the case may be.
Dividend Payment Date. The term "Dividend Payment Date" shall
have the meaning set forth in Section 2(a) below.
Dividend Period. The term "Dividend Period" shall mean the
period from, and including, the Initial Issue Date to, but not including, the
first Dividend Payment Date and thereafter, each quarterly period from, and
including, the preceding Dividend Payment Date to, but not including the next
Dividend Payment Date.
Equity Interests. The term "Equity Interests" shall mean
Capital Stock and all warrants, options or other rights to acquire Capital Stock
(but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
Executive Officer. The term "Executive Officer" shall mean any
officer of the Corporation that would be deemed to be an "executive officer"
within meaning of the rules and regulations of the Securities and Exchange
Commission.
Holder. The term "Holder" shall mean the record holder of one
or more shares of Series C Preferred Stock, as shown on the books and records of
the Transfer Agent.
Initial Issue Date. The term "Initial Issue Date" shall mean
the date that shares of Series C Preferred Stock are first issued by the
Corporation.
Junior Securities. The term "Junior Securities" shall mean any
class of stock ranking junior to the Series C Preferred Stock as to the payment
of dividends and as to rights in liquidation, dissolution or winding up of the
affairs of the Corporation. The Corporation's Class A Common Stock and Class B
Common Stock are expressly defined and included as Junior Securities.
Liquidation Preference. The term "Liquidation Preference"
shall mean $1,000 per share of Series C Preferred Stock, plus accrued and unpaid
dividends (if any) to the date fixed for liquidation, dissolution, winding up or
reduction or decrease in capital stock, or in the case of Parity Securities,
such other amounts per share as may be set forth in the Certificate of
Designations for such Parity Securities, as the context requires.
Market Capitalization. The term "Market Capitalization" shall
mean, as of any date, the product of the Current Market Price of the Class A
Common Stock as of such date times the number of shares of Class A Common Stock
outstanding as of such date.
Officers' Certificate. The term "Officers' Certificate" shall
mean a certificate signed on behalf of the Corporation by two officers of the
Corporation, one of whom must be the Chief Executive Officer, the Chief
Financial Officer, the Treasurer or the principal accounting officer of the
Corporation that meets the requirements of Section 11 hereof.
Parity Securities. The term "Parity Securities" shall mean any
class or series of stock of the Corporation authorized after the Initial Issue
Date that is entitled to receive payment of dividends and to receive assets upon
liquidation, dissolution or winding up of the affairs of the Corporation on a
parity with the Series C Preferred Stock. The Corporation's Series A Preferred
Stock and Series B Preferred Stock are expressly defined and included as Parity
Securities.
Record Date. The term "Record Date" shall have the meaning
set forth in Section 2(a) below.
Redemption Date. The term "Redemption Date" shall have the
meaning set forth in Section 5(d) below.
Rights. The term "Rights" shall mean securities, rights,
options or warrants entitling a holder thereof to subscribe for or purchase any
shares of Class A Common Stock or Class B Common Stock of the Corporation.
Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.
Senior Securities. The term "Senior Securities" shall mean any
class or series of stock of the Corporation authorized after the Initial Issue
Date ranking senior to the Series C Preferred Stock in respect of the right to
receive dividends and in respect of the right to participate in any distribution
upon liquidation, dissolution or winding up of the affairs of the Corporation.
Series A Preferred Stock. The term "Series A Preferred Stock"
shall mean the 13% Series A Cumulative Exchangeable Preferred Stock, $.01 par
value, of the Corporation.
Series B Preferred Stock. The term "Series B Preferred Stock"
shall mean the 13% Series B Cumulative Exchangeable Preferred Stock, $.01 par
value, of the Corporation.
Trading Day. The term "Trading Day" with respect to either the
Class A Common Stock or Series C Preferred Stock, as the case may be, shall mean
any day on which any market (including, without limitation, any formal or
informal over the counter market) in which the applicable security is then
traded and in which a quoted price may be ascertained is open for business.
Transfer Agent. The term "Transfer Agent" shall mean the
entity designated from time to time by the Corporation to act as the registrar
and transfer agent for the Series C Preferred Stock.
Voting Rights Trigger Event. The term "Voting Rights Trigger
Event" shall have the meaning set forth in Section 5(b) below.
2. Dividends.
(a) The Holders of shares of the Series C Preferred Stock
shall be entitled to receive, when, as and if dividends are declared by the
Board of Directors out of funds of the Corporation legally available therefor,
cumulative preferential dividends from the Initial Issue Date of the Series C
Preferred Stock accruing at the rate per share of $81.25 per annum , or $20.3125
per quarter, payable quarterly in arrears on January 31, April 30, July 30 and
October 31 in each year or, if any such date is not a Business Day, on the next
succeeding business day (each, a "Dividend Payment Date"), to the Holders of
record as of the immediately preceding January 15, April 15, July 15 and October
15 (each, a "Record Date"). Dividends will be payable in cash. The first
dividend payment of $20.3125 per share of Series C Preferred Stock will be
payable on October 31, 1997. Dividends payable on the Series C Preferred Stock
will be computed on the basis of a 360-day year of twelve 30-day months and will
be deemed to accrue on a daily basis.
(b) Dividends on the Series C Preferred Stock shall accrue
whether or not the Corporation has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether or not
dividends are declared. Dividends will accumulate to the extent they are not
paid on the Dividend Payment Date for the quarter to which they relate;
provided, however, the Corporation shall be required to declare and pay such
dividends to the extent there are funds legally available therefor, except to
the extent that it is the good faith judgment of management of the Corporation
that the use of such funds for the payment of dividends would place the
Corporation or any of its Subsidiaries in default under any agreement relating
to the senior indebtedness of the Corporation or any of its Subsidiaries, in
which case the Corporation shall furnish to each Holder, prior to the Dividend
Payment Date at issue, a certificate to such effect signed by the President, the
Chief Executive Officer or a Vice President or a Vice Chairman of the Company.
Accumulated unpaid dividends will bear interest at the rate of 13% per annum.
The Corporation shall take all actions required or permitted under Delaware law
to permit the payment of dividends on the Series C Preferred Stock.
(c) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
the Series C Preferred Stock with respect to any Dividend Period unless all
dividends for all preceding Dividend Periods have been declared and paid upon,
or declared and a sufficient sum set apart for the payment of such dividend
upon, all outstanding shares of Series C Preferred Stock. Provided that all
dividends for all preceding Dividend Periods have been paid in full, to the
extent that cash is not available for a full dividend payment in a current
Dividend Period, the Corporation may declare and pay a partial dividend on the
Series C Preferred Stock, provided that, the Series C Preferred Stock will share
any partial dividends paid on Parity Securities on a pro-rata basis, other than
dividends paid solely in shares of Parity Securities. Unless full cumulative
dividends on all outstanding shares of Series C Preferred Stock due for all past
Dividend Periods shall have been declared and paid, or declared and a sufficient
sum for the payment thereof set apart, then: (i) no dividend (other than a
dividend payable solely in shares of any Junior Securities or Parity Securities,
respectively) shall be declared or paid upon, or any sum set apart for the
payment of dividends upon, any shares of Junior Securities or any Parity
Securities, respectively; (ii) no other distribution (other than as required by
the terms of the Certificate of Designations of Parity Securities) shall be made
upon or any sum set apart for the payment of any distribution upon, any shares
of Junior Securities or any Parity Securities; (iii) no shares of Junior
Securities or Parity Securities shall be purchased, redeemed or otherwise
acquired or retired for value (excluding an exchange for shares of other Junior
Securities) by the Corporation or any of its Subsidiaries (other than as
required by the terms of the Certificate of Designations of Parity Securities);
and (iv) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities or Parity Securities by
the Corporation or any of its Subsidiaries (other than as required by the terms
of the Certificate of Designations of Parity Securities). Holders of the Series
C Preferred Stock will not be entitled to any dividends, whether payable in
cash, property or stock, in excess of the full cumulative dividends as herein
described. This Section 2(c) shall not prevent the Corporation from making
Conversion Payments pursuant to Section 4(a).
3. Distributions Upon Liquidation, Dissolution or
Winding Up.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation or reduction or decrease in its capital
stock resulting in a distribution of assets to the holders of any class or
series of the Corporation's Capital Stock (a "reduction or decrease in capital
stock"), each Holder of shares of Parity Securities shall be entitled to payment
out of the assets of the Corporation available for distribution of an amount
equal to the respective Liquidation Preference per share of the specific series
of Parity Securities held by such Holder (as fixed in the Certificate of
Designations for such series of Parity Securities), before any distribution is
made on any Junior Securities, including, without limitation, Common Equity of
the Corporation. After payment in full of the Liquidation Preference to which
Holders of Parity Securities are entitled, such Holders will not be entitled to
any further participation in any distribution of assets of the Corporation.
However, neither the voluntary sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
of the property or assets of the Corporation nor the consolidation or merger of
the Corporation with or into one or more corporations will be deemed to be a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation or reduction or decrease in capital stock, unless such sale,
conveyance, exchange or transfer shall be in connection with a liquidation,
dissolution or winding up of the business of the Corporation or reduction or
decrease in capital stock.
4. Conversion Rights.
(a) Each Holder of shares of Series C Preferred Stock shall
have the right, at such Holder's option, to convert all or any portion of its
shares of Series C Preferred Stock into shares of Class A Common Stock at any
time, unless previously redeemed or repurchased, at the Conversion Rate (subject
to the Corporation obtaining the necessary governmental approvals). In the event
that an insufficient number of shares of Class A Common Stock are available for
issuance or the Corporation is restricted by government regulation from issuing
shares of Class A Common Stock upon conversion of any shares of Series C
Preferred Stock, (i) if the inability to honor the conversion is due to there
being an insufficient number of shares of Class A Common Stock available for
issuance, , such Holders may require the Corporation to hold a special meeting
of the stockholders of the Corporation for the purpose of authorizing a
sufficient number of additional shares of Class A Common Stock to permit the
conversion of all of such Holders' shares of Series C Preferred Stock, or (ii)
if the Holders do not exercise the option set forth in clause (i) or it is not
available to them, the Corporation shall be required to pay to the Holder of
each share of Series C Preferred Stock seeking to convert such share an amount
per share of Class A Common Stock in cash equal to 110% of the Current Market
Price of the Class A Common Stock as of the date of such conversion (the
"Conversion Payments"). In the event that a special meeting is held pursuant to
clause (i) in the preceding sentence and the stockholders fail to authorize the
requisite number of additional shares of Class A Common Stock, each Holder
requesting said special meeting of the stockholders may either retract the
exercise of its conversion right or choose to accept a Conversion Payment as
provided above. The right to convert a share of Series C Preferred Stock called
for redemption shall terminate at the close of business on the Redemption Date
for such Series C Preferred Stock; provided however that in the event that
shares to be converted are called for redemption during the pendency of the
meeting described in clause (i) above, then Holders of such shares may elect to
accept the Conversion Payment by giving notice thereof to the Corporation.
(b) The right of conversion attaching to any share of Series C
Preferred Stock may be exercised by the Holder thereof by delivering the share
of Series C Preferred Stock to be converted to the office of the Conversion
Agent, accompanied by a duly signed and completed notice of conversion in form
reasonably satisfactory to the Conversion Agent. The "Conversion Date" will be
the date on which the share of Series C Preferred Stock and the duly signed and
completed notice of conversion are so delivered. As promptly as practicable on
or after the Conversion Date (but not more than three (3) trading days
thereafter), the Corporation shall issue and deliver to the Conversion Agent a
certificate or certificates for the number of full shares of Class A Common
Stock issuable upon conversion, together with payment in cash, determined as
provided below, in lieu of any fraction of a share. Such certificate or
certificates shall be delivered by the Conversion Agent to the appropriate
Holder by mailing certificates evidencing the shares of Class A Common Stock to
such Holders at its address set forth in the register of Holders maintained by
the Transfer Agent. All shares of Class A Common Stock issuable upon conversion
of the Series C Preferred Stock shall be fully paid and nonassessable and shall
rank pari passu with the other shares of Class A Common Stock outstanding from
time to time. Any Series C Preferred Stock surrendered for conversion during the
period from the close of business on any Record Date to the opening of business
on the next succeeding Dividend Payment Date must be accompanied by payment of
an amount equal to the dividends declared and payable on such Dividend Payment
Date on the Series C Preferred Stock being surrendered for conversion. In the
case of any Series C Preferred Stock that has been converted after any Record
Date but before the next Dividend Payment Date, dividends that are declared and
payable on such Dividend Payment Date shall be payable on such Dividend Payment
Date notwithstanding such conversion, and such dividends shall be paid to the
Holder of such Series C Preferred Stock on such Record Date. No other payment or
adjustment for dividends, or for any dividends in respect of shares of Class A
Common Stock, shall by made upon conversion. Holders of Class A Common Stock
issued upon conversion shall not be entitled to receive any dividends payable to
holders of Class A Common Stock as of any record time before the close of
business on the Conversion Date.
(c) The Corporation shall not issue a fractional share of
Class A Common Stock upon conversion of Series C Preferred Stock. Instead the
Corporation shall deliver a check for an amount equal to the applicable fraction
of a share multiplied by the Current Market Price of the Class A Common Stock
calculated as of the close of business on the Conversion Date, rounded to the
nearest cent.
(d) A Holder delivering Series C Preferred Stock for
conversion will not be required to pay any taxes or duties in respect of the
issue or delivery of Class A Common Stock on conversion but will be required to
pay any tax or duty that may be payable in respect of any transfer involved in
the issue or delivery of the shares of Class A Common Stock in a name other than
that of the Holder of the Series C Preferred Stock. Certificates representing
shares of Class A Common Stock will not be issued or delivered unless all taxes
and duties, if any, payable by the Holder have been paid.
(e) The Corporation has reserved and shall continue to reserve
out of its authorized but unissued Class A Common Stock or its Class A Common
Stock held in treasury enough shares of Class A Common Stock to permit the
conversion of at least 100,000 shares of Series C Preferred Stock in full and
shall, as soon as practical, reserve and continue to reserve out of its
authorized but unissued Class A Common Stock held in treasury enough shares of
Class A Common Stock to permit the conversion of any other outstanding shares of
Series C Preferred Stock in full, assuming, in each case, that such conversion
took place at the Conversion Rate in effect from time to time (provided that
such reservation shall be proportionally reduced as shares of Series C Preferred
Stock are repurchased, redeemed, converted, exchanged or retired). All shares of
Class A Common Stock that may be issued upon conversion of Series C Preferred
Stock shall be fully paid and nonassessable. The Corporation shall take all
commercially reasonable steps to comply with all securities laws regulating the
offer and delivery of shares of Class A Common Stock upon conversion of Series C
Preferred Stock and shall take all commercially reasonable steps to list such
shares on each national securities exchange on which the Class A Common Stock is
listed.
(f) If the Corporation:
(i) pays a dividend (or makes a distribution) on
its Class A Common Stock in shares of its Class A Common Stock;
(ii) subdivides its outstanding shares of Class A
Common Stock into a greater number of shares;
(iii) combines its outstanding shares of Class A
Common Stock into a smaller number of shares; or
(iv) issues any shares of its Capital Stock by
reclassification of its Class A Common Stock;
then the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Holder of each share of Series C Preferred Stock thereafter
converted may receive the number of shares of Capital Stock of the Corporation
that such Holder would have owned immediately following such action if such
Holder had converted Series C Preferred Stock immediately prior to such action.
The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution and immediately after the effective date of a
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(g) If the Corporation distributes any Rights to all holders
of its Class A Common Stock entitling them to purchase shares of Class A Common
Stock and/or Class B Common Stock at a price per share that is less than the
Conversion Price on the date of distribution of such Rights, the Conversion
Price shall be reduced in accordance with the formula:
C' = C x ((O + ((N x P) / C)) / (O + N))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common
Stock and Class B Common Stock outstanding
on the record date for the distribution.
N = the number of additional shares of Class A
Common Stock and/or Class B Common Stock
offered.
P = the offering price per share of the
additional shares of Class A Common Stock
and/or Class B Common Stock.
The adjustment shall be made successively whenever any such Rights are issued
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such Rights. If at the end of
the period during which such Rights are exercisable, not all Rights shall have
been exercised, the Conversion Price shall be immediately readjusted to what it
would have been if "N" in the above formula had been the number of shares
actually issued.
(h) If the Corporation distributes to all holders of shares of
its Class A Common Stock (i) any shares of any class of Capital Stock of the
Corporation other than its Class A Common Stock, (ii) any evidence of
indebtedness or other securities of the Corporation or any Subsidiary of the
Corporation, or (iii) cash or any other assets of the Corporation (including
securities, but excluding those dividends, Rights and distributions referred to
above in this Section 4 and in Section 4(i) and Section 4(j), dividends and
distributions paid exclusively in cash and distributions upon mergers or
consolidations to which Section 4(m) applies), the Conversion Price shall be
reduced in accordance with the formula:
C' = C - F
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
F = the fair market value on the record date
of the Capital Stock, indebtedness, other
securities, cash or other assets distributed
per share of Class A Common Stock.
The adjustment shall be made successively whenever any such distribution is made
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
(i) If the Corporation issues shares of Class A Common Stock
and/or Class B Common Stock for a consideration per share less than the
Conversion Price per share on the date the Corporation issues such additional
shares, the Conversion Price shall be reduced in accordance with the formula:
C' = C x ((O + (P / C)) / A)
where:
C = the then current Conversion Price.
O = the number of shares of Class A Common Stock
and Class B Common Stock outstanding
immediately prior to the issuance of such
additional shares.
P = the aggregate consideration received for the
issuance of such additional
shares.
A = the number of shares Class A Common Stock
and Class B Common Stock outstanding
immediately after the issuance of such
additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This Section 4(i) does not apply to (i) any transaction or issuance described in
Section 4(g) or 4(h) above or Section 4(j) below, (ii) the conversion of Series
C Preferred Stock or Class B Common Stock or the conversion, exchange or
exercise of securities issued in transactions that were subject to Sections 4(g)
or 4(h) above, (iii) Class A Common Stock or Class B Common Stock issued to the
Corporation's employees under bona fide employee benefit plans adopted by the
Board of Directors of the Corporation and approved by the holders of Class A
Common Stock and/or Class B Common Stock when required by law, (iv) Class A
Common Stock or Class B Common Stock issued to acquire, or in the acquisition
of, all or any portion of a business as a going concern, in an arm's-length
transaction between the Corporation and an unaffiliated third party, whether
such acquisition shall be effected by purchase of assets, exchange of
securities, merger, consolidation or otherwise, (v) Class A Common Stock or
Class B Common Stock issued in a bona fide public offering pursuant to a firm
commitment underwriting or (vi) Class A Common Stock or Class B Common Stock
issued to lenders or bond purchasers that are unaffiliated third parties in any
financing transaction on arm's-length terms (collectively, "Exempt Issuances").
(j) If the Corporation issues any Rights (other than Series C
Preferred Stock or Class B Common Stock or securities issued in transactions
described in Section 4(g) or Section 4(h)) and for a consideration per share of
Class A Common Stock and/or Class B Common Stock initially deliverable upon
conversion, exchange or exercise of such Rights that is less than the Conversion
Price per share on the date of issuance of such Rights, the Conversion Price
shall be reduced in accordance with the formula:
C' = C x ((O + (P / C)) / (O + D))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common
Stock and Class B Common Stock outstanding
immediately prior to the issuance of such
Rights.
P = the aggregate consideration received for
the issuance of such Rights plus the
aggregate consideration payable upon
exercise of all such Rights.
D = the maximum number of shares deliverable
upon conversion or in exchange for or upon
exercise of such Rights at the initial
conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance. If
all of the Class A Common Stock and/or Class B Common Stock deliverable upon
conversion, exchange or exercise of such Rights has not been issued when such
Rights are no longer outstanding, then the Conversion Price shall promptly be
readjusted to the Conversion Price that would then be in effect had the
adjustment upon the issuance of such Rights been made on the basis of the actual
number of shares of Class A Common Stock and/or Class B Common Stock issued upon
conversion, exchange or exercise of such Rights. This Section 4(j) does not
apply to any transaction that would be an Exempt Issuance if shares of Class A
Common Stock or Class B Common Stock were issued instead of Rights.
(k) In case the Corporation or any of its Subsidiaries shall,
by dividend or otherwise, make distributions exclusively in cash (excluding any
cash that is distributed upon a merger or consolidation to which Section 4(h)
applies) to all the holders of its Class A Common Stock in an aggregate amount
that, combined together with (i) the aggregate amount of all other such all-cash
distributions to all holders of its Class A Common Stock made within the 12
months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this Section 4(g) has been made and (ii) the
aggregate of any cash plus the fair market value of other consideration payable
in respect of any tender or exchange offer or other stock repurchase program by
the Corporation or any of its Subsidiaries for all or any portion of the Class A
Common Stock concluded within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to this Section
4(g) has been made, exceeds 10% of the Corporation's Market Capitalization on
the record date for such distribution then, and in each such case, immediately
after the close of business on such date of such distribution, the Conversion
Price shall be reduced in accordance with the formula:
C' = C - E
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
E = the total of such combined amount of such
dividends and distributions per share of
Class A Common Stock.
(l) In the case of the consummation of a tender offer,
exchange offer (other than an odd-lot offer) or other stock repurchase program
made by the Corporation or any Subsidiary thereof for all or any portion of the
Class A Common Stock and/or Class B Common Stock involving the payment by the
Corporation or such Subsidiary of an aggregate consideration that, together with
(i) any cash or other consideration payable in a tender offer, exchange offer or
other stock repurchase program by the Corporation or any of its Subsidiaries for
Class A Common Stock and/or Class B Common Stock consummated within 12 months
preceding the consummation of such tender offer, exchange offer or other stock
repurchase program (the "Expiration Time") in respect of which no adjustment has
been made pursuant to this Section 4(l) or Section 4(k) and (ii) the aggregate
amount of all such all-cash distributions referred to in Section 4(k) above to
all holders of Class A Common Stock and/or Class B Common Stock within the 12
months preceding such Expiration Time in respect of which no adjustments have
been made, exceeds 10% of the Corporation's Market Capitalization as of the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
reduced in accordance with the formula:
C' = C x ((M - E) / N)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Conversion Price on the Trading Day
next succeeding the expiration Time times
the number of shares of Class A Common Stock
and Class B Common Stock outstanding at the
Expiration Time (including any tendered,
exchanged or purchased shares).
N = The Conversion Price on the Trading Day
next succeeding the Expiration Time times
the number of shares of the Class A Common
Stock and Class B Common Stock outstanding
at the Expiration Time (less any shares
purchased in such tender offer, exchange
offer or other stock repurchase program).
E = the total of such combined amount of
payments and distributions described in the
first paragraph of this Section 4(l).
The reduction shall become effective immediately prior to the
opening of business on the day following the Expiration Time.
(m) In case of any consolidation, amalgamation, arrangement or
merger of the Corporation with or into another person or any merger of another
person with or into the Corporation (other than a merger that does not result in
any reclassification, conversion, exchange or cancellation of any class or
series of the Common Equity), or in case of any sale or transfer of all or
substantially all of the assets of the Corporation, each share of Series C
Preferred Stock then outstanding will, without the consent of the Holder of any
Series C Preferred Stock, become convertible only into the kind and amount of
securities, cash and other property receivable upon such consolidation,
amalgamation, arrangement, merger, sale or transfer by a Holder of the number of
shares of Class A Common Stock (and other securities, if applicable) into which
such Series C Preferred Stock was convertible immediately prior thereto
(assuming such holder of Class A Common Stock (and other securities, if
applicable) failed to exercise any rights of election and that such Series C
Preferred Stock was then convertible).
(n) In addition, in the event that any other transaction or
event occurs as to which the foregoing conversion price adjustment provisions
are not strictly applicable but the failure to make any adjustment would
adversely affect the conversion rights represented by the Series C Preferred
Stock in accordance with the essential intent and principles of such provisions,
then, in each such case, either (i) the Corporation shall appoint an investment
banking firm of recognized national standing, or any other financial expert that
does not (or whose directors, officers, employees, affiliates or stockholders do
not) have a direct or material indirect financial interest in the Corporation or
any of its Subsidiaries, who has not been, and, at the time it is called upon to
give independent financial advice to the Corporation, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Corporation or any of its Subsidiaries, which will
give their opinion upon or (ii) the Board of Directors shall determine,
consistent with the Board of Directors' fiduciary duties to the Corporation's
stockholders, the adjustment, if any, on a basis consistent with the essential
intent and principles established in the foregoing conversion price adjustment
provisions, necessary to preserve, without dilution, the conversion rights
represented by the Series C Preferred Stock. Upon receipt of such opinion or
determination, the Corporation shall promptly mail a copy thereof to the Holders
of the Series C Preferred Stock and will make the adjustments described therein.
(o) For purposes of any computation respecting consideration
received pursuant to a transaction described or contemplated by this Section 4,
the following shall apply:
(i) in the case of the issuance of shares of Class A
Common Stock or Class B Common Stock for cash, the consideration shall
be the amount of such cash, provided that in no case shall any
deduction be made for any commissions, discounts or other expenses
incurred by the Corporation for any underwriting of the issue or
otherwise in connection therewith;
(ii) in the case of the issuance of shares of Class A
Common Stock or Class B Common Stock for a consideration in whole or in
part other than cash, the consideration other than cash shall be deemed
to be the fair market value thereof (irrespective of the accounting
treatment thereof);
(iii) whenever this Certificate of Designations calls
for the determination of "fair market value," such fair market value
shall be determined in good faith by the Board of Directors of the
Corporation and as evidenced by a written resolution thereof; and
(iv) in the case of the issuance of Rights, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Corporation for the issuance of such
Rights plus the additional minimum consideration, if any, to be
received by the Corporation upon the conversion or exchange or exercise
thereof (the consideration in each case to be determined in the same
manner as provided in this Section 4(o)).
(p) No adjustment in the Conversion Price need be made unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Price. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 4 shall be made to the nearest one hundredth of a cent or to the nearest
1/1000th of a share, as the case may be. No adjustment formula set forth in this
Section 4 shall be applied to result in an increase in the Conversion Price.
(q) No adjustment in the Conversion Price need be made under
this Section 4 for (i) rights to purchase Class A Common Stock or Class B Common
Stock pursuant to a Corporation plan for reinvestment of dividends or interest,
or (ii) any change in the par value or no par value of the Class A Common Stock
or Class B Common Stock, and in no event shall any adjustment made under this
Section 4 that would reduce the Conversion Price below the par value of the
Class A Common Stock. If an adjustment is made to the Conversion Price upon the
establishment of a record date for a distribution subject to Sections 4(g) or
4(h) above and if such distribution is subsequently cancelled, the Conversion
Price then in effect shall be readjusted, effective as of the date when the
Board of Directors of the Corporation determines to cancel such distribution, to
the Conversion Price that would have been in effect if such record date had not
been fixed. No adjustment in the Conversion Price need be made under Sections
4(g) and 4(h) above if the Corporation issues or distributes to each Holder of
Series C Preferred Stock the shares of Class A Common Stock, Class B Common
Stock, evidences of indebtedness, assets or Rights referred to in those Sections
that each Holder would have been entitled to receive had the Series C Preferred
Stock been converted into Class A Common Stock prior to the happening of such
event or the record date with respect thereto.
(r) The Corporation shall provide to Holders of Series C
Preferred Stock reasonable notice of any event that would result in an
adjustment to the Conversion Price pursuant to any of the adjustments in this
Section 4 so as to permit the Holders to effect a conversion of shares of Series
C Preferred Stock into shares of Class A Common Stock prior to the occurrence of
such event. The Corporation shall file with the Transfer Agent a certificate
from the Corporation's independent public accountants briefly stating the facts
requiring the adjustment and the manner of computing it. Subject to Section 4(v)
below, the certificate shall be conclusive evidence that the adjustment is
correct.
(s) The Corporation from time to time may reduce the
Conversion Price by any amount for any period of time if the period is at least
20 Business Days and if the reduction is irrevocable during the period, but in
no event may the Conversion Price be less than the par value of a share of Class
A Common Stock. Whenever the Conversion Price is reduced, the Corporation shall
mail to holders of Series C Preferred Stock a notice of the reduction. The
Corporation shall mail, first class, postage prepaid, the notice at least 15
days before the date the reduced conversion price takes effect. The notice shall
state the reduced conversion price and the period it will be in effect. A
reduction of the Conversion Price does not change or adjust the Conversion Price
otherwise in effect for purposes of Sections 4(f), 4(g), 4(h), 4(i), 4(j), 4(k)
and 4(l) above.
(t) If:
(i) the Corporation takes any action which would
require an adjustment in the Conversion Price pursuant to Section 4(g)
or 4(h) above, or clause (iv) of Section 4(f) above;
(ii) the Corporation consolidates or merges with,
or transfers all or substantially all of its assets to, another
corporation, and stockholders of the Corporation must approve the
transaction; or
(iii) there is a dissolution or liquidation of the
Corporation;
a holder of Series C Preferred Stock may want to convert such stock into shares
of Class A Common Stock prior to the record date for or the effective date of
the transaction so that he may receive the rights, warrants, securities or
assets which a holder of shares of Class A Common Stock on that date may
receive. Therefore, the Corporation shall mail to such holders, first class,
postage prepaid, a notice stating the proposed record or effective date, as the
case may be. The Corporation shall mail the notice at least ten days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (i), (ii) or (iii) of this
Section 4(t).
(u) In any case in which this Section 4 shall require that an
adjustment as a result of any event become effective from and after a record
date, the Corporation may elect to defer until after the occurrence of such
event (i) the issuance to the holder of any shares of Series C Preferred Stock
converted after such record date and before the occurrence of such event of the
additional shares of Class A Common Stock issuable upon such conversion over and
above the shares issuable on the basis of the Conversion Price in effect
immediately prior to adjustment and (ii) a check for any remaining fractional
shares of Class A Common Stock as provided in Section 4(c) above.
(v) Except as provided in the immediately following sentence,
any determination that the Corporation or its Board of Directors must make
pursuant to this Section 4 shall be conclusive. Whenever the Corporation or its
Board of Directors shall be required to make a determination under this Section
4, such determination shall be made in good faith and may be challenged in good
faith by the Holders of a majority of the outstanding shares of Series C
Preferred Stock (with shares held by the Corporation or any of its Affiliates
not being considered to be outstanding for this purpose), and any dispute shall
be resolved by an investment banking firm of recognized national standing
selected by the Corporation and acceptable to such Holders of Series C Preferred
Stock. If such investment banking firm resolves that the adjustment should have
been more favorable to the Holders, the Corporation shall bear the costs of such
firm and if such investment banking firm resolves that such determination was
correct or should have been less favorable to the Holders, the Holders
challenging such determination shall bear the costs of such firm.
(w) All shares of Series C Preferred Stock converted pursuant
to this Section 4 shall be retired and shall be restored to the status of
authorized and unissued shares of convertible exchangeable preferred stock,
without designation as to series and may thereafter be reissued as shares of any
series of convertible exchangeable preferred stock other than Series C Preferred
Stock.
(x) Overdue Conversion Payments shall bear interest at
the rate of 13% per annum.
(y) Except as set forth in this Section 4, none of the
adjustments described in this Section 4 shall duplicate adjustments previously
made or made simultaneously pursuant to other subsections of this Section 4, or
otherwise double count any transaction.
5. Redemption at the Corporation's Option.
(a) The Series C Preferred Stock may be redeemed, in whole or
in part, at the option of the Corporation at any time on or after August 1,
2000, at the Applicable Redemption Price.
(b) In case of redemption of less than all of the shares of
Series C Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Corporation in its
sole discretion.
(c) Notice of any redemption shall be sent by or on behalf of
the Corporation not more than 60 days nor less than 30 days prior to the date
specified for redemption in such notice (the "Redemption Date"), by first class
mail, postage prepaid, to all Holders of record of the Series C Preferred Stock
at their respective last addresses as they shall appear on the books of the
Corporation; provided, however, that no failure to give such notice or any
defect therein or in the mailing thereof shall affect the validity of the
proceedings for the redemption of any shares of Series C Preferred Stock except
as to the Holder to whom the Corporation has failed to give notice or except as
to the Holder to whom notice was defective. In addition to any information
required by law or by the applicable rules of any exchange or quotation system
upon which Series C Preferred Stock may be listed or admitted to trading, such
notice shall state: (i) whether such redemption is being made pursuant to the
optional or the mandatory redemption provisions hereof; (ii) the Redemption
Date; (iii) the Applicable Redemption Price; (iv) the number of shares of Series
C Preferred to be redeemed and, if less than all shares held by such Holder are
to be redeemed, the number of such shares to be redeemed; (v) the place or
places where certificates for such shares are to be surrendered for payment of
the Applicable Redemption Price, including any procedures applicable to
redemptions to be accomplished through book-entry transfers; (vi) that dividends
on the shares to be redeemed will cease to accrue on the Redemption Date; (vii)
the Conversion Price; (viii) that Series C Preferred Stock called for redemption
may be converted at any time before the close of business on the Redemption
Date; and (ix) that Holders of Series C Preferred Stock must satisfy the
requirements of Section 4(b) above if such Holders desire to convert such
shares. Upon the mailing of any such notice of redemption, the Corporation shall
become obligated to redeem at the time of redemption specified thereon all
shares called for redemption.
(d) If notice has been mailed in accordance with Section 5(c)
above and provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds in trust for the pro rata
benefit of the Holders of the shares so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the Redemption Date,
dividends on the shares of the Series C Preferred Stock so called for redemption
shall cease to accrue, and said shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Series C Preferred Stock,
and all rights of the Holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the Applicable Redemption Price) shall
cease. Upon surrender, in accordance with said notice, of the certificates for
any shares so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the Applicable Redemption Price. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate or certificates shall be issued representing the unredeemed shares
without cost to the Holder thereof.
(e) Any funds deposited with a bank or trust company for the
purpose of redeeming Series C Preferred Stock shall be irrevocable except that:
(i) the Corporation shall be entitled to receive from
such bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the Holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(ii) any balance of monies so deposited by the
Corporation and unclaimed by the Holders of the Series C Preferred
Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any interest
or other earnings earned thereon, to the Corporation, and after any
such repayment, the Holders of the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for
payment without interest or other earnings.
(f) No Series C Preferred Stock may be redeemed except with
funds legally available for the purpose. The Corporation shall take all actions
required or permitted under Delaware Law to permit any such redemption.
(g) Notwithstanding the foregoing provisions of this Section
5, unless the full cumulative dividends on all outstanding shares of Series C
Preferred Stock shall have been paid or contemporaneously are declared and paid
for all past dividend periods, none of the shares of Series C Preferred Stock
shall be redeemed unless all outstanding shares of Series C Preferred Stock are
simultaneously redeemed.
(h) All shares of Series C Preferred Stock redeemed pursuant
to this Section 5 shall be restored to the status of authorized and unissued
shares of preferred stock, without designation as to series and may thereafter
be reissued as shares of any series of preferred stock other than shares of
Series C Preferred Stock.
6. Voting Rights.
(a) The Holders of record of shares of Series C Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 6 or as otherwise provided by law.
(b) If and upon:
(i) the accumulation of accrued and unpaid dividends
on the outstanding Series C Preferred Stock in an amount equal to six
(6) full quarterly dividends (whether or not consecutive);
(ii) the failure of the Corporation to honor its
obligations with respect to any share of Series C Preferred Stock upon
conversion thereof pursuant to Section 4 hereof;
(iii) in the event that all shares of Series C
Preferred Stock have not been converted into shares of Class A Common
Stock by August 1, 2009, the Series C Preferred Stock shall not have
been redeemed by the Corporation by such date in accordance with
Section 5;
(iv) the failure of the Corporation to comply with
any of the other covenants or agreements set forth in this Certificate
of Designations and the continuance of such failure for 45 consecutive
days or more (each of the events described in clauses 6(b)(i) through
(iv) being referred to herein as a "Voting Rights Trigger Event");
then the authorized number of members of the Corporation's Board of Directors
will be immediately and automatically increased by two, and the Holders of a
majority of the outstanding shares of Series C Preferred Stock, voting
separately as a class, shall be entitled to elect two directors of the
Corporation.
(c) Whenever such voting right shall have vested, such right
may be exercised initially either by written consent or at a special meeting of
the Holders of Series C Preferred Stock, called as hereinafter provided, or at
any annual meeting of stockholders held for the purpose of electing directors,
and thereafter at such annual meetings or by the written consent of the Holders
of Series C Preferred Stock. Such right of the Holders of Series C Preferred
Stock to elect directors may be exercised until (i) all dividends in arrears
shall have been paid in full and (ii) all other Voting Rights Trigger Events
have been cured or waived, at which time the right of the Holders of Series C
Preferred Stock to elect such number of directors shall cease, the term of such
directors previously elected shall thereupon terminate at the end of the quarter
first commencing after such voting rights terminate, and the authorized number
of directors of the Corporation shall thereupon return to the number of
authorized directors otherwise in effect, but subject always to the same
provisions for the renewal and divestment of such special voting rights in the
case of any such future Voting Rights Trigger Events.
(d) At any time when such voting right shall have vested in
the Holders of Series C Preferred Stock and if such right shall not already have
been initially exercised, a proper officer of the Corporation shall, upon the
written request of Holders of record of 10% or more of the Series C Preferred
Stock then outstanding, addressed to the Secretary of the Corporation, call a
special meeting of Holders of Series C Preferred Stock. Such meeting shall be
held at the earliest practicable date upon the notice required for annual
meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place designated by a
majority-in-interest of the Holders of Series C Preferred Stock requesting such
meeting. If such meeting shall not be called by the proper officers of the
Corporation within 30 days after the personal service of such written request
upon the Secretary of the Corporation, or within 30 days after mailing the same
within the United States, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the Holders of record
of 10% of the shares of Series C Preferred Stock then outstanding may designate
in writing a Holder of Series C Preferred Stock to call such meeting at the
expense of the Corporation, and such meeting may be called by such person so
designated upon the notice required for annual meetings of stockholders and
shall be held at the place for holding annual meetings of the Corporation or, if
none, at a place designated by such Holder. Any Holder of Series C Preferred
Stock that would be entitled to vote at such meeting shall have access to the
stock books of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this Section.
Notwithstanding the provisions of this paragraph, however, no such special
meeting shall be called if any such request is received less than 90 days before
the date fixed for the next ensuing annual or special meeting of stockholders.
The Corporation shall pay all expenses incurred in connection with holding such
special meeting and all reasonable expenses incurred in connection with the
solicitation of votes or proxies from the Holders of the Series C Preferred
Stock. Any director elected pursuant to this Section 6(d) shall be entitled to
receive the same fees and reimbursement of expenses as may be provided to the
rest of the directors of the Corporation.
(e) If a director so elected by the Holders of Series C
Preferred Stock shall cease to serve as a director before his term shall expire,
the Holders of Series C Preferred Stock then outstanding may, at a special
meeting of the Holders called as provided above, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
(f) The Corporation shall not, without the affirmative vote or
consent of the Holders of a majority of the then outstanding shares of Series C
Preferred Stock (with shares held by the Corporation not being considered to be
outstanding for this purpose):
(i) authorize, create (by way of reclassification or
otherwise) or issue any Parity Securities, or any obligation or
security convertible into or evidencing the right to purchase any
Parity Securities (except for issuances as provided in the
Corporation's Certificate of Designations as in effect on the Initial
Issue Date with respect to its Series A Preferred Stock and its Series
B Preferred Stock); provided that the redesignation of the Company's
unissued Series B Preferred Stock as Series A Preferred Stock, or of
its unissued or issued but not outstanding Series A Preferred Stock for
the purpose of paying pay-in-kind dividends on either its Series A
Preferred Stock or its Series B Preferred Stock shall not require the
consent of the Holders of the Series C Preferred Stock as provided in
this Section 6; or
(ii) amend or otherwise alter its Certificate of
Incorporation in any manner that adversely affects the rights of
Holders of Series C Preferred Stock or the holders of Class A Common
Stock.
(g) Without the consent of each Holder affected, an amendment
or waiver may not (with respect to any shares of Series C Preferred Stock held
by a non-consenting Holder):
(i) alter the voting rights with respect to the
Series C Preferred Stock or reduce the number of shares of Series C
Preferred Stock whose Holders must consent to an amendment, supplement
or waiver;
(ii) alter the provisions with respect to the
redemption of the Series C Preferred Stock or waive a redemption
payment with respect to any share of Series C Preferred Stock;
(iii) reduce the Liquidation Preference of any
share of Series C Preferred Stock;
(iv) reduce the rate of or change the time for
payment of dividends on any share of Series C Preferred Stock;
(v) alter the provisions with respect to the
conversion rights of the Series C Preferred Stock;
(vi) waive a default or event of default in the
payment of dividends (if any) on the Series C Preferred Stock;
(vii) make any share of Series C Preferred Stock
payable in money other than that stated in this Certificate of
Designations;
(viii) make any change in the provisions of this
Certificate of Designations relating to waivers of the rights of
Holders of Series C Preferred Stock to receive the Liquidation
Preference, dividends (if any) on the Series C Preferred Stock; or
(viii) make any change in the foregoing amendment
and waiver provisions.
(h) The Corporation shall not, without the consent of at least
66-2/3% of the then outstanding shares of Series C Preferred Stock (with shares
held by the Corporation not being considered to be outstanding for this
purpose), authorize, create (by way of reclassification or otherwise) or issue
any Senior Securities or any obligation or security convertible or exchangeable
into or evidencing a right to purchase, shares of any class or series of Senior
Securities.
(i) The Corporation in its sole discretion may without the
vote or consent of any Holders of the Series C Preferred Stock amend or
supplement this Certificate of Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) to provide for uncertificated Series C
Preferred Stock in addition to or in place of certificated Series C
Preferred Stock; or
(iii) to make any change that would provide any
additional rights or benefits to the Holders of the Series C Preferred
Stock or that does not adversely affect the legal rights or benefits
under this Certificate of Designations of any such Holder.
7. Certain Covenants.
(a) Payments for Consent. Neither the Corporation nor any of
its Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of dividend or other distribution, fee or
otherwise, to any Holder of any Series C Preferred Stock for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Certificate of Designations or the Series C Preferred Stock unless such
consideration is offered to be paid and is paid to all Holders of the Series C
Preferred Stock that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
(b) Reports.
(i) Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the
"Commission"), so long as any shares of Series C Preferred Stock are
outstanding, the Corporation shall furnish to the Holders of Series C
Preferred Stock (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Corporation were required to file such
Forms, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Corporation's certified
independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Corporation
were required to file such reports. In addition, whether or not
required by the rules and regulations of the Commission, the
Corporation shall file a copy of all such information and reports with
the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, for so
long as any Series C Preferred Stock remains outstanding, the
Corporation shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(ii) The Corporation shall deliver to the Holders,
within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Corporation
and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with a view to
determining whether the Corporations has kept, observed, performed and
fulfilled its obligations under this Certificate of Designations and
further stating, as to each such officer signing such certificate, that
to the best of his or her knowledge the Corporation has kept, observed,
performed and fulfilled each and every covenant contained in this
Certificate of Designations and is not in default in the performance or
observance of any of the terms, provisions and conditions of this
Certificate of Designations (or, if any such default shall have
occurred, describing all such defaults of which he or she may have
knowledge and what action the Corporation is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments
on account of the Liquidation Preference of or dividends, if any, on
the Series C Preferred Stock is prohibited or if such event has
occurred, a description of the event and what action the Corporation is
taking or proposes to take with respect thereto.
(iii) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 7(b)(i) above shall be accompanied by a written statement of
the Corporation's independent public accountants (who shall be a firm
of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has
come to their attention that would lead them to believe that the
Corporation has violated any provisions of this Certificate of
Designations or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person
for any failure to obtain knowledge of any such violation.
(iv) The Corporation shall, so long as any of the
shares of Series C Preferred Stock are outstanding, deliver to the
Holders, forthwith upon any Executive Officer of the Corporation
becoming aware of any default under this Certificate of Designations,
an Officers' Certificate specifying such default and what action the
Corporation is taking or proposes to take with respect thereto.
(c) Conflicts with By-laws. If any provisions of the
Corporation's By-laws conflict in any way with this Certificate of Designations,
the Corporation shall, so long as any of the shares of Series C Preferred Stock
are outstanding, take all necessary actions to amend such By-laws and thereby
resolve the conflict.
8. Payment and Conversion.
(a) All amounts payable in cash with respect to the Series C
Preferred Stock shall be payable in United States dollars at the office or
agency of the Corporation maintained for such purpose within the City and State
of New York or, at the option of the Corporation, payment of dividends (if any)
may be made by check mailed to the Holders of the Series C Preferred Stock at
their respective addresses set forth in the register of Holders of Series C
Preferred Stock maintained by the Transfer Agent, provided that all cash
payments with respect to the Global Shares (as defined below) and shares of
Series C Preferred Stock the Holders of which have given wire transfer
instructions to the Corporation will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
Unless otherwise designated by the Corporation, the Corporation's office or
agency in New York shall be the office of the Paying Agent maintained for such
purpose.
(b) Any payment on the Series C Preferred Stock due on any day
that is not a Business Day need not be made on such day, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
due date.
(c) The Corporation has initially appointed the Transfer Agent
to act as the Paying Agent and Conversion Agent. The Corporation may at any time
terminate the appointment of any Paying Agent or Conversion Agent and appoint
additional or other Paying Agents and Conversion Agents, provided that until the
Series C Preferred Stock has been delivered to the Corporation for cancellation,
or moneys sufficient to pay the Liquidation Preference and accrued dividends (if
any) on the Series C Preferred Stock have been made available for payment and
either paid or returned to the Corporation as provided in this Certificate of
Designations, it shall maintain an office or agency in the Borough of Manhattan,
The City of New York for surrender of Series C Preferred Stock for conversion.
(d) All moneys deposited with any Paying Agent or then held by
the Corporation in trust for the payment of the Liquidation Preference and
dividends (if any) on any shares of Series C Preferred Stock which remain
unclaimed at the end of two years after such payment has become due and payable
will be repaid to the Corporation, and the Holder of such shares of Series C
Preferred Stock will thereafter look only to Corporation for payment thereof.
9. Officers' Certificate.
Each Officers' Certificate provided for in this Certificate of
Designations shall include:
(a) a statement that the officer making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such officer, he or
she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such officer, such condition or covenant has been satisfied.
10. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of
Series C Preferred Stock shall not have any voting powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate of Designations (as such Certificate
of Designations may be amended from time to time) and in the Certificate of
Incorporation. The shares of Series C Preferred Stock shall have no preemptive
or subscription rights.
11. Headings of Subdivisions.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
12. Severability of Provisions.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed herein.
[The remainder of this page is intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be duly executed by Timothy J. Rigas, Executive Vice President
and Chief Financial Officer, and attested by Colin Higgin, its assistant
secretary, this 2nd day of July, 1997.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President and
Chief Financial Officer
ATTEST:
By: /s/ Colin Higgin
Colin Higgin
Assistant Secretary
1. This paragraph should be included only if the Note is issued in global form.
2. This should be included only if the Note is issued in global form.
ADELPHIA COMMUNICATIONS CORPORATION
Up To $250,000,000
10 1/2% Senior Notes Due 2004
INDENTURE
Dated as of July 7, 1997
BANK OF MONTREAL TRUST COMPANY,
Trustee
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
<S> <C>
310(a)(1)-----------------------------------------------------------------------------------7.10
(a)(2---------------------------------------------------------------------------------7.10
(a)(3)--------------------------------------------------------------------------------N.A.
(a)(4)--------------------------------------------------------------------------------N.A.
(b)-----------------------------------------------------------------------------------7.08;7.10;11.02
(b)(1)--------------------------------------------------------------------------------7.10
(b)(9)--------------------------------------------------------------------------------7.10
(c)---------------------------------------------------------------------------------- N.A.
311(a)--------------------------------------------------------------------------------------7.11
(b)-----------------------------------------------------------------------------------7.11
(c)-----------------------------------------------------------------------------------N.A.
312(a)--------------------------------------------------------------------------------------2.05
(b)-----------------------------------------------------------------------------------11.03
(c)-----------------------------------------------------------------------------------11.03
313(a)--------------------------------------------------------------------------------------7.06
(b)(1)--------------------------------------------------------------------------------7.06
(b)(2)--------------------------------------------------------------------------------7.06
(c)-----------------------------------------------------------------------------------7.06, 11.02
(d)-----------------------------------------------------------------------------------7.06
314(a)--------------------------------------------------------------------------------------4.02;11.02
(b)-----------------------------------------------------------------------------------N.A.
(c)(1)--------------------------------------------------------------------------------11.04;11.05
(c)(2)--------------------------------------------------------------------------------11.04;11.05
(c)(3)--------------------------------------------------------------------------------N.A.
(d)-----------------------------------------------------------------------------------N.A.
(e)-----------------------------------------------------------------------------------11.05
(f)-----------------------------------------------------------------------------------N.A.
315(a)--------------------------------------------------------------------------------------7.01;7.02
(b)-----------------------------------------------------------------------------------7.05;11.02
(c)-----------------------------------------------------------------------------------7.01
(d)-----------------------------------------------------------------------------------6.05;7.01;7.02
(e)-----------------------------------------------------------------------------------6.11
316(a) (last sentence)----------------------------------------------------------------------11.06
(a)(1)(A)-----------------------------------------------------------------------------6.05
(a)(1)(B)-----------------------------------------------------------------------------6.04
(a)(2)--------------------------------------------------------------------------------8.02
(b)-----------------------------------------------------------------------------------6.07
317(a)(1)-----------------------------------------------------------------------------------6.08
(a)(2)--------------------------------------------------------------------------------6.09
(b)-----------------------------------------------------------------------------------2.04
318(a)--------------------------------------------------------------------------------------11.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C>
Section 1.01. Definitions................................................................................1
Section 1.02. Other Definitions.........................................................................11
Section 1.03. Incorporation by Reference of Trust Indenture.............................................11
Section 1.04. Rules of Construction.....................................................................12
Section 1.05. Acts of Holders...........................................................................12
ARTICLE 2
THE NOTES
Section 2.01. Form And Dating...........................................................................13
Section 2.02. Execution and Authentication..............................................................14
Section 2.03. Registrar and Paying Agent................................................................15
Section 2.04. Paying Agent to Hold Money in Trust.......................................................15
Section 2.05. Holder Lists..............................................................................16
Section 2.07. Replacement Notes.........................................................................23
Section 2.08. Outstanding Notes.........................................................................23
Section 2.09. Treasury Notes............................................................................24
Section 2.10. Temporary Notes...........................................................................24
Section 2.11. Cancellation..............................................................................24
Section 2.12. Defaulted Interest........................................................................24
ARTICLE 3
CHANGE OF CONTROL OFFER
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes..........................................................................27
Section 4.02. SEC Reports...............................................................................27
Section 4.03. Waiver of Stay, Extension or Usury Laws...................................................27
Section 4.04. Limitation on Transactions with Affiliates................................................28
Section 4.05. Limitation on Indebtedness................................................................28
Section 4.06. Limitation on Restricted Payments.........................................................29
Section 4.07. Reports to Holders........................................................................29
Section 4.08. Notice of Defaults Or Events of Default...................................................29
Section 4.09. Compliance Certificates...................................................................29
Section 4.10. Covenant to Secure Notes Equally..........................................................30
Section 4.11. Limitation on Investment in Affiliates and Unrestricted Subsidiaries......................30
Section 4.12. Limitation on Sale of Assets..............................................................30
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations................................................................31
Section 5.02. Successor Person Substituted..............................................................32
ARTICLE 6
DEFAULTS AND REMEDIES 32
Section 6.01. Events of Default.........................................................................32
Section 6.02. Acceleration..............................................................................34
Section 6.03. Other Remedies............................................................................34
Section 6.04. Waiver of Past Defaults and Events of Default.............................................34
Section 6.05. Control by Majority.......................................................................35
Section 6.06. Limitation on Suits.......................................................................35
Section 6.07. Rights of Holders to Receive Payment......................................................35
Section 6.08. Collection Suit by Trustee................................................................36
Section 6.09. Trustee May File Proofs of Claim..........................................................36
Section 6.10. Priorities................................................................................36
Section 6.11. Undertaking for Costs.....................................................................37
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.........................................................................37
Section 7.02. Rights of Trustee.........................................................................38
Section 7.03. Individual Rights of Trustee..............................................................39
Section 7.04. Trustee's Disclaimer......................................................................39
Section 7.06. Reports by Trustee to Holders.............................................................40
Section 7.07. Compensation and Indemnity................................................................40
Section 7.08. Replacement of Trustee....................................................................41
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion..................................42
Section 7.10. Eligibility; Disqualification............................................................42
Section 7.11. Preferential Collection of Claims Against Company.........................................42
Section 7.12. Paying Agents.............................................................................42
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders................................................................43
Section 8.02. With Consent of Holders...................................................................43
Section 8.03. Compliance with Trust Indenture Act.......................................................44
Section 8.04. Revocation and Effect of Consents.........................................................45
Section 8.05. Notation on or Exchange of Notes..........................................................45
Section 8.06. Trustee to Sign Amendments, etc...........................................................45
ARTICLE 9
SATISFACTION AND DISCHARGE OF
INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture...................................................46
Section 9.02. Funds Deposited for Payment of Notes......................................................47
Section 9.03. Moneys Held by Paying Agent...............................................................47
Section 9.04. Moneys Held by Trustee....................................................................47
Section 9.05. Reinstatement.............................................................................47
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE 48
Section 10.01. Applicability of Article; Company Option to Effect Defeasance............................48
Section 10.02. Defeasance and Discharge.................................................................48
Section 10.03. Covenant Defeasance......................................................................48
Section 10.04. Conditions to Defeasance or Covenant Defeasance..........................................49
Section 10.05. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions..............................................................50
Section 10.06. Reinstatement............................................................................51
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.............................................................51
Section 11.02. Notices..................................................................................51
Section 11.03. Communications by Holders with Other Holders.............................................52
Section 11.04. Certificate and Opinion as to Conditions.................................................52
Section 11.05. Statements Required in Certificate and Opinion...........................................53
Section 11.06. When Treasury Notes Disregarded..........................................................53
Section 11.07. Rules by Trustee and Agents..............................................................53
Section 11.08. Business Days; Legal Holidays............................................................54
Section 11.09. Governing Law............................................................................54
Section 11.10. No Adverse Interpretation of Other Agreements............................................54
Section 11.11. No Recourse against Others...............................................................54
Section 11.12. Successors...............................................................................54
Section 11.13. Multiple Counterparts....................................................................55
Section 11.14. Table of Contents, Headings, etc.........................................................55
Section 11.15. Separability.............................................................................55
</TABLE>
<PAGE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B-1 FORM OF CERTIFICATE FOR EXCHANGE
Exhibit B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM GLOBAL NOTE TO DEFINITIVE NOTE
Exhibit B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM DEFINITIVE NOTE TO GLOBAL NOTE
<PAGE>
-2-
THIS INDENTURE, dated as of July 7, 1997, is by and between
ADELPHIA COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), and
BANK OF MONTREAL TRUST COMPANY, a trust company organized under the laws of the
State of New York (the "Trustee").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.05 hereof.
"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, the Company, (ii) which beneficially owns or holds 10% or
more of any class of the voting Capital Stock of the Company, or (iii) of which
10% or more of the voting Capital Stock is beneficially owned or held by the
Company, a Restricted Subsidiary or an Unrestricted Subsidiary of the Company.
Without a limitation, an Affiliate also includes any director or executive
officer of the Company. As used herein, "Affiliate" shall not include a
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent, co-registrar or
agent for service of notices and demands. See Section 2.03 hereof.
"Agent Members" means members of, or participants in, the
Depository.
"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
the Company.
"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 the Company only, the Company's
Aggregate Excess Restricted Investments for such fiscal quarter.
"Asset Sale" means the sale, transfer or other disposition
(other than to the Company 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 the Company 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 the Company or any Restricted Subsidiary.
"Applicable Procedures" means the procedures of the
Depository.
"Board of Directors" means the Board of Directors of the
Company or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors and to be in full force and effect, and delivered to the Trustee.
"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
any 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 the Company from the
issue or sale (other than to a Subsidiary) by the Company of any class of its
Capital Stock on or after January 1, 1993 (including Capital Stock of the
Company issued after January 1, 1993 upon conversion of or in exchange for other
securities of the Company).
"Capitalized Lease Obligations" means Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"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 the
Company's Board of Directors and attaching to the then outstanding voting
Capital Stock of the Company 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 the Company's Board of Directors
and attaching to the then outstanding voting Capital Stock of the Company, or
(ii) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Company's Board of Directors (together
with any new directors whose election by the Company's Board of Directors or
whose nomination for election by the Company'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 the
Company'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.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means the successor and any other obligor on the
Notes.
"Company Request" means any written request signed in the name
of the Company by the Chairman, the President or a Vice President of the Company
and attested to by a Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Company.
"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 GAAP. 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 GAAP consistently applied.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 77 Water Street, New York, New York 10005.
"Cumulative Credit" means the sum of (i) Capital Stock Sale
Proceeds plus (ii) cumulative EBITDA of the Company 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 the Company 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 GAAP.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the
Notes attached hereto as Exhibit A, that do not include the information called
for by footnotes 1 and 2 thereof.
"Depository" means The Depository Trust Company and its
successors.
"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 GAAP consistently applied, except
that with respect to the Company, each of the foregoing items shall be
determined on a consolidated basis with respect to the Company and its
Restricted Subsidiaries only.
"Excess Restricted Investment" means, with respect to any
particular Unrestricted Subsidiary or Affiliate of the Company 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:
(i) the aggregate amount of any Restricted
Investments (other than the Initial
Investment) made by the Company 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
the Company 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 the Company 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.
"Exchange Offer" means the Exchange Offer as defined in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A, and that is
deposited with and registered in the name of the Depository.
"Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Registrar's books.
"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 GAAP, 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 the Company, 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.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Initial Investment" means the Restricted Investment in a
Person made by the Company or a Restricted Subsidiary that first results in such
Person becoming an Unrestricted Subsidiary or Affiliate of the Company, 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 Payment Date" means the stated maturity of an
installment of interest on the Notes.
"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 Corporation.
"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Company, its Restricted Subsidiaries) divided by (ii) the Annualized Pro Forma
EBITDA of such Person.
"Lien" means with respect to any property or assets of the
Company (it being understood that for the purposes of this definition property
or assets of the Company do not include property or assets of any Subsidiary of
the Company) 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 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 the aggregate.
"Notes" means the securities that are issued under this
Indenture, as amended or supplemented from time to time pursuant to this
Indenture.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers. See Sections 11.04 and 11.05 hereof.
"Olympus" means Olympus Communications, L.P., a Delaware
limited partnership.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee. See Sections 11.04 and 11.05 hereof.
"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 the Company 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 the Company and its Restricted
Subsidiaries under Section 4.06; provided further that no Restricted Investments
may be made under (ii), (iii), (iv) or (v) unless pro forma for such Restricted
Investment the Company could incur $1 of debt under the first paragraph of
Section 4.05.
"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 the Company, the average
life and the date such Indebtedness is scheduled to mature is not shortened and
(iii) in the case of Indebtedness of the Company, the new Indebtedness shall not
be senior in right of payment to the Indebtedness that is being extended,
renewed, substituted, refinanced or replaced.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"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
GAAP 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 the Company, all of the foregoing references to "Subsidiary" or
"Subsidiaries" shall be deemed to refer only to a "Restricted Subsidiary" or
"Restricted Subsidiaries" of the Company.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"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 the Company 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 the Company 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
Corporation): (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 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 & 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.
"Registration Rights Agreement" means the Note Registration
Rights Agreement, dated as of July 7, 1997, by and between the Company, Smith
Barney Inc., Bear, Stearns & Co. Inc., NationsBanc Capital Markets, Inc.
and TD Securities (USA) Inc.
"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 the Company.
"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 the Company or Capital Stock of any Subsidiary which is
consolidated with the Company in accordance with GAAP consistently applied,
except for any dividend or distribution which is made solely to the Company or
another Subsidiary or dividends or distributions payable solely in shares of
Common Stock of the Company, or (ii) any redemption, repurchase, retirement or
other direct or indirect acquisition of (a) Indebtedness of the Company 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 proceeds of a sale of Capital Stock by the Company, or (b)
shares of Capital Stock of the Company or any warrants, rights or options to
directly or indirectly purchase or acquire any such Capital Stock of the Company
or any securities exchangeable for or convertible into any such shares, other
than options issued or shares purchased or granted under the Company's Stock
Option Plan of 1986 or the Company's Restricted Stock Bonus Plan, from any
employee of the Company 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 the Company, except for the purchase, redemption, retirement or other
acquisition of any shares of the Company'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 July 15, 2004.
"Restricted Subsidiary" means (a) any Subsidiary of the
Company, whether existing on or after the date of this 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 the
Company and (b) an Unrestricted Subsidiary which is reclassified as a Restricted
Subsidiary by a resolution adopted by the Board of Directors of the Company,
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 this 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 the
Company's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"SEC" means the United States Securities and Exchange
Commission as constituted from time to time or any successor performing
substantially the same functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Notes" and "Series B Notes" mean the Notes as
described and in the forms contemplated herein, and as authenticated and issued
under this Indenture.
"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 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 GAAP such entity is consolidated with the first-named Person for financial
statement purposes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
SS-77aaa-77bbbb) as in effect on the date of this Indenture (except as provided
in Section 8.03 hereof).
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Trust Officer" means any officer or assistant officer of the
Trustee.
"U.S. Government Obligations" means (a) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt; provided, that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or a specific payment of
principal or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary, (b) any Subsidiary of the Company which is classified
after the date of this Indenture as an Unrestricted Subsidiary by a resolution
adopted by the Board of Directors of the Company 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 the Company (such Unrestricted
Subsidiaries being Hyperion Telecommunications, Inc., Global Cablevision, Inc.,
Orchard Park Cablevision, Inc. and Global Acquisition Partners, L.P. on the date
hereof); provided that a Subsidiary organized or acquired after the date of this
Indenture may be so classified as an Unrestricted Subsidiary only if immediately
after the date of such classification, any investment by the Company and its
Restricted Subsidiaries in any such Subsidiary made at the time of the
organization or acquisition of such Subsidiary would be a Restricted Investment
permissible under this Indenture. The Trustee shall be given prompt notice by
the Company of each resolution adopted by its Board of Directors under this
provision, together with a copy of each such resolution adopted.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
The definitions of the following terms may be found in the
sections indicated as follows:
Term Defined in Section
<S> <C>
"Act".................................................................1.05
"Bankruptcy Law"......................................................6.01
"Business Day"........................................................11.08
"Certificated Notes"..................................................2.01
"Change of Control Offer".............................................3.00
"Change of Control Purchase Price"....................................3.00
"Covenant Defeasance".................................................10.03
"Custodian"...........................................................6.01
"Defeasance"..........................................................10.02
"DTC".................................................................2.03
"Event of Default"....................................................6.01
"Legal Holiday".......................................................11.08
"Paying Agent"........................................................2.03
"Proposed Change of Control Response Date"............................3.00
"Reclassification"....................................................4.12
"Registrar"...........................................................2.03
</TABLE>
Section 1.03......Incorporation by Reference of Trust Indenture
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture noteholder" means a Noteholder.
"indenture to be qualified" means this
Indenture.
"indenture trustee" or "institutional
trustee" means the Trustee.
"obligor" means the Company or any other
obligor on the indenture securities.
All other terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings therein assigned to them.
Section 1.04......Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it
herein, whether defined expressly or by reference;
(2) an accounting term not otherwise defined
has the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural,
and in the plural include the singular; and
(5) words used herein implying any gender shall
apply to every gender.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing an agent therefor shall be sufficient for any purpose of
this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the register of
Notes maintained by the Registrar pursuant to Section 2.03 hereof.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
ARTICLE 2
THE NOTES
Section 2.01. Form And Dating.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A attached hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(a) Global Note. Notes shall be issued initially in the form
of the Global Note, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Depository at its New York office, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depository or its nominee as hereinafter provided.
The Global Note shall represent such of the outstanding Notes
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of the Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian (as hereinafter defined), at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.
Except as set forth in Section 2.06 hereof, the Global Note
may be transferred, in whole and not in part, only to another nominee of the
Depository or to a successor of the Depository or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b)
shall apply only to the Global Note deposited with or on behalf of the
Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver the Global Note that (i)
shall be registered in the name of the Depository or the nominee of the
Depository and (ii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Note Custodian.
Agent Members shall have no rights either under this Indenture
with respect to any Global Note held on their behalf by the Depository or by the
Note Custodian or under such Global Note, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of
an owner of a beneficial interest in the Global Note.
(c) Definitive Notes. Notes issued in certificated form shall
be substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto). Except as provided in
Section 2.06, owners of beneficial interests in the Global Note will not be
entitled to receive physical delivery of certificated Securities.
Section 2.02. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and may
be in facsimile form. If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid. A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by an Officer, authenticate Series A Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The Trustee
shall, upon a written order of the Company signed by an Officer, authenticate
Series B Notes for original issue up to the aggregate principal amount of Series
A Notes exchanged in the Exchange Offer or otherwise exchanged for Series A
Notes pursuant to the terms of the Registration Rights Agreement. The aggregate
principal amount of Notes outstanding at any time may not exceed such amounts
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Note.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent respect to the Global Note.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA S-312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA S-312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Note. The transfer and
exchange of beneficial interests in the Global Note shall be effected through
the Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in the Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the Global Note in accordance
with the transfer restrictions set forth in the legend in subsection (g) of this
Section 2.06.
(b) Transfer and Exchange of Definitive Notes. When
Definitive Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive
Notes; or
(y) to exchange such Definitive Notes for an
equal principal amount of Definitive Notes
of other authorized denominations, the
Registrar shall register the transfer or
make the exchange as requested if its
requirements for such transactions are met;
provided, however, that the Definitive Notes
presented or surrendered for register of
transfer or exchange:
(i) shall be duly endorsed or
accompanied by a written instruction
of transfer in form satisfactory to
the Registrar duly executed by such
Holder or by his attorney, duly
authorized in writing; and
(ii) in the case of a Definitive Note
that is a Transfer Restricted
Security, such request shall be
accompanied by the following
additional information and
documents, as applicable:
(A) if such Transfer Restricted
Security is being delivered
to the Registrar by a
Holder for registration in
the name of such Holder,
without transfer, a
certification to that
effect from such Holder (in
substantially the form of
Exhibit B-1 hereto);
(B) if such Transfer Restricted
Security is being
transferred to a QIB in
accordance with Rule 144A
under the Securities Act or
pursuant to an exemption
from registration in
accordance with Rule 144
under the Securities Act or
pursuant to an effective
registration statement
under the Securities Act, a
certification to that
effect from such Holder (in
substantially the form of
Exhibit B-1 hereto); or
(C) if such Transfer Restricted
Security is being
transferred in reliance on
another exemption from the
registration requirements
of the Securities Act, a
certification to that
effect from such Holder (in
substantially the form of
Exhibit B-1 hereto) and an
Opinion of Counsel from
such Holder or the
transferee reasonably
acceptable to the Company
and to the Registrar to the
effect that such transfer
is in compliance with the
Securities Act.
(c) Transfer of a Beneficial Interest in the Global Note
for a Definitive Note.
(i) Any Person having a beneficial
interest in the Global Note may upon
request, subject to the Applicable
Procedures, exchange such beneficial
interest for a Definitive Note. Upon
receipt by the Trustee of written
instructions or such other form of
instructions as is customary for the
Depository, from the Depository or
its nominee on behalf of any Person
having a beneficial interest in the
Global Note, and, in the case of a
Transfer Restricted Security, the
following additional information and
documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest
is being transferred to the
Person designated by the
Depository as being the
beneficial owner, a
certification to that
effect from such Person (in
substantially the form of
Exhibit B-2 hereto);
(B) if such beneficial interest
is being transferred to a
QIB in accordance with Rule
144A under the Securities
Act or pursuant to an
exemption from registration
in accordance with Rule 144
under the Securities Act or
pursuant to an effective
registration statement
under the Securities Act, a
certification to that
effect from the transferor
(in substantially the form
of Exhibit B-2 hereto); or
(C) if such beneficial interest
is being transferred in
reliance on another
exemption from the
registration requirements
of the Securities Act, a
certification to that
effect from the transferor
(in substantially the form
of Exhibit B-2 hereto) and
an Opinion of Counsel from
the transferee or
transferor reasonably
acceptable to the Company
and to the Registrar to the
effect that such transfer
is in compliance with the
Securities Act, the Company
shall execute and, the
Trustee shall authenticate
and deliver to the
transferee a Definitive
Note in the appropriate
principal amount.
(ii) Definitive Notes issued in exchange
for a beneficial interest in the
Global Note pursuant to this Section
2.06(c) shall be registered in such
names and in such authorized
denominations as the Depository,
pursuant to instructions from its
direct or indirect participants or
otherwise, shall instruct the
Trustee. The Trustee shall deliver
such Definitive Notes to the Persons
in whose names such Notes are so
registered.
(d) Restrictions on Transfer and Exchange of Global Note.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), the Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(e) Transfer and Exchange of a Definitive Note for a
Beneficial Interest in the Global Note. A Definitive Note may not be exchanged
for a beneficial interest in the Global Note except, subject to the Applicable
Procedures, upon satisfaction of the requirements set forth below. Upon receipt
by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, and, in the case
of a Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile):
(i) if such beneficial interest is being
transferred to the Person designated
by the Depository as being the
beneficial owner, a certification to
that effect from such Person (in
substantially the form of Exhibit
B-3 hereto);
(ii) if such beneficial interest is being
transferred to a QIB in accordance
with Rule 144A under the Securities
Act or pursuant to an exemption from
registration in accordance with Rule
144 under the Securities Act or
pursuant to an effective
registration statement under the
Securities Act, a certification to
that effect from the transferor (in
substantially the form of Exhibit
B-3 hereto); or
(iii) if such beneficial interest is being
transferred in reliance on any other
exemption from the registration
requirements of the Securities Act,
a certification to that effect from
the transferor (in substantially the
form of Exhibit B-3 hereto) and an
Opinion of Counsel from the
transferee or the transferor
reasonably acceptable to the Company
and to the Registrar to the effect
that such transfer is in compliance
with the Securities Act,
the Trustee shall cancel such Definitive Note in accordance with Section 2.11
hereof and cause, or direct the Note Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Note Custodian, the aggregate principal amount of Notes represented by the
Global Note to be increased accordingly. If no part of the Global Note is then
outstanding, the Company shall execute and the Trustee shall authenticate a new
Global Note in the appropriate principal amount.
(f) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes
notifies the Company that the
Depository is unwilling or unable to
continue as Depository for the
Global Note and a successor
Depository for the Global Note is
not appointed by the Company within
90 days after delivery of such
notice; or
(ii) the Company at its sole discretion,
notifies the Trustee in writing that
it elects to cause the issuance of
Definitive Notes under this
Indenture,
then the Company shall execute, and
the Trustee shall, upon receipt of
an authentication order in
accordance with Section 2.02 hereof,
authenticate and deliver, Definitive
Notes in an aggregate principal
amount equal to the principal amount
of the Global Note in exchange for
such Global Note.
(g) Legends.
(i) Except as permitted by the following
paragraphs (ii) and (iii), each Note
certificate evidencing the Global
Note and Definitive Notes (and all
Notes issued in exchange therefor or
substitution thereof) shall bear
legends in substantially the
following form:
THE NOTES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO
A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (3)
PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (4) TO
INSTITUTIONAL ACCREDITED INVESTORS
IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER
JURISDICTIONS.
(ii) Upon any sale or transfer of a
Transfer Restricted Security
(including any Transfer Restricted
Security represented by the Global
Note) pursuant to Rule 144 under the
Securities Act or pursuant to an
effective registration statement
under the Securities Act:
(A) in the case of any Transfer
Restricted Security that is
a Definitive Note, the
Registrar shall permit the
Holder thereof to exchange
such Transfer Restricted
Security for a Definitive
Note that does not bear the
legend set forth in (i)
above and rescind any
restriction on the transfer
of such Transfer Restricted
Security upon receipt of a
certification from the
transferring holder
substantially in the form
of Exhibit B-1 hereto, and;
(B) in the case of any
Transfer Restricted
Security represented by the
Global Note, such Transfer
Restricted Security shall
not be required to bear the
legend set forth in (i)
above, but shall continue
to be subject to the
provisions of Section
2.06(a) and (b) hereof;
provided, however, that
with respect to any request
for an exchange of a
Transfer Restricted
Security that is
represented by the Global
Note for a Definitive Note
that does not bear the
legend set forth in (i)
above, which request is
made in reliance upon Rule
144, the Holder thereof
shall certify in writing to
the Registrar that such
request is being made
pursuant to Rule 144 (such
certification to be
substantially in the form
of Exhibit B-2 hereto).
(iii) Upon any sale or transfer of
a Transfer Restricted Security
(including any Transfer Restricted
Security represented by the Global
Note) in reliance on any exemption
from the registration requirements of
the Securities Act (other than
exemptions pursuant to Rule 144A or
Rule 144 under the Securities Act) in
which the Holder or the transferee
provides an Opinion of Counsel to the
Company and the Registrar in form and
substance reasonably acceptable to
the Company and the Registrar (which
Opinion of Counsel shall also state
that the transfer restrictions
contained in the legend are no longer
applicable):
(A) in the case of any Transfer
Restricted Security that is
a Definitive Note, the
Registrar shall permit the
Holder thereof to exchange
such Transfer Restricted
Security for a Definitive
Note that does not bear the
legend set forth in (i)
above and rescind any
restriction on the transfer
of such Transfer Restricted
Security; and
(B) in the case of any Transfer
Restricted Security
represented by the Global
Note, such Transfer
Restricted Security shall
not be required to bear the
legend set forth in (i)
above, but shall continue
to be subject to the
provisions of Section
2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon
consummation of the Exchange Offer in
accordance with the Registration
Rights Agreement, the Company shall
issue and, upon receipt of an
authentication order in accordance
with Section 2.02 hereof, the Trustee
shall authenticate Series B Notes in
exchange for Series A Notes accepted
for exchange in the Exchange Offer,
which Series B Notes shall not bear
the legend set forth in (i) above,
and the Registrar shall rescind any
restriction on the transfer of such
Series B Notes, in each case unless
the Holder of such Series A Notes is
either (A) a broker-dealer, (B) a
Person participating in the
distribution of the Series A Notes or
(C) a Person who is an affiliate (as
defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of the Global Note. At such
time as all beneficial interests in the Global Note have been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note shall be
returned to or retained and cancelled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in the Global Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by the Global Note shall be
reduced accordingly and an endorsement shall be made on the Global Note, by the
Trustee or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers
and exchanges, the Company shall
execute and the Trustee shall
authenticate Definitive Notes and
the Global Note at the Registrar's
request.
(ii) No service charge shall be made to a
Holder for any registration of
transfer or exchange, but the
Company may require payment of a sum
sufficient to cover any transfer tax
or similar governmental charge
payable in connection therewith
(other than any such transfer taxes
or similar governmental charge
payable upon exchange or transfer
pursuant to Sections 2.10 and 8.05
hereto).
(iii) All Definitive Notes and the Global
Note issued upon any registration of
transfer or exchange of Definitive
Notes or the Global Note shall be
the valid obligations of the
Company, evidencing the same debt,
and entitled to the same benefits
under this Indenture, as the
Definitive Notes or the Global Note
surrendered upon such registration
of transfer or exchange.
(iv) Prior to due presentment for the
registration of a transfer of any
Note, the Trustee, any Agent and the
Company may deem and treat the
Person in whose name any Note is
registered as the absolute owner of
such Note for the purpose of
receiving payment of principal of
and interest on such Notes, and
neither the Trustee, any Agent nor
the Company shall be affected by
notice to the contrary.
(v) The Trustee shall authenticate
Definitive Notes and the Global Note
in accordance with the provisions of
Section 2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee
shall authenticate a replacement if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for any expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned shall
be so disregarded.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by an Officer. Temporary Notes shall be substantially in
the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
cancelled Notes (subject to the record retention requirement of the Exchange Act
in accordance with its standard disposition policies in effect from time to
time). Certification of the destruction of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3
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, the
Company 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, the
Company 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 the Company 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 Article 3, in the
case of a notice of a Change of Control Offer that is being furnished by the
Company 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 the Company, by a date not earlier 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 the Company of the
principal amount of such Notes to be so tendered (with the failure of any holder
to so notify the Company within such 30-day period to be deemed an election of
such holder not to accept such Change of Control Offer). In such event, the
Company shall have the option, to be exercised by a subsequent 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, the Company 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 the
Company. 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 this 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).
In the event that the Company is required to make a Change of
Control Offer, the Company will comply with all applicable tender offer rules
including Rule 14e-1 under the Exchange Act, to the extent applicable.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay the principal of and all interest on the
Notes on the dates and in the manner provided in the Notes and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay such installment.
The Company will pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law) and on overdue
interest, to the extent lawful, at the rate borne by the Notes.
Section 4.02. SEC Reports.
The Company shall file with the Trustee, within 15 days after
it files with the SEC, copies of the annual reports and of the other
information, documents and reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe), if any, which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. The Company shall also comply with
the other provisions of TIA S-314(a).
Section 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead (as a defense or
otherwise) or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of and/or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 4.04. Limitation on Transactions with Affiliates.
The Company shall not, and shall 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 the Company or a Restricted
Subsidiary in a comparable arm's-length transaction with a Person which is not
an Affiliate. The Company shall not, and shall 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 the Company 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 the Company or any of its
Restricted Subsidiaries, so long as the Board of Directors of the Company 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 the Company 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, this provision shall not prohibit any such
transaction which is determined by the independent members of the Board of
Directors of the Company, in their reasonable, good faith judgment (as evidenced
by a Board Resolution filed with the Trustee) to be (a) in the best interests of
the Company or such Restricted Subsidiary, and (b) upon terms which would be
obtainable by the Company or a Restricted Subsidiary in a comparable
arm's-length transaction with a Person which is not an Affiliate.
Section 4.05. Limitation on Indebtedness.
The Company shall not, and shall 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 $150,000,000 of the Notes originally issued under
the Indenture) unless, after giving effect to such incurrence on a pro forma
basis, Indebtedness of the Company 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, this provision will not limit the
incurrence of Indebtedness which is incurred by the Company or its Restricted
Subsidiaries for working capital purposes or capital expenditures with respect
to plant, property and equipment of the Company and its Restricted Subsidiaries
in an aggregate amount not to exceed $50,000,000. Further, this provision will
not limit Permitted Refinancing Indebtedness, subject to the provisions of
Section 4.06.
Section 4.06. imitation on Restricted Payments.
So long as any of the Notes remain outstanding, the Company
shall not make, and shall not permit any Restricted Subsidiary to make, any
Restricted Payment if (a) at the time of such proposed Restricted Payment, a
Default or Event of Default shall have occurred and be continuing or shall occur
as a consequence of such Restricted Payment, or (b) immediately after giving
effect to 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 the Company'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 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.
Section 4.07. Reports to Holders.
The Company will send to the Trustee and to Noteholders,
within 15 days after the filing thereof with the SEC, copies of its annual
reports on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports
on Form 8-K; provided, however, that notwithstanding any event which results in
the Company being relieved of its obligation to file information, documents and
reports with the SEC pursuant to Sections 13 or 15(d) of the Exchange Act, the
Company shall nevertheless continue, so long as any Note remains outstanding and
unpaid, (i) to file with the SEC (at such time as it would be required to file
such reports under the Exchange Act), and to send to the Trustee and Noteholders
(within 15 days thereafter), quarterly and annual reports and information,
documents and other reports substantially equivalent to those it would have been
obligated to file if it had remained subject to such sections of the Exchange
Act, and (ii) so long as the Notes have not been registered pursuant to the
Registration Rights Agreement, upon the request of a Noteholder, to provide
information required to be delivered under Rule 144A(d)(4) under the Securities
Act to such Noteholder and its prospective purchasers designated by such
Noteholder.
Section 4.08. Notice of Defaults Or Events of Default.
In the event that any Default or Event of Default shall occur
and be continuing, the Company will, within 10 days of the occurrence thereof,
give written notice of such Default or Event of Default to the Trustee.
Section 4.09. Compliance Certificates.
The Company shall 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 Officers' Certificate stating whether or
not the signers know of any Default or Event of Default. If they do know of such
a Default or Event of Default, the certificate shall describe such Default or
Event of Default and the efforts to remedy or obtain a waiver of the same. The
certificate must comply with Section 11.05 hereof.
Section 4.10. Covenant to Secure Notes Equally.
Except for Liens created or assumed by the Company
in connection with the acquisition
of real property or equipment to be used by the Company in the operation of its
business which do not secure Indebtedness in excess of the purchase price of
such real property or equipment, the Company 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 the Company secured by such Lien as long as any such other
Indebtedness of the Company shall be so secured. The restriction imposed by this
Section 4.10 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 the
Company.
Section 4.11. Limitation on Investment in Affiliates and Unrestricted
Subsidiaries.
After the date of this Indenture, the Company may not, nor
will the Company 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 the Company does not exceed 7.75:1.
Section 4.12. Limitation on Sale of Assets.
Neither the Company nor any Restricted Subsidiary of the
Company shall sell an asset (including Capital Stock of Restricted Subsidiaries)
or reclassify a Restricted Subsidiary existing on the date of this 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 the Company 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 the Company'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 the Company 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 the Company undertake an asset sale or Reclassification, if pro forma
for such an asset sale or Reclassification the Company and its Restricted
Subsidiaries would be the owners of fewer than 75% of the cable systems
(measured on the basis of basis subscribers as of February 22, 1994) owned by
the Company and its Restricted Subsidiaries as of February 22, 1994, provided
however, that the Company 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.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Mergers and Consolidations.
The Company 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) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or to which the properties and assets of the Company 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 the Company under
the Notes and this Indenture, and the obligations under this 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 the Company 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 the
Company for the most recent quarter preceding such transaction set forth in
Column B below or the ratio set forth in Column C below:
A B C
1.1111:1 to 1.4999:1 90% 1.00:1
1.5 and higher 80% 1.35:1
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 Section 5.01, the Company 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 Section 5.01 and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01
above, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of any
principal of any Note when the same becomes due and payable at
maturity, upon acceleration or otherwise;
(2) the Company defaults in the payment of any
interest on any Note when the same becomes due and payable
and the default continues for a period of 30 days;
(3) the Company defaults in the observance or
performance of any other covenant in the Notes or this
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;
(4) the Company fails to pay when due principal,
interest or premium aggregating $10,000,000 or more with
respect to any Indebtedness of the Company 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 this Indenture;
(5) a court of competent jurisdiction enters a final
judgment or judgments for the payment of money in excess of
$10,000,000 against the Company or any Restricted Subsidiary
and such judgment remains undischarged for a period of 60
consecutive days during which a stay of enforcement of such
judgment shall not be in effect;
(6) the Company, or any Restricted Subsidiary with
liabilities of greater than $10,000,000 under GAAP as of the
date of the event described in this clause (6), pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of
an order for relief against
it in an involuntary case,
(C) consents to the appointment
of a Custodian of it or for
all or substantially all of
its property, or
(D) makes a general assignment
for the benefit of its
creditors;
(7) a court of competent jurisdiction enters
an order or decree under any Bankruptcy Law that:
(A) is for relief against the
Company, or any Restricted
Subsidiary with liabilities
of greater than $10,000,000
under GAAP as of the
effective date of such
order or decree, in an
involuntary case,
(B) appoints a Custodian of the
Company, or any Restricted
Subsidiary with liabilities
of greater than $10,000,000
under GAAP as of the
effective date of such
order or decree, or for all
or substantially all of its
property, or
(C) orders the liquidation of
the Company, or any
Restricted Subsidiary with
liabilities of greater than
$10,000,000 under GAAP as
of the effective date of
such order or decree, and
the order or decree remains
unstayed and in effect for
60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clauses (3) and (4) is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities notify the Company and the Trustee,
of the Default and the Company does not cure the Default within (a) 60 days
after receipt of such notice in the case of a Default under clause (3) and (b)
10 days after receipt of such notice in the case of a Default under clause (4).
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." If the Holders of at least 25% in principal
amount of the outstanding Notes request the Trustee to give such notice on their
behalf, the Trustee shall do so.
Subject to Section 7.05 hereof, 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.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default
resulting from certain events of bankruptcy, insolvency or reorganization)
occurs and is continuing, the Trustee by notice to the Company, 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 such acceleration is obtained by the Trustee, the
Holders of a majority in aggregate principal amount of outstanding Notes by
written notice to the Trustee and the Company may rescind and annul such
acceleration and its consequences if all existing Events of Default, other than
the nonpayment of accelerated principal or interest, have been cured or waived.
In case an Event of Default specified in Section 6.01(6) or (7) occurs, 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 the Notes.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of and interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture and may take any necessary
action requested of it as Trustee to settle, compromise, adjust or otherwise
conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of
a majority in principal amount of the Notes then outstanding have the right to
waive any existing default or compliance with any provision of this 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 this Indenture.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the Notes
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee by this Indenture. The Trustee, however, may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines may be unduly prejudicial to the rights of another
Noteholder not taking part in such direction, and the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
counsel, determines that the action so directed may not lawfully be taken or if
the Trustee in good faith shall, by a Trust Officer, determine that the
proceedings so directed would involve it in personal liability; provided that
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, a Noteholder may not institute
any proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity reasonably satisfactory to the Trustee against any
loss, liability or expense;
(4) the Trustee does not comply with the
request within 60 days after receipt of
the request and the offer of indemnity; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60 day
period by the Holders of a majority in aggregate principal
amount of the Notes then outstanding.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal of and interest on
the Note on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
is absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or any other obligor on the Notes for the whole amount of unpaid
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate then
borne by the Notes, and such further amounts as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any
Custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee or any predecessor trustee
under Section 7.07 hereof.
To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee or any predecessor Trustee under Section 7.07
hereof out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other properties which
the Holders of the Notes may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceedings.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
FIRST: to the Trustee or any predecessor trustee
for amounts due under Sections 6.09 and 7.07 hereof;
SECOND: to Noteholders for amounts due and unpaid
on the Notes for principal and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Notes; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the same circumstances in
the conduct of his own affairs.
(b) Except during the continuance of an Event
of Default:
(1) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
The Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05 hereof.
(4) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so
provided, paragraphs (a), (b) and (c) of this Section 7.01 shall govern every
provision of this Indenture that in any way
relates to the Trustee.
(e) The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity reasonably
satisfactory to it against any loss, liability, expense or fee.
(f) The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on any document reasonably
believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to the provisions of
Section 11.05 hereof. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on
such Certificate or Opinion.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably
believes to be authorized or within its rights or powers.
(5) The Trustee may consult with counsel, and the
advice or opinion of such counsel as to matters of law shall
be full and complete authorization and protection in respect
of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of
such counsel.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, shall be subject to
Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Company's use of the proceeds from the sale of Notes and it shall not be
responsible for any statement in the Notes other than its certificate of
authentication.
<PAGE>
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Noteholder notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment of
the principal of or interest on any Note the Trustee may withhold the notice if
and so long as the board of directors of the Trustee, the executive committee or
any trust committee of such board and/or its Trust Officers in good faith
determine(s) that withholding the notice is in the interests of the Noteholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of any year, commencing the May 15
following the date of this Indenture, the Trustee shall mail to each Noteholder
a brief report dated as of such May 15 that complies with TIA S-313(a) (but if
no event described in TIA S 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA S-313(b)(2).
Reports pursuant to this Section shall be transmitted by mail:
(1) to all registered Holders of Notes, as the names
and addresses of such Holders appear on the Registrar's books;
(2) to such Holders of Notes as have, within the two
years preceding such transmission, filed their names and
addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to TIA
S-313(b), to each Noteholder whose name and address is
preserved at the time by the Trustee, as provided in Section
2.05.
A copy of each report at the time of its mailing to
Noteholders shall be filed with the SEC and each stock exchange on which the
Notes are listed. The Company shall notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07. Compensation and Indemnity.ty
The Company shall pay to the Trustee from time to time
reasonable compensation for its services hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it in
connection with its duties under this Indenture, including the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss, liability or reasonable expense incurred by it in
connection with the performance of its duties under this Indenture including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder (including, without limitation, settlement costs). The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by the Trustee through its
negligence or bad faith. To secure the Company's payment obligations in Sections
6.09 and 7.07, the Trustee shall have a lien prior to the Notes on all money or
property held or collected by the Trustee except such money or property held in
trust to pay principal of and interest on particular Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. However, in the event that such
expenses of administration are disallowed by a final judgment of a court of
competent jurisdiction, the expenses thereby, and all other unreimbursed
expenses of the Trustee, shall constitute a general unsecured claim of the
Trustee against the estate.
For purposes of this Section 7.07, the term "Trustee" shall
include any trustee appointed pursuant to Article 10.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by notifying the removed Trustee and may appoint a successor Trustee
with the Company's written consent. Subject to the provisions of Section 6.11,
any Noteholder who has been a bona fide holder of Notes for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee, and the appointment of
a successor, if the Trustee fails, after written notice therefor by such Holder,
to comply with the provisions of clause (i) of TIA 310(b). The Company may
remove the Trustee at its election if:
(1) the Trustee fails to comply with
Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property;
(4) the Trustee otherwise becomes incapable of
acting; or
(5) a successor corporation becomes successor
Trustee pursuant to Section 7.09 below.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Noteholder.
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.ion
This Indenture shall always have a Trustee who satisfies the
requirements of TIA S-310(a)(1) and (2) in every respect. The Trustee shall have
a combined capital and surplus of at least $5,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
S-310(b), including the provision in S-310(b)(1).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA 311(a), excluding
any creditor relationship listed in TIA 311(b). A Trustee who has resigned or
been removed shall be subject to TIA 311(a) to the extent indicated therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to it and the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
7.12:
(A) that it will hold all sums
held by it as agent for the
payment of principal of or
interest on, the Notes
(whether such sums have
been paid to it by the
Company or by any obligor
on the Notes) in trust for
the benefit of Holders of
the Notes;
(B) that it will at any time
during the continuance of
any Event of Default, upon
written request from the
Trustee, deliver to the
Trustee all sums so held in
trust by it; and
(C) that it will give the
Trustee written notice
within three (3) Business
Days of any failure of the
Company (or by any obligor
on the Notes) in the
payment of any installment
of the principal of or
interest on, the Notes when
the same shall be due and
payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(1) to comply with Section 5.01 hereof;
(2) to convey, transfer, assign, mortgage or
pledge any property to the Trustee and otherwise to comply
with Section 4.10 hereof;
(3) to provide for uncertificated Notes in
addition to or in place of certificated Notes;
(4) to issue up to $100,000,000 in aggregate
principal amount of additional Notes pursuant to this
Indenture; or
(5) to cure any ambiguity, defect or inconsistency,
or to make any other change that does not materially and
adversely affect the rights of any Noteholder.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
its own rights, duties or immunities under this Indenture.
Section 8.02. With Consent of Holders.
The Company and the Trustee may modify or supplement this
Indenture or the Notes with the written consent of the Holders of at least
one-half in principal amount of the outstanding Notes without notice to any
Noteholder. The Holders of a majority in aggregate principal amount of the
outstanding Notes may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes without notice to any
Noteholder. Subject to Section 8.04, without the consent of each Noteholder
affected, however, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose Holders
must consent to an amendment, supplement or waiver to this
Indenture or the Notes;
(2) reduce the rate of or change the time for
payment of interest on any Note;
(3) reduce the principal of or change the stated
maturity of any Note;
(4) change the amount or time of any payment
required by the Notes or provide for the redemption of the
Notes prior to maturity;
(5) waive a default in the payment of the
principal of, interest on, or redemption payment with respect
to, any Note;
(6) make any Note payable in money other than that
stated in the Note or change the place of payment from New
York, New York; or
(7) make any changes in Sections 6.04, 6.07
hereof or this sentence of Section 8.02.
After an amendment, supplement or waiver under this Section
8.02 becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the Noteholders
as aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of a Note is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Any such Holder or subsequent Holder, however, may revoke
the consent as to his Note or portion of a Note, if the Trustee receives the
notice of revocation before the date the amendment, supplement, waiver or other
action becomes effective.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement, or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amendment, supplement, or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date unless the consent of the requisite number
of Holders has been obtained.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Noteholder, unless it makes a change described in
any of clauses (1) through (7) of Section 8.02 hereof. In that case the
amendment, supplement, waiver or other action shall bind each Holder of a Note
who has consented to it and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note.
Section 8.05. Notation on or Exchange of Notes.
If an amendment, supplement, or waiver changes the terms of a
Note, the Trustee may request the Holder of the Note to deliver it to the
Trustee. In such case, the Trustee shall place an appropriate notation on the
Note about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new security that reflects the
changed terms.
Section 8.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article 8 if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver the Trustee shall be
entitled to receive and, subject to Section 7.01 hereof, shall be fully
protected in relying upon an Officers' Certificate and an Opinion of Counsel
stating that such amendment, supplement or waiver is authorized or permitted by
this Indenture. The Company may not sign an amendment or supplement until the
Board of Directors approves it.
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
Section 9.01. Satisfaction and Discharge of Indenture.
If at any time
(a) either
(i) there shall have been canceled by the
Trustee or delivered to the Trustee for
cancellation all Notes theretofore
authenticated and delivered (other than any
Notes that are asserted to have been
destroyed, lost or stolen and that shall
have been replaced as provided in Section
2.07 hereof, or paid, or Notes for whose
payment money has theretofore been deposited
in trust with the Trustee); or
(ii) all such Notes not theretofore canceled by
the Trustee or delivered to the Trustee for
cancellation shall have become due and
payable, or are by their terms to become due
and payable within one (1) year, and the
Company has deposited or caused to be
deposited with the Trustee as trust funds
the entire amount sufficient to pay at
maturity the principal of and accrued
interest on all such Notes not theretofore
canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) the Company has paid or caused to be paid
all other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an
Officers' Certificate stating that all conditions precedent provided for herein
relating to the satisfaction and discharge of this Indenture have been complied
with; and
(d) the Company has delivered to the Trustee
an Opinion of Counsel stating that the documents and other items that have been
or are therewith delivered to the Trustee conform to the requirements of this
Indenture, and that, upon the basis of a Company Request and the accompanying
documents and items specified in this Section 9.01, all conditions precedent
provided for herein relating to the satisfaction and discharge of this Indenture
have been complied with, then, upon Company Request, this Indenture and the
rights and interests hereby created shall cease to be of further effect (except
as to any surviving rights of registration of transfer or exchange of Notes),
and the Trustee, at the cost and expense of the Company, shall, subject to
Section 9.05 hereof, execute and deliver proper instruments acknowledging
satisfaction and discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 6.09, 7.07, 7.08, 9.04 and 9.05 shall survive until the Notes are no
longer outstanding. Thereafter, the Company's obligations to the Trustee under
Sections 7.07, 9.04 and 9.05 hereof shall survive.
Section 9.02. Funds Deposited for Payment of Notes.
All moneys deposited with the Trustee pursuant to Section 9.01
hereof shall be held in trust and shall be available for payment when the Notes
become due and payable in accordance with their terms, either directly or
through any Paying Agent, to the Holders of the particular Notes for the payment
of which such moneys have been deposited with the Trustee.
Section 9.03. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent under the provisions of this
Indenture shall, upon demand of the Company, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 9.01 hereof, to the
Company, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
Section 9.04. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or
then held by the Company in trust for the payment of the principal of or
interest on any Note that are not applied but remain unclaimed by the Holder of
such Note for two (2) years after the date upon which the principal of or
interest on such Note shall have respectively become due and payable shall be
repaid to the Company upon Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or any such Paying Agent, before being required to make any such
repayment, may, at the expense of the Company, either mail to each Noteholder
affected, at the address shown in the register of the Notes maintained by the
Registrar pursuant to Section 2.03 hereof, or cause to be published once a week
for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in the City
of New York, New York, a notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such mailing or publication, any unclaimed balance of such moneys then
remaining will be repaid to the Company. After payment to the Company,
Noteholders entitled to the money must look only to the Company for payment as
general creditors unless applicable abandoned property law designates another
person.
Section 9.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money in accordance with Section 9.01 hereof by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 9 until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 9.01; provided, however, that if the Company has made any payment
of principal of or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 10
DEFEASANCE AND COVENANT DEFEASANCE
Section 10.01. Applicability of Article; Company Option to Effect Defeasance
The Company may at its option by a Board Resolution at any
time, with respect to the Notes elect to have Section 10.02 or Section 10.03
hereof be applied to the outstanding Notes upon compliance with the conditions
set forth below in this Article 10.
Section 10.02. Defeasance and Discharge.
Upon the Company's exercise of the option described in Section
10.01 above applicable to this Section with respect to the Notes, the Company
shall be deemed to have been discharged from its obligations with respect to the
Notes on the date the conditions set forth in Section 10.04 below are satisfied
(hereinafter, "Defeasance"). For this purpose, such Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Notes and to have satisfied all its other obligations under
such Notes and this Indenture insofar as such Notes are concerned (and the
Trustee, at the expense of the Company, shall, subject to Section 10.06 hereof,
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of outstanding Notes to receive solely from the trust funds
described in Section 10.04 hereof and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Notes when such
payments are due, (B) the Company's obligations with respect to such Notes under
Sections 2.03, 2.04, 2.05, 2.06, 2.07 and 2.08 hereof, (C) the rights, powers,
trusts, duties, and immunities of the Trustee hereunder (including claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof) and (D) this
Article 10. Subject to compliance with this Article 10, the Company may exercise
its option under this Section 10.02 with respect to the Notes notwithstanding
the prior exercise of its option under Section 10.03 below with respect to the
Notes.
Section 10.03. Covenant Defeasance.
Upon the Company's exercise of the option in Section 10.01
above applicable to this Section with respect to the Notes, the Company shall be
released from its obligations under Article III, Sections 4.04, 4.05, 4.06,
4.10, 4.11 and 4.12, and clause (iii) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section
10.04 below are satisfied (hereinafter, "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section or portion thereof, whether directly or
indirectly by reason of any reference elsewhere herein to any such specified
Section or portion thereof or by reason of any reference in any such specified
Section or portion thereof to any other provision herein or in any other
document, but the remainder of this Indenture and the Notes shall be unaffected
thereby.
Section 10.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
Section 10.02 or Section 10.03 above to the outstanding Notes:
(1) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who shall
agree to comply with the provisions of this Article 10
applicable to it) as funds in trust for the purpose of making
the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the
Notes, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms
will provide, not later than the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient,
in the opinion of a nationally-recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of and accrued
interest on the outstanding Notes at the maturity date of such
principal or interest;
(2) no Event of Default or Default with respect to
the Notes shall have occurred and be continuing on the date of
such deposit, or shall have occurred and be continuing at any
time during the period ending on the 91st day after the date
of such deposit or, if longer, ending on the day following the
expiration of the longest preference period under any
Bankruptcy Law applicable to the Company in respect of such
deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(3) such Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest for purposes
of the TIA with respect to any securities of the Company;
(4) such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute default
under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound;
(5) in the case of an election under Section 10.02
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that the Company has received from,
or there has been published by, the Internal Revenue Service a
ruling to the effect that, and such opinion shall confirm
that, the Holders of the outstanding Notes or persons in their
positions will not recognize income, gain or loss for Federal
income tax purposes as a result of such Defeasance and will be
subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if
such Defeasance had not occurred;
(6) in the case of an election under Section 10.03
hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such Covenant
Defeasance and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not
occurred;
(7) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to
either the Defeasance under Section 10.02 above or the
Covenant Defeasance under Section 10.03 above (as the case may
be) have been complied with; and
(8) the Company shall have delivered to the Trustee
an Officers' Certificate stating its intention to effect a
Defeasance pursuant to the provisions of this Article 10 at
least sixty (60) days prior to such Defeasance.
Section 10.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous
Section 10.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 10.04 in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due
thereon in respect of principal and accrued interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 10.04 above or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 10 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 10.04 above which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Defeasance or Covenant
Defeasance.
Section 10.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 10.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article 10 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 10.01;
provided, however, that if the Company has made any payment of principal of or
accrued interest on any Notes because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
Section 11.02. Notices.
Any notice or communication shall be given in writing
and delivered in person, sent by telex or telephone facsimile, delivered by
commercial courier service or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16195
Attention: Colin Higgin, Esq.
Copy to:
Buchanan Ingersoll Professional Corporation
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, Pennsylvania 15219
Attention: Carl E. Rothenberger, Jr., Esq.
If to the Trustee:
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Department
Such notices or communications shall be effective when
received and shall be sufficiently given if so given within the time prescribed
in this Indenture.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Noteholder shall be
mailed to him by first class mail, postage prepaid, at his address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA S-313(c), to the extent required by the
TIA.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication to a Noteholder is mailed in the
manner provided above, it shall be deemed duly given, whether or not the
addressee receives it.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
Section 11.03.Communications by Holders with Other Holdersders
Noteholders may communicate pursuant to TIA S-312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA S-312(c).
.ection 11.04. Certificate and Opinion as to Conditions.
Upon any request or application by the Company to
the Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 11.05 below) stating that, in
the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 11.05 below) stating that, in
the opinion of such counsel, all such conditions precedent
have been complied with.
Section 11.05. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA S-314(a)(4)) shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature
and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of such Person,
it or he has made such examination or investigation as is
necessary to enable it or him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such covenant or condition has been complied
with.
Section 11.06. When Treasury Notes Disregarded.
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or such obligor shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
knows are so owned shall be so disregarded. Notes so owned which have been
pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to the
Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or such obligor.
Section 11.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or
meetings of Noteholders. The Registrar and Paying Agent may make reasonable
rules for their functions.
Section 11.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A
"Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day
on which banking institutions are not required to be open in the State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
Section 11.09. Governing Law.
The laws of the State of New York shall govern this Indenture
and the Notes without regard to principles of conflicts of law.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan, security or debt agreement of the Company or any Subsidiary. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 11.11. No Recourse against Others.
No recourse for the payment of the principal of or accrued
interest on any of the Notes, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any of the Notes, or because of the creation of any Indebtedness represented
thereby, shall be had against any stockholder, officer, director or employee, as
such, past, present or future, of the Company or of any successor corporation or
against the property or assets of any such stockholder, officer, employee or
director, either directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the Notes are solely obligations of the
Company, and that no such personal liability whatever shall attach to, or is or
shall be incurred by, any stockholder, officer, employee or director of the
Company or any successor corporation because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or the Notes or implied therefrom, and
that any and all such personal liability of, and any and all claims against
every stockholder, officer, employee and director, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of the Notes. It is understood that this
limitation on recourse is made expressly for the benefit of any such
shareholder, employee, officer or director and may be enforced by any of them.
Section 11.12. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee, any additional trustee
and any Paying Agents in this Indenture shall bind its successor.
Section 11.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 11.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 11.15. Separability.
Each provision of this Indenture shall be considered separable
and, if for any reason any provision which is not essential to the effectuation
of the basic purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
[The rest of this page has been intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed, and attested, all as of the date and year first written above.
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ James Brown
Name: James Brown
Title: VP
WITNESS:
Colin H. Higgin
Name: Colin H. Higgin
Assistant Secretary
BANK OF MONTREAL TRUST COMPANY, as Trustee
By: /s/ Amy Roberts
Name: Amy Roberts
Title: AVP
WITNESS:
/s/ R.P. Bourgerie
Name: R.P. Bourgerie
<PAGE>
Exhibit A
(Face of Note)
10 1/2% Senior Notes due 2004
No. $__________
ADELPHIA COMMUNICATIONS CORPORATION
promises to pay to or registered assigns, the principal sum of
_____________________ Dollars on July 15, 2004.
Interest Payment Dates: January 15, and July 15
Record Dates: January 1, and July 1
Dated:
ADELPHIA COMMUNICATIONS CORPORATION
By
Name:
Title:
(SEAL)
This is one of the Notes
referred to in the within-mentioned Indenture:
BANK OF MONTREAL TRUST COMPANY,
as Trustee
By:
Authorized Signature
<PAGE>
A-11
(Back of Note)
10 1/2% Senior Notes due 2004
[Unless and until it is exchanged in whole or in part for
Notes in definitive form, this Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]1/
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (4) TO INSTITUTIONAL
ACCREDITED INVESTORS IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Adelphia Communications Corporation, a Delaware
corporation (the "Company") promises to pay interest on the principal amount of
this Note at 10 1/2% per annum from July 7, 1997 until July 15, 2004 and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, semi-annually in arrears on January 15 and July
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
January 15, 1998. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal from
time to time on demand at a rate equal to the per annum rate on the Notes then
in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in
respect of the Notes represented by the Global Note (including principal,
interest and Liquidated Damages, if any) by wire transfer of immediately
available funds to the accounts specified by the Note Custodian. With respect to
Notes issued in definitive form, the Company shall make all payments of
principal, 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 having an aggregate principal amount of $100,000 or more, the Holders of
which have given wire transfer instructions to the Company 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. The Notes represented by the Global Note 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. The Company expects that secondary
trading in the Definitive Notes also will be settled in immediately available
funds.
3. PAYING AGENT AND REGISTRAR. Initially, Bank of Montreal
Trust Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Notes may be presented for registration of transfer and exchange
at the offices of the Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of July 7, 1997 ("Indenture") between the Company and 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, as amended (15
U.S. Code SS-77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
Notes are senior unsecured obligations of the Company limited to $250 million in
aggregate principal amount.
5. MANDATORY REDEMPTION. Except as set forth in paragraph 6
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.
6. REPURCHASE AT OPTION OF HOLDER. Within 50 days of (i) the
proposed occurrence of a Change of Control or (ii) the occurrence of Change of
Control Triggering Event, the Company shall be required to make an offer (a
"Change of Control Offer") to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder's Notes at a purchase price equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase, which date shall be
no later than 50 days from the date such notice is mailed (the "Change of
Control Payment Date"). Within 50 days of (i) the proposed occurrence of a
Change of Control or (ii) the occurrence of Change of Control Triggering Event,
the Company shall mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture. Such right
to require the repurchase of Notes shall not continue after discharge of the
Company from its obligations with respect to the Notes. The board of directors
of the Company may not waive this provision.
7. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture.
8. PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
9. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to issue up to $100,000,000 in aggregate
principal amount of additional Notes, to transfer, assign, mortgage or pledge
any property to the Trustee and otherwise comply with the covenant to secure
Notes equally, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
10. DEFAULTS AND REMEDIES. An Event of Default occurs if: (i)
the Company defaults in the payment when due of any interest on, or Liquidated
Damages with respect to, any Note and such default continues for a period of 30
days; (ii) the Company defaults in the payment of the principal of any Note at
its maturity; (iii) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in the Indenture or the Notes for 60
days after written notice to the Company by the Trustee or the Holders of at
least 25% in principal amount of the Notes then outstanding; (iv) the Company
fails to pay when due principal, interest or premium aggregating $10,000,000 or
more with respect to any Indebtedness of the Company 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 10 days after written notice; (v) a final judgment or final judgments for
the payment of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries and such judgment or
judgments remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
judgments exceeds $10 million; or (vi) the Company or any Restricted Subsidiary
with liabilities of greater than $10,000,000 under GAAP as of the date of the
event described in this clause, pursuant to or within the meaning of Bankruptcy
Law: (a) commences a voluntary case, (b) consents to the entry of an order for
relief against it in an involuntary case, (c) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (d) makes a
general assignment for the benefit of its creditors, (vii) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for
relief against the Company, or any Restricted Subsidiary with liabilities of
greater than $10,000,000 under GAAP as of the effective date of such order or
decree in an involuntary case, (b) appoints a custodian of the Company, or any
Restricted Subsidiary of Restricted Subsidiary with liabilities of greater than
$10,000,000 under GAAP as of the effective date of such order or decree or for
all or substantially all of its property or (c) orders the liquidation of the
Company, or any Restricted Subsidiary with liabilities greater than $10,000,000
under GAAP as of the effective date of such order or decree; and the order or
decree remains unstayed and in effect for 60 consecutive days. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case an Event
of Default specified in clauses (6) or (7) of Section 6.01 of the Indenture
occurs with respect to the Company, or a Restricted Subsidiary with liabilities
of greater than $10,000,000 under GAAP as of the effective date of such order or
decree, all outstanding Notes will become due and payable without further action
or notice. Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of the principal of and Liquidated Damages, if any, or interest on, the
Notes (provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequence, including any related payment default) or a default with respect to
any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Note affected.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required,
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default and what action
the Company is taking or proposes to take thereto.
11. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
12. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability including any rights against any general partner of the Company in its
capacity as general partner. The waiver and release are part of the
consideration for the issuance of the Notes.
13. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
15. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Notes Registration Rights Agreement dated as of July 7, 1997,
between the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Colin H. Higgin, Esq.
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:_______________
Your Signature:
(Sign exactly as your name appears
on the face of this Note)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Article 3 of the Indenture, check the box below:
[GRAPHIC OMITTED]Article 3
If you want to elect to have only part of the Note purchased
by the Company pursuant to Article 3 of the Indenture, state the amount you
elect to have purchased: $_______________
Date:____________________ Your Signature:
(Sign exactly as your name appears
on the Note)
Tax Identification No.:__________
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF EXCHANGES OF NOTES2/
The following exchanges of a part of this Global Note for
other Notes have been made:
<S> <C> <C> <C> <C>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this authorized officer of
Principal Amount of Principal Amount of Global Note following Trustee or Note
Date of Exchange this this such decrease (or Custodian
Global Global increase)
Note Note
</TABLE>
<PAGE>
B-1-3
B-1-1
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by one or more Definitive Notes (CUSIP No. __________) and
registered with the Registrar in the name of
_________________________________________ (the "Transferor"). The Transferor has
requested an exchange or transfer of such Definitive Note(s) in the form of an
equal principal amount of Notes evidenced by one or more Definitive Notes (CUSIP
No. __________), to be delivered to the Transferor or, in the case of a transfer
of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being acquired for the
Transferor's own account, without transfer;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
Company;
or
[GRAPHIC OMITTED] Surrendered Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Smith Barney Inc., Bear, Stearns &
Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc. (the
"Initial Purchasers"), the initial purchasers of such Notes being transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: Adelphia Communications Corporation
Smith Barney Inc.
<PAGE>
B-2-3
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
GLOBAL NOTE TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by the Global Note (CUSIP No. __________) held with the
Depository in the name of ________________ (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in the Notes to a Person
who will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Definitive Notes (CUSIP No. __________), to be
registered with the Registrar in the name of ______________.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
beneficial owner of such Notes;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Smith Barney Inc., Bear,
Stearns & Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA)
Inc. (the "Initial Purchasers"), the initial purchasers of such Notes being
transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: Adelphia Communications Corporation
Smith Barney Inc.
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
DEFINITIVE NOTE TO GLOBAL NOTE
(Pursuant to Section 2.06(e) of the Indenture)
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
U.S.A.
Re: 10 1/2% Senior Notes due 2004 of Adelphia Communications Corporation.
Reference is hereby made to the Indenture, dated as of July 7,
1997 (the "Indenture"), among Adelphia Communications Corporation (the
"Company"), as Issuer and Bank of Montreal Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by one or more Definitive Notes (CUSIP No. __________) and
registered with the Registrar in the name of
_________________________________________ (the "Transferor"). The Transferor has
requested a transfer of such Definitive Notes to a Person who will take delivery
thereof in the form of an equal beneficial interest in the Global Note (CUSIP
No. ____________).
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
[GRAPHIC OMITTED] the Surrendered Notes are being transferred to the
beneficial owner of such Notes;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that
the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[GRAPHIC OMITTED] the Surrendered Notes are being transferred pursuant
to an effective registration statement under the Securities
Act;
or
[GRAPHIC OMITTED] such transfer is being effected pursuant to an
exemption from the registration requirements of the Securities
Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that the Notes are being transferred
in compliance with the transfer restrictions applicable to the
Global Note and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
Upon giving effect to this request to exchange a Definitive
Note for a beneficial interest in the Global Note, the
resulting beneficial interest shall be subject to the
restrictions on transfer applicable to the Global Note
pursuant to the Indenture and the Securities Act.
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Smith Barney Inc., Bear,
Stearns & Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA)
Inc. (the "Initial Purchasers"), the initial purchasers of such Notes being
transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: Adelphia Communications Corporation
Smith Barney Inc.
1. This paragraph should be included only if the Note is issued in global form.
2. This should be included only if the Note is issued in global form.
INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE
NUMBER SHARES
ADELPHIA COMMUNICATIONS CORPORATION
13% SERIES A CUMULATIVE EXCHANGEABLE PREFERRED STOCK
CUSIP:
This Certifies that ________________________________ is the registered holder of
______________________ Shares of 13% Series A Cumulative Exchangeable Preferred
Stock transferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this _____________ day of ___________________ A.D. 19__
/s/ /s/
[Vice President] [Assistant Secretary]
<PAGE>
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]1
For Value Received, _______hereby sell, assign and transfer unto
_________________Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint______________________________________Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated _________________ 19__
In presence of ______________________________________
1 [For Global Certificate Only]
INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE
NUMBER SHARES
ADELPHIA COMMUNICATIONS CORPORATION
SERIES C CONVERTIBLE PREFERRED STOCK
This Certifies that________________________________ is the registered holder of
________________________________ Shares of Series C Convertible Preferred Stock
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this _____________ day of ___________________ A.D. 19__
/s/ /s/
[Vice President] [Assistant Secretary]
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE FEDERAL OR STATE
SECURITIES LAW AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
UNLESS, EXCEPTAS PROVIDED IN THE PREFERRED STOCK PURCHASE AGREEMENT, THE HOLDER
HEREOF DELIVERS TO THE ISSUER HEREOF AN OPINION OF COUNSEL, WHICH OPINION AND
COUNSEL SHALL BE SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT THE PROPOSED
TRANSFER DOES NOT REQUIRE ANY SUCH REGISTRATION.
For Value Received, _______hereby sell, assign and transfer unto
____________Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint______________________________________Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated _________________ 19__
In presence of ____________________________________________
ADELPHIA COMMUNICATIONS CORPORATION
$150,000,000 10 1/2% Senior Notes due 2004
$95,000,000 13% Series A Cumulative Exchangeable Preferred Stock
PURCHASE AGREEMENT
July 1, 1997
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation
(the "Company"), proposes, upon the terms and conditions set forth herein, to
issue and sell to you, as the initial purchasers (the "Initial Purchasers"), (a)
$150,000,000 in aggregate principal amount of its 10 1/2% Senior Notes due 2004
(the "Senior Notes") and (b) an aggregate of 950,000 shares (the "Shares") of
13% Series A Cumulative Exchangeable Preferred Stock, par value $.01 per share
(Liquidation Preference $100.00 per share) (the "Exchangeable Preferred Stock").
The Senior Notes will (i) have the terms and provisions which are summarized in
the Offering Memorandum (as defined herein), (ii) be in the forms specified by
the Initial Purchasers pursuant to Section 3 hereof, and (iii) be issued
pursuant to the provisions of an Indenture, to be dated as of July 7, 1997 (the
"Indenture"), between the Company and Bank of Montreal Trust Company, as trustee
(the "Trustee"). The Shares will (i) have the terms and provisions which are
summarized in the Offering Memorandum (as defined herein), (ii) be in the forms
specified by the Initial Purchasers pursuant to Section 3 hereof, (iii) be
issued pursuant to the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions thereof of 13% Series A Cumulative
Exchangeable Preferred Stock and 13% Series B Cumulative Exchangeable Preferred
Stock of Adelphia Communications Corporation (the "Certificate of Designations")
and (iv) be exchangeable as set forth in the Certificate of Designations for the
Company's 13% Senior Subordinated Exchange Debentures due 2009 (the "Exchange
<PAGE>
Debentures" and collectively with the Senior Notes and the Exchangeable
Preferred Stock, the "Initial Securities").
The Company also proposes to issue and sell, pursuant to a
separate purchase agreement, 550,000 shares (the "Highland Shares") of the
Exchangeable Preferred Stock to Highland Holdings. Unless the context otherwise
requires, references herein to the Exchangeable Prefered Stock include the
Highland Shares.
The Company wishes to confirm as follows its agreement with
you the Initial Purchasers in connection with the purchase and resale of the
Senior Notes and the Shares.
Preliminary Offering Memorandum and Offering Memorandum. The Senior
Notes and the Shares will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company has
prepared a preliminary offering memorandum, dated June 23, 1997, which includes
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1997 and the Company's Form 10-K/A dated July 29, 1996 (the "Preliminary
Offering Memorandum"), and an offering memorandum, dated July 1, 1997, which
includes the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997 and the Company's Form 10-K/A dated July 29, 1996 (the "Offering
Memorandum"), setting forth information regarding the Company, the Initial
Securities and the New Securities (as defined herein). Any references herein to
the Preliminary Offering Memorandum and the Offering Memorandum shall be deemed
to include all amendments and supplements thereto, if any. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Offering Memorandum in connection with the offering and resale of the
Senior Notes and the Shares by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to
make offers (the "Exempt Resales") of the Senior Notes and the Shares purchased
by the Initial Purchasers hereunder only on the terms set forth in the Offering
Memorandum, and Section 2 hereof, as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, solely to
persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers" as defined in Rule 144A under the Act ("QIBs") (such
persons also being referred to herein as the "Eligible Purchasers").
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, the Initial Securities (and all securities
issued in exchange therefor, in substitution thereof) shall bear the following
legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION
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<PAGE>
REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS."
It is also understood and acknowledged that holders (including
subsequent transferees) of the Initial Securities will have the registration
rights set forth (i) with respect to the Senior Notes, in the registration
rights agreement (the "Notes Registration Rights Agreement"), to be dated the
Closing Date, in substantially the form of Exhibit A hereto, for so long as such
Senior Notes constitute "Transfer Restricted Securities" (as defined in the
Notes Registration Rights Agreement), and (ii) with respect to the Exchangeable
Preferred Stock and the Exchange Debentures, in the registration rights
agreement (the "Exchangeable Preferred Stock Registration Rights Agreement" and
collectively with the Notes Registration Rights Agreement, the "Registration
Rights Agreements"), to be dated the Closing Date, in substantially the form of
Exhibit B hereto, for so long as such Exchangeable Preferred Stock or Exchange
Debentures constitute "Transfer Restricted Securities" (as defined in the
Exchangeable Preferred Stock Registration Rights Agreement). Pursuant to such
Registration Rights Agreements, the Company will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein, (i) a registration statement under the Act relating to (a)
the Company's 10 1/2% Senior Notes due 2004 (the "New Notes") to be offered in
exchange for the Senior Notes, (b) the Company's 13% Series B Cumulative
Exchangeable Preferred Stock to be offered in exchange for the Exchangeable
Preferred Stock (the "New Exchangeable Preferred Stock") and (c) the Company's
13% Senior Subordinated Exchange Debentures due 2009 to be offered in exchange
for the Exchange Debentures (the "New Exchange Debentures") (the "Registered
Exchange Offer") and (ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Act relating to the resale by certain
holders of the Initial Securities, and to use its best efforts to cause such
registration statement to be declared effective. As used herein, (i) the New
Notes, the New Exchangeable Preferred Stock and the New Exchange Debentures are
hereinafter referred to collectively as the "New Securities," (ii) the Senior
Notes and the New Notes are hereinafter referred to collectively as the "Notes,"
(iii) the Exchangeable Preferred Stock, the Highland Shares and the New
Exchangeable Preferred Stock are hereinafter referred to collectively as the
"Preferred Stock," (iv) the Exchange Debentures and the New Exchange Debentures
are hereinafter referred to collectively as the "Debentures" and (v) the Initial
Securities and the New Securities are hereinafter referred to collectively as
the "Securities." This Agreement, the Indenture, the indenture governing the
Exchange Debentures (the "Exchange Indenture"), the Registration Rights
Agreements, the Certificate of Designations and the Securities are hereinafter
referred to collectively as the "Operative Documents."
Agreements to Sell, Purchase and Resell. The Company
hereby agrees, on the basis of the representations, warranties and agreements of
the Initial Purchasers contained herein and subject to all the terms and
conditions set forth herein, to issue and sell to the Initial Purchasers and,
upon the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
each Initial Purchaser agrees severally and not jointly to purchase from the
Company, (i) with respect to the Senior Notes, at a purchase price of 99.2666%
of the principal amount thereof and (ii) with respect to the Shares at a
purchase price per share of $98.8421, the principal amount of Senior Notes and
the number of Shares set forth opposite the name of such Initial Purchaser in
Schedule I hereto. The Company shall not be obligated to deliver any (i) of the
Senior Notes to be delivered hereunder except upon payment for all of the Senior
Notes to be purchased as provided herein or (ii) Shares to be delivered
hereunder except upon payment for all of the Shares to be purchased as provided
herein.
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<PAGE>
Each of the Initial Purchasers hereby represents and
warrants to the Company that it will offer the Senior Notes and the Shares for
sale upon the terms and conditions set forth in this Agreement and in the
Offering Memorandum. Each of the Initial Purchasers hereby represents and
warrants to, and agrees with, the Company that such Initial Purchaser (i) is
either a QIB or other institutional "accredited investor," as defined in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited Institution"), in
either case with such knowledge and experience in financial and business matters
as are necessary in order to evaluate the merits and risks of an investment in
the Senior Notes and the Shares; (ii) is purchasing the Senior Notes and Shares
pursuant to a private sale exempt from registration under the Act; (iii) in
connection with the Exempt Resales, will solicit offers to buy the Senior Notes
and the Shares only from, and will offer to sell the Senior Notes and the Shares
only to, the Eligible Purchasers in accordance with this Agreement and on the
terms contemplated by the Offering Memorandum; and (iv) will not offer or sell
the Senior Notes or the Shares nor has it offered or sold the Senior Notes or
the Shares by, or otherwise engaged in, any form of general solicitation or
general advertising (within the meaning of Regulation D; including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising) in connection with the offering of
the Senior Notes and the Shares. The Initial Purchasers have advised the Company
that the Initial Purchasers will initially offer (i) the Senior Notes to
Eligible Purchasers at a price of 100% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance of the Senior Notes and (ii)
the Shares to Eligible Purchasers at a price of $100 per Share. Such prices may
be changed by the Initial Purchasers at any time thereafter without notice.
Each of the Initial Purchasers understands that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 7(d) and 7(h) hereof, counsel to the Company and counsel to
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby
consent to such reliance.
Delivery of the Senior Notes and the Shares and
Payment Therefor. Delivery to the Initial Purchasers of and payment for the
Senior Notes and the Shares shall be made at the office of Latham & Watkins, 885
Third Avenue, Suite 1000, New York, New York 10022 at 9:00 A.M., New York City
time, on July 7, 1997 (the "Closing Date"). The place of closing for the Senior
Notes and the Shares and the Closing Date may be varied by agreement between the
Initial Purchasers and the Company.
The Senior Notes and the Shares will be delivered to
the Initial Purchasers against payment of the purchase price therefor in
immediately available funds. The Senior Notes and the Shares will be evidenced
by one or more global securities in definitive form (the "Global Securities"),
and will be registered in the name of Cede & Co. as nominee of The Depository
Trust Company ("DTC"). The Senior Notes and the Shares to be delivered to the
Initial Purchasers shall be made available to the Initial Purchasers in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
Agreements of the Company. The Company agrees with
the Initial Purchasers as follows:
The Company will furnish to the Initial Purchasers,
without charge, such number of copies of the Offering Memorandum as the Initial
Purchasers may reasonably request.
4
<PAGE>
The Company will not make any amendment or supplement
to the Preliminary Offering Memorandum or to the Offering Memorandum of which
the Initial Purchasers shall not previously have been advised or to which the
Initial Purchasers shall reasonably object after being so advised, including by
way of filing any document with the Commission that would be incorporated
therein by reference.
Prior to the execution and delivery of this
Agreement, the Company shall have delivered or will deliver to the Initial
Purchasers, without charge, in such quantities as the Initial Purchasers shall
have requested or may hereafter reasonably request, copies of the Preliminary
Offering Memorandum. The Company consents to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Senior Notes or
the Shares are offered by the Initial Purchasers and by dealers, prior to the
date of the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Company. The Company consents to the use of the Offering
Memorandum in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Senior Notes or the Shares are offered by the Initial
Purchasers and by all dealers to whom Senior Notes or Shares, may be sold, in
connection with the offering and sale of the Senior Notes and the Shares.
If, at any time prior to completion of the
distribution of the Senior Notes and the Shares by the Initial Purchasers to
Eligible Purchasers, any event shall occur that in the judgment of the Company,
or in the opinion of counsel for the Initial Purchasers, should be set forth in
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Offering Memorandum in order to comply with
any law, the Company will forthwith prepare an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Initial Purchasers and
dealers a reasonable number of copies thereof.
The Company will cooperate with the Initial
Purchasers and with their counsel in connection with the qualification of the
Senior Notes and the Shares for offering and sale by the Initial Purchasers and
by dealers under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
qualifications; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Senior Notes or the
Shares, in any jurisdiction where it is not now so subject.
So long as any of the Securities are outstanding, the
Company will furnish to the Initial Purchasers (i) as soon as available, a copy
of each report of the Company mailed to stockholders generally or filed with any
stock exchange or regulatory body and (ii) from time to time such other
information concerning the Company as the Initial Purchasers may reasonably
request.
If this Agreement shall terminate or shall be
terminated after execution and delivery pursuant to any provisions hereof
(otherwise than by notice given by the Initial Purchasers terminating this
Agreement pursuant to Section 10 hereof) or if this Agreement shall be
terminated by the Initial Purchasers because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Initial Purchasers for all
out-of-pocket expenses (including reasonable fees and expenses of their counsel)
reasonably incurred by them in connection herewith, but without any further
obligation on the part of the Company for loss of profits or otherwise.
5
<PAGE>
The Company will apply the net proceeds from the sale
of the Senior Notes and the Shares to be sold by it hereunder and from the sale
of the Highland Shares and the Company's Series C Cumulative Convertible
Preferred Stock (the "Convertible Preferred Stock") substantially in accordance
with the description set forth in the Offering Memorandum under the caption "Use
of Proceeds."
Except as stated in this Agreement and in the
Preliminary Offering Memorandum and Offering Memorandum, the Company has not
taken, nor will it take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or manipulation
of the price of the Securities to facilitate the sale or resale of the
Securities. Except as permitted by the Act, the Company will not distribute any
offering material in connection with the Exempt Resales.
The Company will use its best efforts to permit the
Securities to be designated Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL Market and to permit the Securities to be
eligible for clearance and settlement through DTC.
From and after the Closing Date, so long as any of
the Securities are outstanding and are "restricted securities" within the
meaning of the Rule 144(a)(3) under the Act or, if earlier, until two years
after the Closing Date, and during any period in which the Company is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company will furnish to holders of the
Securities and prospective purchasers of the Securities designated by such
holders, upon request of such holders or such prospective purchasers, the
information (the "Additional Company Information") required to be delivered
pursuant to Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in
connection with resales of the Securities.
The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 relating to issuers doing
business with Cuba.
The Company agrees not to sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale of the Senior Notes
and the Shares in a manner that would require the registration under the Act of
the sale to the Initial Purchasers or the Eligible Purchasers of the Senior
Notes and the Shares.
The Company agrees to comply with all the terms and
conditions of the Registration Rights Agreements and all agreements set forth in
the representation letters of the Company to DTC relating to the approval of the
Securities by DTC for "book entry" transfer.
The Company agrees to cause the Registered Exchange
Offer to be made in the appropriate form, as contemplated by the Registration
Rights Agreements, to permit registration of the New Securities to be offered in
exchange for the Initial Securities, and to comply with all applicable federal
and state securities laws in connection with the Registered Exchange Offer.
The Company agrees that prior to any registration of
the Senior Notes pursuant to the Notes Registration Rights Agreement, or at such
earlier time as may be required, the Indenture shall be qualified under the
Trust Indenture Act of 1939 (the "1939 Act") and any necessary supplemental
indentures will be entered into in connection therewith.
6
<PAGE>
The Company agrees that prior to (i) any registration
of the Exchange Debentures pursuant to the Exchangeable Preferred Stock
Registration Rights Agreement or otherwise, or at such earlier time as may be
required, the Exchange Indenture shall be qualified under the 1939 Act and any
necessary supplemental indentures will be entered into in connection therewith.
The Company will not voluntarily claim, and will
resist actively all attempts to claim, the benefit of any usury laws against
holders of the Notes or the Debentures.
The Company agrees that on or prior to the Closing
Date, it shall cause the Certificate of Designations to be filed with the
appropriate authorities.
The Company agrees to consummate the sale of the
Highland Shares and the shares of the Convertible Preferred Stock prior to or
simultaneously with the consummation of the sale of the Senior Notes and the
Shares hereunder.
The Company will do and perform all things required
or necessary to be done and performed under this Agreement by it prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchasers'
obligations hereunder to purchase the Senior Notes and the Shares.
(v) The Company has furnished to you a "lock-up" letter with
respect to the Highland Shares, in form and substance satisfactory to you,
signed by Highland Holdings.
Representations and Warranties of the Company. The
Company represents and warrants to the Initial Purchasers that:
The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the offering of the
Senior Notes and the Shares. The Preliminary Offering Memorandum or the
Offering Memorandum, as the case may be, and any amendments or
supplements thereto did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Initial Purchasers concerning the Initial Purchasers expressly for use
therein (the "Initial Purchasers Information"). Each of the Preliminary
Offering Memorandum and the Offering Memorandum, as of its date,
contains all the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the Act.
The Company has not sustained since March 31, 1997
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Memorandum; and, since the respective dates as of which
information is given in the Offering Memorandum, there has not been any
reduction in the consolidated stockholders' equity or change in the
capital stock, as applicable (other than reductions in the ordinary
course of business consistent with prior periods), material increase in
the total amount of short-term debt (excluding trade payables) and
long-term debt of the Company or any of its material subsidiaries (the
"Subsidiaries") or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, partners' equity,
shareholders' equity or results
7
<PAGE>
of operations of the Company and its Subsidiaries,
otherwise than as set forth or contemplated in the Offering Memorandum;
Each of the Company and its Subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Offering Memorandum or such as do not affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Subsidiaries; and any real property and buildings held under lease by
the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries;
except in any case that would not have a material adverse effect on the
business, general affairs, management, financial position, partners
equity or shareholders' equity (other than reductions in the ordinary
course of business consistent with prior periods), results of
operations or prospects of the Company and its Subsidiaries, taken as a
whole (a "Material Adverse Effect");
(i) Each of the Subsidiaries that are partnerships
has been duly formed and is validly existing as a partnership in good
standing under the laws of its state of formation, with full power and
authority (partnership and other) to own its properties and conduct its
business as described in the Offering Memorandum, and has been duly
qualified as a foreign partnership for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction except where the failure to so qualify would not have a
Material Adverse Effect; and (ii) each of the Company and the
Subsidiaries that are corporations has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its state of incorporation, with full power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect;
Each of the Company and its Subsidiaries has the
ownership or authorized capitalizations, as the case may be, as set
forth in the Offering Memorandum, and all of the partnership interests
of the Subsidiaries that are partnerships and all of the issued shares
of capital stock of its Subsidiaries that are corporations have been
duly and validly authorized and issued and with respect to shares of
capital stock are fully paid and non-assessable; and all of the
partnership interests of the Subsidiaries disclosed in the Offering
Memorandum as being owned directly or indirectly by the Company and all
of the issued shares of capital stock of the Subsidiaries that are
corporations have been duly and validly authorized and issued are fully
paid and non-assessable and are owned directly or indirectly by the
Company free and clear of all liens, encumbrances, equities or claims
(other than liens to secure indebtedness under credit facilities
disclosed in the Offering Memorandum); and ownership of the various
interests and shares of the Company and its Subsidiaries is as
described in the Offering Memorandum;
The Notes have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will
8
<PAGE>
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture under which they are
to be issued; the Indenture has been duly authorized by the Company
and, when executed and delivered by the Company and the Trustee, the
Indenture will constitute a valid and legally binding instrument,
enforceable in accordance with its terms against the Company, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Notes and the
Indenture will conform to the descriptions thereof in the Offering
Memorandum and will be in substantially the form previously delivered
to the Initial Purchasers in connection with this transaction.
The shares of Exchangeable Preferred Stock have been
duly and validly authorized and, when issued and delivered pursuant to
this Agreement and the purchase agreement with respect to the Highland
Shares, will have been duly and validly issued, will be fully paid and
non-assessable, in the case of the Highland Shares, will have been
issued in compliance with all applicable federal and state securities
laws, and the Exchangeable Preferred Stock will be entitled to the
rights, privileges and preferences set forth in the Certificate of
Designations; the stockholders of the Company have no preemptive rights
with respect to the issuance of the Exchangeable Preferred Stock; the
Certificate of Designations has been duly authorized by the Company and
will be duly executed by the Company and filed as required; and the
Preferred Stock and the Certificate of Designations will conform to the
descriptions thereof in the Offering Memorandum and will be
substantially in the form previously delivered to the Initial
Purchasers in connection with this transaction.
The Debentures have been duly authorized and, when
issued and delivered in exchange for the Preferred Stock in accordance
with the terms of the Certificate of Designations, will have been duly
executed, authenticated, issued and delivered, and will constitute the
valid and legally binding obligations of the Company entitled to the
benefits provided by the Exchange Indenture under which they are to be
issued; the Exchange Indenture has been duly authorized by the Company
and, when executed and delivered by the Company and the Trustee
thereunder, the Exchange Indenture will constitute a valid and legally
binding instrument, enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Debentures and the Exchange Indenture will conform to the descriptions
thereof in the Offering Memorandum and will be in substantially the
form previously delivered to the Initial Purchasers in connection with
this transaction.
The shares of Convertible Preferred Stock have been
duly and validly authorized and, when issued and delivered pursuant to
the purchase agreement in respect thereof, will have been duly and
validly issued, will be fully paid and non-assessable, will have been
issued in compliance with all applicable federal and state securities
laws and will be entitled to the rights, privileges and preferences set
forth in the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions thereof of Series C
Cumulative Convertible Preferred Stock of Adelphia Communications
Corporation (the "Convertible Preferred Stock Certificate of
Designations"); the stockholders of the Company have no preemptive
rights with respect to the issuance of the Convertible Preferred Stock;
the Convertible Preferred Stock Certificate of Designations has been
duly authorized by the Company and will be duly executed by the Company
and filed as required; and the Convertible Preferred Stock and the
Convertible Preferred Stock Certificate of Designations will conform to
the descriptions thereof in the Offering Memorandum and will be
9
<PAGE>
substantially in the form previously delivered to the Initial
Purchasers in connection with this transaction.
The capital stock of the Company conforms to the
description thereof contained in the Offering Memorandum; all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
were not issued in violation of any preemptive rights; except as
disclosed in the Offering Memorandum, there are no outstanding (i)
securities or obligations of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock of the Company,
(ii) warrants, rights or options to subscribe for or purchase any such
capital stock or any such convertible or exchangeable securities or
obligations or (iii) obligations of the Company to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
None of the transactions contemplated by this
Agreement (including, without limitation, the use of the proceeds from
the sale of the Senior Notes and Exchangeable Preferred Stock) will
violate or result in a violation of Section 7 of the Exchange Act, or
any regulation promulgated thereunder, including, without limitation,
Regulations G, T, U, and X of the Board of Governors of the Federal
Reserve System;
Prior to the date hereof, none of the Company or any
of its affiliates (other than the Initial Purchasers or any person
acting on their behalf as to which the Company makes no representation)
has taken, directly or indirectly, any action which is designed to or
which has constituted or which might have been expected to cause or
result in stabilization or manipulation of the price of any security of
the Company in connection with the offering of the Securities;
Each of the Registration Rights Agreements has been
duly authorized by the Company and, when executed and delivered by the
Company, the Initial Purchasers, and, in the case of the Exchangeable
Preferred Stock Registration Rights Agreement, Highland Holdings will
constitute a valid and legally binding instrument, enforceable against
the Company in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and each of the Registration Rights Agreements will
conform to the description thereof in the Offering Memorandum and will
be in substantially the forms previously delivered to the Initial
Purchasers;
Neither (i) the issue and sale of the Notes and
Preferred Stock and the compliance by the Company with all of the
applicable provisions of the Notes and Preferred Stock, the Indenture,
the Exchange Indenture, the Certificate of Designations, the
Registration Rights Agreements, this Agreement and the documents
executed in connection with the sale of the Highland Shares and the
consummation of the transactions herein and therein contemplated nor
(ii) the issue and sale of the Convertible Preferred Stock and the
compliance by the Company with all of the applicable provisions of the
Convertible Preferred Stock and the documents executed in connection
with the sale thereof, will conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument (including, without
limitation, any license or franchise granted to the Company or one of
its Subsidiaries by a local franchising governmental body) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or has rights under or to which any
of the property or assets of the Company or any of
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its Subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or
bylaws of the Company or its Subsidiaries that are corporations or the
certificates of limited partnership or the partnership agreements of
its Subsidiaries that are partnerships, or any statute or any order,
rule or regulation of any court or regulatory or governmental agency or
body having jurisdiction over the Company or any of its Subsidiaries or
any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
regulatory or governmental agency or body is required for the issue and
sale of the Securities and the Convertible Preferred Stock or the
consummation by the Company of the transactions contemplated by this
Agreement, the Indenture, the Exchange Indenture, the Certificate of
Designations, the Registration Rights Agreements or the documents
executed in connection with the sale of the Highland Shares or the
Convertible Preferred Stock, other than (i) such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Senior Notes and the Shares by the Initial
Purchasers, (ii) the filing of registration statements by the Company
with the Commission pursuant to the Act pursuant to the Registration
Rights Agreements and in respect of the Convertible Preferred Stock and
(iii) such other consents, approvals, authorizations, registrations or
qualifications as may be required under the Act, state or foreign
securities or Blue Sky laws in connection with the exchange, offer or
resale registration contemplated in the Offering Memorandum and
described in the Registration Rights Agreements in connection with the
purchase and resale of the Senior Notes and Exchangeable Preferred
Stock and (iv) in respect of the Convertible Preferred Stock, and (iv)
as may be required by (x) the HartScott Rodino Antitrust Improvements
Act of 1976 ("Hart-Scott Rodino Act"), (y) federal or state securities
laws and regulations or (z) the laws, orders, regulations or
requirements regarding, or governmental authorizations to own or
operate, cable television systems or competitive local exchange carrier
networks and related facilities under, federal, state or local law, and
similar laws or regulations, in each case in connection with the
conversion of the Convertible Preferred Stock into Class A Common
Stock;
None of the Company or its Subsidiaries is in
violation of its certificate of incorporation or bylaws, as the case
may be, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other similar financing agreement or instrument or other
agreement or instrument (including, without limitation, any license or
franchise granted to the Company or a subsidiary by a local franchising
governmental body) to which the Company or a subsidiary is a party or
by which it or any of its properties may be bound, except for such
defaults as would not have individually or in the aggregate a Material
Adverse Effect;
The statements set forth in the Offering Memorandum
under the captions "Affiliates Purchase of Convertible Preferred
Stock," "Description of the Notes;" "Description of the Exchangeble
Preferred Stock and Exchange Debentures," "Terms Applicable to All
Securities" and "Description of Convertible Preferred Stock," insofar
as they purport to constitute a summary of the terms of such
securities, and under the captions "Business," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair
in all material respects;
When the Senior Notes and the Shares are issued and
delivered pursuant to this Agreement, the Senior Notes and the Shares
will not be of the same class (within the meaning of Rule 144A under
the Act) as securities of the Company which are listed on a national
securities
11
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exchange registered under Section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation system;
None of the Company or its Subsidiaries is or, after
giving effect to the offering and sale of the Senior Notes and
Exchangeable Preferred Stock, will be an "investment company", or an
entity "controlled" by an "investment company", as such terms are
defined in the United States Investment Company Act of 1940, as amended
(the "Investment Company Act");
None of the Company or any person acting on its
behalf (other than the Initial Purchasers, as to which the Company
makes no representation or warranty) has offered or sold the Senior
Notes or the Exchangeable Preferred Stock by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Act;
Except for the offering and sale of $350,000,000
aggregate principal amount of the Company's 97/8% Senior Notes due
2007, within the preceding six months, none of the Company or any other
person acting on behalf of the Company (other than the Initial
Purchasers, as to which the Company makes no representation or
warranty) has offered or sold to any person any Notes or Preferred
Stock, or any securities of the same or a similar class as the Notes or
the Preferred Stock, other than Senior Notes and Shares offered or sold
to the Initial Purchasers hereunder and Highland Shares to be sold to
Highland Holdings. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Notes or Preferred Stock or any substantially similar
security issued by the Company, within six months subsequent to the
date on which the distribution of the Notes or Preferred Stock has been
completed (as notified by the Initial Purchasers), is made under
restrictions and other circumstances reasonably designed not to affect
the status of the offer and sale of the Notes or Preferred Stock in the
United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Act;
None of the Company or any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
Other than as set forth in the Offering Memorandum
(including those matters referred to therein relating to general
rulemakings and similar matters relating generally to the cable
television industry), there are no legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a party or
of which any property of the Company or any of its Subsidiaries is the
subject which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or by others; and except with respect to general rulemakings and
similar matters relating generally to the cable television industry,
during the time the Systems (as defined below) have been owned by the
Company or a subsidiary (i) there has been no adverse judgment, order,
or decree issued by the United States Federal Communications Commission
(the "FCC") relating to any of the Systems that has not been disclosed
in the Offering Memorandum that would be required to be disclosed in a
public offering registered under the Act; (ii) there are no actions,
suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its
Subsidiaries or any System; and (iii) to the Company's
12
<PAGE>
knowledge, after due inquiry, there is no reasonable basis for any such
action, suit, proceeding or investigation;
Deloitte & Touche LLP, who have reported on the
financial statements of the Company, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
This Agreement has been duly authorized, executed and
delivered by the Company;
Except for matters covered by paragraph (bb) below or
with respect to matters that would not individually or in the aggregate
have a Material Adverse Effect, (i) the Company and its Subsidiaries
have made all filings, recordings and registrations with, and possess
all validations or exemptions, approvals, orders, authorizations,
consents, licenses, certificates and permits from, the FCC, applicable
public utilities and other federal, state and local regulatory or
governmental bodies and authorities or any subdivision thereof,
including, without limitation, cable television franchises, pole
attachment agreements, and cable antenna relay service, broadcast
auxiliary, earth station, business radio, microwave or special safety
radio service licenses issued by the FCC (collectively, the
"Authorizations") necessary or appropriate to own, operate and
construct the cable communication systems owned by them (the "Systems")
or otherwise for the operation of their businesses and are not in
violation thereof; (ii) all such Authorizations are in full force and
effect, and no event has occurred that permits, or after notice or
lapse of time could permit, the revocation, termination or modification
of any Authorization which is necessary or appropriate to own, operate
and construct the Systems or otherwise for the operation of any such
business; (iii) none of the Company or any of its Subsidiaries is in
violation of any duty or obligation required by the United States
Communications Act of 1934, as amended (the "Communications Act"), or
any FCC rule or regulation applicable to the operation of any portion
of any of the Systems; (iv) none of the Company or any of its
Subsidiaries is in violation of any duty or obligation required by
state or local laws, or local rules or regulations applicable to the
operation of any portion of any of the Systems; (v) there is not
pending or, to the best knowledge of the Company or any of its
Subsidiaries, threatened, any action by the FCC or state or local
regulatory authority to modify, revoke, cancel, suspend or refuse to
renew any Authorization; (vi) other than as described in the Offering
Memorandum, there is not now issued or outstanding or, to the best
knowledge of the Company or any of its Subsidiaries, threatened, any
notice of any hearing, material violation or material complaint against
the Company or any of its Subsidiaries with respect to the operation of
any portion of the Systems and none of the Company or its Subsidiaries
has any knowledge that any person intends to contest renewal of any
material Authorization;
(i) (A) The Company and its Subsidiaries have entered
into, or have rights under, all required programming agreements
(including, without limitation, all non-broadcast affiliation
agreements under which the Company and its Subsidiaries are accorded
retransmission rights relating to programming that the Systems provide
to their customers) that are material to the conduct of their business
as described in the Offering Memorandum; and (B) all such material
agreements are in full force and effect and none of the Company, any of
its Subsidiaries or any of its affiliates has received any written
notice of revocation or material modifications of such material
agreements; and (ii)(A) either the Company or its Subsidiaries has
entered into agreements with the television stations that have notified
the Company or its Subsidiaries that such station's respective consent
is required to carry such stations on the Systems or has ceased
carrying such stations; (B) all such agreements grant the Company or
one of its Subsidiaries retransmission
13
<PAGE>
consent in exchange for various non-cash consideration; and (C) all
such agreements are in full force and effect and are not subject to
revocation (except in the case of material breach by the Company or its
Subsidiaries) or material modifications, and no event has occurred that
permits, or after notice or lapse of time could permit, the revocation,
termination or material modification of any such agreement, except
where the failure of such agreements to be in full force and effect or
such revocation would not, in either case, individually or in the
aggregate have a Material Adverse Effect;
(aa) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, (i) all registration
statements and all other documents (including but not limited to annual
reports) required by the FCC in connection with the operation of the
Systems have been filed with the FCC; (ii) all frequencies within the
restricted aeronautical and navigational bands (i.e., 108-136 MHz and
225-400 MHz) which are currently being used in connection with the
operation of the Systems have been authorized for such use by the FCC;
(iii) each of the Systems subject to Equal Employment Opportunity
Commission ("EEO") compliance certification by the FCC has been
certified by the FCC for annual EEO compliance during the time such
Systems have been owned by the Company or its Subsidiaries; and (iv)
all towers associated with the Systems are in compliance with the rules
and regulations of the United States Federal Aviation Administration;
(bb) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, none of the Company or any of
its Subsidiaries is in breach or violation of, or in default under, any
of the terms, conditions or provisions of the Communications Act or the
rules, regulations or policies of the FCC thereunder;
(cc) (i) Except for matters that would not individually or in
the aggregate have a Material Adverse Effect, all statements of
accounts and any other filings that are required under Section 111 of
the United States Copyright Act of 1976, as amended, in connection with
the retransmission of any broadcast television and radio signals on the
Systems have been timely filed with the United States Copyright Office
and indicated royalty payments have been made for each System for each
accounting period during which such Systems have been owned by the
Company or its Subsidiaries; (ii) none of the Company, any of its
Subsidiaries or any System has received any inquiry or request from the
United States Copyright Office or from any other party challenging or
questioning any such statements of account or royalty payments; and
(iii) no claim of copyright infringement has been made or threatened in
writing against the Company, any of its Subsidiaries or any System;
(dd) Neither the execution and delivery of this Agreement, the
Indenture, the Certificate of Designations or the Registration Rights
Agreements, nor the consummation of the transactions contemplated
hereby and thereby or by the Offering Memorandum under "Use of
Proceeds," nor compliance with the terms, conditions and provisions
thereof by the Company, will conflict with the Communications Act or
the rules, regulations or policies of the FCC thereunder, or will cause
any suspension, revocation, impairment, forfeiture, nonrenewal or
termination of any material license, permit, franchise, certificate,
consent, authorization, designation, declaration, filing, registration
or qualification;
(ee) Neither the execution and delivery of this Agreement, the
Indenture, the Certificate of Designations, or the Registration Rights
Agreements, nor the execution, delivery, offer, issuance and sale of
the Senior Notes or the Exchangeable Preferred Stock, nor compliance
with
14
<PAGE>
the terms, conditions and provisions thereof by the Company, requires
any license, permit, franchise, certificate, consent, authorization,
designation, declaration, filing, registration or qualification by or
with the FCC.
Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Initial Purchaser and each person, if any,
who controls any Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or Offering
Memorandum, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
Initial Purchasers information furnished in writing to the Company by or on
behalf of the Initial Purchasers expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to the Preliminary Offering Memorandum shall not inure to the benefit of
any Initial Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Senior Notes or the Shares by such Initial
Purchaser to any person if the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the Preliminary
Offering Memorandum was corrected in the Offering Memorandum and such Initial
Purchaser sold Senior Notes or Shares to that person without sending or giving
at or prior to the written confirmation of such sale, a copy of the Offering
Memorandum (as then amended or supplemented) if the Company has previously
furnished sufficient copies thereof to the Initial Purchasers on a timely basis
to permit such sending or giving. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
If any action, suit or proceeding shall be brought
against the Initial Purchasers or any person controlling the Initial Purchasers
in respect of which indemnity may be sought against the Company, the Initial
Purchasers or such controlling person shall promptly notify the parties against
whom indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Initial Purchasers or any
such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Initial
Purchasers or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the named parties
to any such action, suit or proceeding (including any impleaded parties) include
both the Initial Purchasers or such controlling person and the indemnifying
parties and the Initial Purchasers or such controlling person shall have been
advised in writing by its counsel that representation of such indemnified party
and any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party shall not have the
right to assume the defense of such action, suit or proceeding on behalf of the
Initial Purchasers or such controlling person). It is understood, however, that
the indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Initial Purchasers and controlling persons not having actual or potential
differing interests with the Initial
15
<PAGE>
Purchasers or among themselves, which firm shall be designated in writing by
Smith Barney Inc., and that all such fees and expenses shall be reimbursed as
they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless the Initial
Purchasers, to the extent provided in paragraph (a), and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.
Each Initial Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Company and its directors and
officers, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the same extent as the
indemnity from the Company to the Initial Purchasers set forth in paragraph (a)
hereof, but only with respect to the Initial Purchasers Information furnished in
writing by or on behalf of the Initial Purchasers expressly for use in the
Preliminary Offering Memorandum or Offering Memorandum. If any action, suit or
proceeding shall be brought against the Company, any of its directors or
officers, or any such controlling person based on the Preliminary Offering
Memorandum or Offering Memorandum, and in respect of which indemnity may be
sought against the Initial Purchasers pursuant to this paragraph (c), the
Initial Purchasers shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof, the Initial Purchasers shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the Initial Purchasers' expense), and
the Company, its directors and officers, and any such controlling person shall
have the rights and duties given to the Initial Purchasers by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which the Initial Purchasers may otherwise have.
If the indemnification provided for in this Section 6
is unavailable (except if inapplicable according to its terms) to an indemnified
party under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Senior Notes and the Shares, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Initial Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offerings
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Initial Purchasers. The relative fault of the
Company on the one hand and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the Initial Purchasers on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(d)
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above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price of the Senior Notes and the Shares purchased by it and
distributed to the purchasers pursuant to Exempt Resales exceeds the amount of
any damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 6 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred but
only to the extent that such losses, claims, damages, liabilities or expenses
are required to be paid by an indemnified party. The indemnity and contribution
agreements contained in this Section 6 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Initial Purchasers or any person controlling any Initial Purchaser, the Company,
its directors or officers or any person controlling the Company, (ii) acceptance
of any Senior Notes and Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to an Initial Purchaser or any person
controlling an Initial Purchaser, or to the Company, its directors or officers
or any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
6.
No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
Conditions of the Initial Purchasers' Obligation. The
obligation of the Initial Purchasers to purchase the Senior Notes and the Shares
hereunder is subject to the following conditions:
At the time of execution of this Agreement and on the
Closing Date, no order or decree preventing the use of the Offering Memorandum,
or any order asserting that the sale of the Convertible Preferred Stock or the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending or, to the knowledge of
the Company, be contemplated. No stop order suspending the sale of the Senior
Notes or the Shares in any jurisdiction designated by the Initial Purchasers
shall have been issued and no proceedings for that purpose shall have been
commenced or shall be pending or, to the knowledge of the Company, shall be
contemplated.
Subsequent to the date as of which information is
given in the Offering Memorandum, except as otherwise stated in the Offering
Memorandum, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition (financial or
other), business, properties, net worth, or results of operations of the Company
or its Subsidiaries not contemplated by the Offering Memorandum, which in the
opinion of the Initial Purchasers, would
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<PAGE>
materially adversely affect the market for the Senior Notes or the Shares, or
(ii) any event or development relating to or involving the Company, any of its
Subsidiaries or any officer or director of the Company or any of its
Subsidiaries which makes any statement made in the Offering Memorandum untrue or
which, in the opinion of the Company and its counsel or the Initial Purchasers
and their counsel, requires the making of any addition to or change in the
Offering Memorandum in order to state a material fact required by any law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Offering Memorandum to reflect such
event or development would, in the opinion of the Initial Purchasers, materially
adversely affect the market for the Securities.
The Offering Memorandum shall have been printed and
copies thereof distributed to the Initial Purchasers in such quantities as shall
have been previously specified by the Initial Purchasers not later than 9:00
A.M., New York City time, on July 2, 1997, or at such later date and time as the
Initial Purchasers may approve in writing.
The Initial Purchasers shall have received on the
Closing Date an opinion of Buchanan Ingersoll Professional Corporation, counsel
for the Company, dated the Closing Date and addressed to the Initial Purchasers,
to the effect that:
The Company has been duly incorporated and
is validly existing as a
corporation in good standing under the laws of the state of its
formation with full corporate power and authority to own its properties
and conduct its business as described in the Offering Memorandum;
This Agreement has been duly authorized,
executed and delivered by the Company;
The Registration Rights Agreements have been
duly authorized, executed and delivered by the Company;
The Notes have been duly authorized and,
when issued and delivered pursuant to this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture and enforceable against the Company
in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles and further except that (a) 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 (b) waivers as to usury, stay or extension laws may
be unenforceable; and the Notes and the Indenture conform in all
material respects to the descriptions thereof in the Offering
Memorandum;
The Indenture has been duly authorized,
executed and delivered by the Company and will constitute a valid and
legally binding instrument enforceable in accordance with its terms
against the Company, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles and further except that (a) 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 (b)
waivers as to usury, stay or extension laws may be unenforceable;
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The shares of Exchangeable Preferred Stock
have been duly authorized and, when issued and delivered pursuant to
this Agreement and the purchase agreement with respect to the Highland
Shares, will have been duly and validly issued, will be fully paid and
non-assessable, and will be entitled to the rights, privileges and
preferences set forth in the Certificate of Designations which,
together with the Preferred Stock, conform in all material respects to
the descriptions thereof in the Offering Memorandum; the stockholders
of the Company have no preemptive rights with respect to the issuance
of the Exchangeable Preferred Stock; and the Certificate of
Designations has been duly authorized and executed by the Company and
filed with the appropriate authorities;
The shares of Convertible Preferred Stock
have been duly authorized and, when issued and delivered pursuant to
the purchase agreement in respect thereof, will have been duly and
validly issued, will be fully paid and non-assessable, and will be
entitled to the rights, privileges and preferences set forth in the
Convertible Preferred Stock Certificate of Designations which, together
with the Convertible Preferred Stock, conform in all material respects
to the descriptions thereof in the Offering Memorandum; the
stockholders of the Company have no preemptive rights with respect to
the issuance of the Convertible Preferred Stock; the Convertible
Preferred Stock Certificate of Designations has been duly authorized
and executed by the Company and filed with the appropriate authorities.
The Debentures have been duly authorized
and, when issued and delivered pursuant to the Certificate of
Designations, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Exchange Indenture
and enforceable against the Company in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles and
further except that (a) 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 (b) waivers as to
usury, stay or extension laws may be unenforceable; and the Debentures
and the Exchange Indenture conform in all material respects to the
descriptions thereof in the Offering Memorandum;
The Exchange Indenture has been duly
authorized, and when executed and delivered by the Company will
constitute a valid and legally binding instrument enforceable in
accordance with its terms against the Company, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles and further except that (a)
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 (b) waivers as to usury, stay or extension laws
may be unenforceable;
The Registration Rights Agreements have been
duly authorized by the Company and, when executed and delivered by the
parties thereto, will constitute valid and legally binding instruments,
enforceable in accordance with their terms against the Company,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights, to general equity principles and further
except that (a) 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 (b) waivers as to usury,
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stay or extension laws may be unenforceable; and the Registration
Rights Agreements conform in all material respects to the descriptions
thereof in the Offering Memorandum;
The issue and sale of the Convertible
Preferred Stock, the Notes and the Preferred Stock and the compliance
by the Company with all of the provisions of the Convertible Preferred
Stock and the documents executed in connection with the sale thereof,
the Notes and the Preferred Stock, the Certificate of Designations, the
Indenture, the Registration Rights Agreements, this Agreement and the
documents executed in connection with the sale of the Highland Shares
and the consummation of the transactions herein and therein
contemplated will not contravene the provisions of the certificate of
incorporation and bylaws of the Company, or to the best of our
knowledge, any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, except as may be
required by (x) the Hart-Scott Rodino Act, (y) federal or state
securities laws and regulations and (z) the laws, orders, regulations
or requirements regarding, or governmental authorizations to own or
operate, cable television systems or competitive local exchange carrier
networks and related facilities under federal, state or local law, and
similar laws or regulations, in each case in connection with the
conversion of the Convertible Preferred Stock into Class A Common
Stock;
The statements set forth in the Offering
Memorandum under the captions "Risk Factors -- Certain Tax
Considerations," "Affiliates Purchase of Convertible Preferred Stock;"
"Description of the Notes;" "Description of the Exchangeable Preferred
Stock and Exchange Debentures;" "Terms Applicable to Securities" and
"Description of Convertible Preferred Stock," insofar as they purport
to constitute a summary of the terms of such securities, the statements
set forth in the Offering Memorandum under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Financing Activities,"
insofar as they purport to describe the debt instruments referred to
therein and the statements set forth in the Offering Memorandum under
the caption "Certain Federal Income Tax Considerations", insofar as
they purport to describe the provisions of the laws referred to
therein, are, when taken together with the other information included
in the Offering Memorandum, accurate in all material respects;
No registration of the Securities under the
Act, and no qualification of an indenture under the 1939 Act with
respect thereto, is required for the offer, sale and initial resale of
the Senior Notes and the Shares by the Initial Purchasers in the manner
contemplated by this Agreement; no registration of the Highland Shares
or the Convertible Preferred Stock under the Act is required for the
offer and sale of the Highland Shares or the Convertible Preferred
Stock as described in the Offering Memorandum; and
The Company is not an "investment company"
or an entity "controlled by an investment company," as such terms are
defined in the Investment Company Act.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Initial Purchasers at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum,
and has not made any independent check or verification thereof, on the basis of
the foregoing (relying as to materiality to the extent such counsel deemed
appropriate upon facts provided by officers and other representatives of the
Company), no facts have come to the attention
20
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of such counsel that lead such counsel to believe that the Offering Memorandum,
as of its date or as of the Closing Date, contained or contains any untrue
statement of material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and other financial and statistical data included therein).
The opinion of such counsel may be limited to the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
federal laws of the United States.
The Initial Purchasers shall have received on the
Closing Date an opinion of Randall D. Fisher, Esq., General Counsel of the
Company, dated the Closing Date and addressed to the Initial Purchasers to the
effect that:
Except as set forth in the Offering
Memorandum, each of the Company and its Subsidiaries has all of the
licenses, permits, franchises and authorizations, if any, required by
the relevant governmental authorities of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut and/or its political subdivisions for the
provision of cable television service (as such counsel understands
service to be provided which may be based on a certificate of an
officer of the Company, provided that such counsel shall state that
they believe that both the Initial Purchasers and he are justified in
relying on such certificate), where the failure to obtain or hold such
license, permit, franchise or authorization would have a Material
Adverse Effect;
To the best of such counsel's knowledge
after due inquiry, each of the Company and its Subsidiaries has made
all filings, reports, applications and submissions required by the laws
and ordinances relating to cable services of each of New York,
Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire,
Vermont, Michigan and Connecticut, and the ordinances of the state's
political subdivisions relating thereto, and the rules and regulations
promulgated therewith;
Each of the Company and its Subsidiaries has
the consents, approvals, authorizations, licenses, certificates,
permits, or orders of any governmental authorities of the each of New
York, Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New
Hampshire, Vermont, Michigan and Connecticut, and its political
subdivisions, if any, required for the consummations of the
transactions contemplated in the Purchase Agreement where the failure
to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would have a Material Adverse Effect;
There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge, threatened by or
before any court or governmental body each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, against or affecting any of the Company or
its Subsidiaries, or the business of the Company and its Subsidiaries;
The statements in the Offering Memorandum
under the headings "Risk Factors - Regulation in the Telecommunications
Industry" and "Risk Factors - Competition," insofar as they relate to
the Company and its Subsidiaries operations each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and
21
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Connecticut, and purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects; and
Neither (a) the offering the Highland Shares
and of the Convertible Preferred Stock contemplated by the Offering
Memorandum nor (b) the execution and delivery of the Purchase Agreement
and the offering of the Senior Notes and the Shares contemplated
thereby will conflict with or result in a violation of any order or
regulation of each of New York, Virginia, Pennsylvania, Ohio, New
Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, or its political subdivisions applicable to the Company
and its Subsidiaries, the conflict with or the violation of which would
have a Material Adverse Effect.
The Initial Purchasers shall have received
on the Closing Date an opinion of Colin H. Higgin, Deputy General
Counsel to the Company, dated the Closing Date and addressed to the
Initial Purchasers, to the effect that:
None of the Company or its Subsidiaries is
in violation of its certificate of incorporation, by-laws, certificate
of limited partnership or partnership agreement, as applicable, or in
default in the performance or observance of any material obligation,
covenant or condition contained in any partnership agreement,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
Each of the Company and its Subsidiaries has
been duly qualified as a foreign corporation or partnership, as the
case may be, for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction,
except where the failure to so qualify would not have a Material
Adverse Effect (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that he believes that both the Initial
Purchasers and he are justified in relying upon such opinions and
certificates);
Each Subsidiary of the Company is owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (other than liens to secure
indebtedness under credit facilities disclosed in the Offering
Memorandum) (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
Subsidiaries, provided that such counsel shall state that he believes
that both the Initial Purchasers and he are justified in relying upon
such opinions and certificates);
To the best of such counsel's knowledge and
other than as set forth in the Offering Memorandum, there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any
of its Subsidiaries is the subject which, if determined adversely to
the Company or any of its Subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholder's equity, partners'
equity, or results of operations of the Company and its Subsidiaries;
and, to the best of such counsel's knowledge, no
22
<PAGE>
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
The issue and sale of the Notes, the
Preferred Stock and the Convertible Preferred Stock and the compliance
by the Company with all of the provisions of the Notes, the Preferred
Stock, the Convertible Preferred Stock and the documents executed in
connection with the sale thereof, the Indenture, the Certificate of
Designations, the Registration Rights Agreements, this Agreement and
the documents executed in connection with the sale of the Highland
Shares and the consummation of the transactions herein and therein
contemplated will not, to the best of my knowledge after due inquiry,
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under any material indenture,
mortgage, deed of trust, sale/leaseback transaction, loan agreement or
other similar financing agreement, or instrument or other agreement or
instrument (including, without limitation, any license or franchise
granted to the Company or a Subsidiary by a local franchising
governmental body) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Subsidiaries is subject, nor will such actions result in any violation
of the provisions of the certificate of incorporation, by-laws, the
certificate of limited partnership or the partnership agreements of the
Company and its Subsidiaries, as appropriate, or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any
of their properties, except as may be required by (x) the Hart-Scott
Rodino Act, (y) federal or state securities laws and regulations and
(z) the laws, orders, regulations or requirements regarding, or
governmental authorizations to own or operate, cable television systems
or competitive local exchange carrier networks and related facilities
under, federal, state or local law, and similar laws or regulations, in
each case in connection with the conversion of the Convertible
Preferred Stock into Class A Common Stock; and
No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities and
the Convertible Preferred Stock or the consummation by the Company of
the transactions contemplated by this Agreement, the Indenture, the
Certificate of Designations and the Registration Rights Agreements, or
the documents executed in connection with the sale of the Highland
Shares or the Convertible Preferred Stock, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and resale of the Senior Notes and the Shares by the Initial
Purchasers, and as may be required by (x) the Hart-Scott Rodino Act,
(y) federal or state securities laws and regulations and (z) the laws,
orders, regulations or requirements regarding, or governmental
authorizations to own or operate, cable television systems or
competitive local exchange carrier networks and related facilities
under, federal, state or local law, and similar laws or regulations, in
each case in connection with the conversion of the Convertible
Preferred Stock into Class A Common Stock.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Initial Purchasers at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum,
and has not made any independent check or verification thereof, on the basis of
the foregoing (relying as to materiality to the extent such counsel deemed
appropriate upon
23
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facts provided by officers and other representatives of the Company), no facts
have come to the attention of such counsel that lead such counsel to believe
that the Offering Memorandum, as of its date or as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and other financial and statistical data included
therein).
The Initial Purchasers shall have received on the
Closing Date an opinion of Fleischman & Walsh, P.C., special regulatory counsel
for the Company and its Subsidiaries, dated the Closing Date, and addressed to
the Initial Purchasers to the effect that:
The communities listed in Section A of
Attachment 1 to the opinion have been registered with the FCC in
connection with the operation of the Systems. The filing of a
registration statement constitutes initial FCC authorization for the
commencement of cable television operations in the community
registered.
The Subsidiaries hold certain FCC licenses,
as that term is defined below ("FCC Licenses"). All FCC Licenses and
receive-only earth station registrations held by the Subsidiaries in
connection with the operation of the Cable Systems are listed on
Attachment 1 to the Opinion. To the best of our knowledge, all such FCC
Licenses have been validly issued or assigned to the present licensee
and are currently in full force and effect. We have no knowledge of any
event which would allow, or after notice or lapse of time which would
allow, revocation or termination of any FCC License held by the
Subsidiaries or would result in any other material impairment of the
rights of the holder of such license. To the best of our knowledge, no
other FCC Licenses are required in connection with the operation of the
Cable Systems by the Subsidiaries in the manner we have advised they
are presently being operated. For the purposes of this opinion, an FCC
License is defined as an authorization, or renewal thereof, issued by
the FCC authorizing the transmission of radio energy through the
airways.
Other than proceedings affecting the cable
television industry generally, there is no action, suit or proceeding
pending before or, to the best of our knowledge, threatened by the FCC
which is reasonably likely to have a materially adverse impact upon the
cable television operations of the Company and its Subsidiaries taken
as a whole.
To the best of our knowledge after due
inquiry, the Company and the Subsidiaries have filed all current and
routine filings, reports, applications and submissions required under
the Communications Act, as amended, and under the rules and regulations
of the FCC.
The Subsidiaries hold all authorizations
and/or have filed all notifications required by the FCC in connection
with their operation on all frequencies in the 108-137 MHz and 225-400
MHz bands which we have been advised are currently being utilized on
the Cable Systems. The geographic and technical parameters with respect
to the authorized use of these frequencies are listed on Attachment 1
hereto.
The employment units covered by the Cable
Systems and operated by the Subsidiaries have been certified, where
required, by the FCC for compliance with equal employment opportunity
("EEO") requirements in each of calendar years 1992 through 1996 in
which such Cable Systems have been owned and operated by the Company or
the Subsidiaries.
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Employment certification records for the years prior to 1992 have been
purged from the FCC's database and are therefore outside the scope of
this opinion.
Statements of Account required by Section
111 of the Copyright Act of 1976, as amended have been filed, together
with royalty payments accompanying said Statements of Account, with the
U.S. Copyright Office for the Cable Systems covering each of the
accounting periods beginning with January 1 through June 30, 1994
accounting period and ending with the July 1 through December 31, 1996
accounting period during which such Cable Systems have been operated by
the Subsidiaries. We have not received the information or calculations
contained in these Statements, and express no opinion with respect to
the accuracy thereof. To the best of our knowledge, there are no
currently outstanding inquiries received from the U.S. Copyright Office
or any other party which question the copyright filings or payments
made by the Company or the Subsidiaries with respect to the Cable
Systems. It is possible that there may be matters pending before the
U.S. Copyright Office relating to the Cable Systems, the Company or the
Subsidiaries of which we do not have knowledge because such matters
have not yet been incorporated into the available public files of the
U.S. Copyright Office. However, we are not aware of the pending or
threatened claim, action or demand for copyright infringement or for
non-payment of royalties with respect to the Statements of Account or
related royalty payments filed by the Company and the Subsidiaries for
the Cable Systems.
The Company has obtained all consents,
approvals and authorizations of the FCC, if any, required for the
consummation of the transactions of the transactions contemplated in
the Purchase Agreement where the failure to obtain the consents,
approval, authorizations, licenses, certificates, permits or orders
would reasonably be expected to have a materially adverse impact on the
Company or the Subsidiaries.
Neither the execution and delivery of the
Purchase Agreement nor the offering of the Senior Notes and the Shares
contemplated thereby nor the offering of the Highland Shares and the
Convertible Preferred Stock as contemplated by the Offering Memorandum
will conflict with or result in a violation of any order or regulation
of the FCC applicable to the Company and the Subsidiaries, the conflict
with or the violation of which would reasonably be expected to have a
materially adverse impact on the Company or the Subsidiaries. However,
we call your attention to the following.
Under the Act as now in effect, the sale or
other disposition of certain pledged collateral and the exercise of
certain other rights and remedies conferred upon you by any agreement
or by applicable law might constitute an assignment of an FCC licensee,
or transfer of control of an FCC license, requiring for its
consummation the prior consent of the FCC granted upon an appropriate
application thereof.
Under the Act as now in effect, and as now
interpreted by the FCC, no valid security interest may be granted in an
FCC license. To the extent that the Purchase Agreement and/or related
financing documents purport to grant to you a security interest in any
FCC licenses, such security interest may not be legally enforceable.
In the course of our representation of the
Company and its Subsidiaries, no matters have come to our attention,
other than matters affecting the cable television industry generally,
which would reasonable be expected to have a materially adverse impact
upon the cable television operations of the Company and the
Subsidiaries taken as a whole.
25
<PAGE>
In our opinion, the Statements in the
Offering Memorandum under the headings "Risk Factors - Regulation in
the Telecommunications Industry" and "Risk Factors Competition,"
insofar as the purport to describe the provisions of the law referred
to therein, are accurate, complete and fair in all material respects.
The Initial Purchasers shall have received on the
Closing Date an opinion, of Latham & Watkins, counsel for the Initial
Purchasers, dated the Closing Date, and addressed to the Initial Purchasers,
with respect to such matters as the Initial Purchasers may reasonably request,
and such counsel shall have received such certificates, documents and
information as they may reasonably request to enable them to pass upon such
matters.
The Initial Purchasers shall have received letters
addressed to the Initial Purchasers, and dated the date hereof and the Closing
Date from Deloitte & Touche LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Initial Purchasers and
their counsel.
There shall not have been any decrease in
stockholders' equity of the Company nor any material increase in the short-term
or long-term debt of the Company (other than in the ordinary course of business)
from that set forth or specifically contemplated in the Offering Memorandum;
(ii) the Company and its Subsidiaries shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and its Subsidiaries, taken as a
whole, other than those reflected in the Offering Memorandum; and (iii) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and the
Initial Purchasers shall have received a certificate, dated the Closing Date and
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company (or such other officers as are acceptable to the Initial Purchaser), to
the effect set forth in this Section 7(j) and in Section 7(k) hereof.
The Company shall not have failed at or prior to the
Closing Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied with by
it hereunder at or prior to the Closing Date.
There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g) under the Act, that (i) it is downgrading its rating assigned to
any class of securities of the Company or any of its Subsidiaries, or (ii) it is
reviewing its ratings assigned to any class of securities of the Company or any
of its Subsidiaries with a view to possible downgrading, or with negative
implications, or direction not determined.
The Initial Securities shall have been approved for
trading in the PORTAL Market.
The Company shall have obtained, in writing, all
consents and waivers required under the terms of any of its material agreements
necessary to ensure that the transactions contemplated by this Agreement and the
other Operative Documents and the sale of the Highland Shares and the
Convertible Preferred Stock as contemplated by the Offering Memorandum will not
conflict with or constitute a breach of, or a default under any of such
agreements. The Company shall have furnished photocopies of such waivers and
consents, if any, to the Initial Purchasers.
The Certificate if Designations shall have been filed
with the appropriate authorities.
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The sale of the Highland Shares and the Convertible
Preferred Stock shall have been consummated prior to or simultaneously with the
consummation of the sale of the Senior Notes and the Shares hereunder.
The Company shall have furnished or caused to be
furnished to you the "lock-up" letter contemplated by Section 4(v) hereof.
The Company shall have furnished or caused to be
furnished to the Initial Purchasers such further certificates and documents as
the Initial Purchasers or their counsel shall have requested.
All such opinions, certificates, letters, consents, waivers
amendments and other documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and substance to the Initial
Purchasers and counsel for the Initial Purchasers. Any certificate or document
signed by any officer of the Company and delivered to the Initial Purchasers, or
to counsel for the Initial Purchasers, shall be deemed a representation and
warranty by the Company to the Initial Purchasers as to the statements made
therein.
Expenses. The Company agrees to pay the following
costs, expenses and fees and all other costs and expenses incident to the
performance by it of any of its obligations hereunder: (i) the preparation and
reproduction of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements thereto), and each
amendment or supplement to any of them, this Agreement, the Indenture and the
Exchange Indenture; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Offering Memorandum, the Preliminary Offering Memorandum, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Senior Notes and the Shares;
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Senior Notes and the Exchangeable Preferred Stock,
including any stamp taxes in connection with the original issuance and sale of
the Notes and the Preferred Stock; (iv) the printing (or reproduction) and
delivery of this Agreement, the preliminary and supplemental Blue Sky Memoranda
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Senior Notes and the Exchangeable Preferred
Stock; (v) the application for quotation of the Initial Securities on the PORTAL
Market; (vi) the qualification of the Senior Notes and the Shares for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 4(e) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (vii) the performance by the Company of its
obligations under the Registration Rights Agreements; (viii) fees and expenses
of the Trustee and its counsel; (ix) the transportation and other expenses, if
any, incurred by or on behalf of the Company representatives in connection with
presentations to prospective purchasers of the Senior Notes and the Shares; and
(x) the fees and expenses of the Company's accountants and the fees and expenses
of counsel (including local and special counsel, if any) for the Company. The
Company hereby agrees that they will pay in full on the Closing Date the fees
and expenses referred to in clause (vi) of this Section 8 by delivering to
counsel for the Initial Purchasers on such date a check payable to such counsel
in the requisite amount.
Effective Date of Agreement. This Agreement shall
become effective upon the execution and delivery hereof by all the parties
hereto.
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Termination of Agreement. This Agreement shall be
subject to termination in the absolute discretion of the Initial Purchasers,
without liability on the part of the Initial Purchasers to the Company, by
notice to the Company, if prior to the Closing Date, (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared, or (iii) there shall have occurred any outbreak or escalation of
hostilities involving the United States or other domestic, foreign or
international calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Initial Purchasers, impracticable or
inadvisable to commence or continue the offering of the Securities on the terms
set forth on the cover page of the Offering Memorandum or to enforce contracts
for the resale of the Senior Notes and Shares by the Initial Purchasers. Notice
of such termination may be given to the Company by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Senior Notes and the Shares
which it or they have agreed to purchase hereunder on such date and the amount
of Senior Notes or Shares which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the total amount of securities of such series to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the aggregate
principal amount or number of shares of such securities set forth opposite its
name in Schedule I bears to the total amount of such securities which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the securities which
such defaulting Initial Purchaser or Initial Purchasers, as the case may be,
agreed but failed or refused to purchase on such date; provided that in no event
shall the aggregate principal amount or number of shares of such securities
which any Initial Purchaser has agreed to purchase pursuant to Section 2 hereof
be increased pursuant to this Section 10 by an amount in excess of one-ninth of
such aggregate amount of such securities without the written consent of such
Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase such Senior Notes or Shares and the
aggregate amount of securities with respect to which such default occurs is more
than one-tenth of the total amount of securities of such series to be purchased
by all Initial Purchasers and arrangements satisfactory to you and the Company
for the purchase of such securities are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company. In any such case which does
not result in termination of this Agreement, either the Initial Purchasers or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Offering Memorandum or any other documents or arrangements amy be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.
Information Furnished by the Initial Purchasers.
The statements set forth in the last paragraph of the front cover page of the
Preliminary Offering Memorandum and the Offering Memorandum and the second to
last paragraph on page 2 of the Preliminary Offering Memorandum and the Offering
Memorandum, constitute the only Initial Purchasers Information furnished by or
on behalf of the Initial Purchasers as such information is referred to in
Sections 5(a) and 6 hereof.
Miscellaneous. Except as otherwise provided in
Sections 4, 9 and 10 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (i) if to the Company, at
the office of the Company at Main at Water Street, Coudersport, PA 16915,
Attention: Chief Financial Officer with a copy to Buchanan Ingersoll
Professional Corporation, 1 Oxford Center, 301 Grant
28
<PAGE>
Street, 20th Floor, Pittsburgh, PA 15219, Attention: Carl E. Rothenberger, Jr.,
or (ii) if to the Initial Purchasers, addressed to Smith Barney Inc., 388
Greenwich Street, New York, NY 10013, Attention: Manager, Investment Banking
Division, with a copy to Latham & Watkins, 885 Third Avenue, New York, NY 10022,
Attention: Beth R. Neckman.
This Agreement has been and is made solely for the benefit of
the Initial Purchasers, the Company and their respective directors, officers and
the controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Initial Purchasers of any of the Senior Notes
or the Shares in his status as such purchaser.
Applicable Law; Counterparts This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York and without regard to the
conflicts of law principles thereof.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[signature page follows]
29
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchasers.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James P. Rigas
Name: James P. Rigas
Title:Executive Vice President
Confirmed as of the date first above mentioned.
SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
NATIONSBANC CAPITAL MARKETS, INC.
TD SECURITIES (USA) INC.
By SMITH BARNEY INC.
By: /s/ M.E. Anderson
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Number of Shares
Principal Amount of Exchangeable
of Senior Notes Preferred Stock
Initial Purchasers to be Purchased to be Purchased
<S> <C> <C>
Smith Barney Inc. ................................... $105,000,000 665,000
Bear, Stearns & Co. Inc. ............................ 22,500,000 142,500
NationsBanc Capital Markets, Inc. ................... 11,250,000 71,250
TD Securities (USA) Inc.............................. $11,250,000 71,250
----------- ------
Total....................................... $150,000,000 950,000
</TABLE>
31
<PAGE>
Exhibit A
Form of Notes Registration Rights Agreement
32
<PAGE>
Exhibit B
Form of Exchangeable Preferred Stock Registration Rights Agreement
33
<PAGE>
EXCHANGEABLE PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT
Dated as of July 7, 1997
by and among
Adelphia Communications Corporation
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
and
Highland Holdings
<PAGE>
This Exchangeable Preferred Stock Registration Rights Agreement (this
"Agreement") is made and entered into as of July 7, 1997 by and among Adelphia
Communications Corporation (the "Company") and Smith Barney Inc., Bear, Stearns
& Co. Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc.
(collectively, the "Initial Purchasers"), who have agreed to purchase an
aggregate of 950,000 shares of 13% Series A Cumulative Exchangeable Preferred
Stock, par value $.01 per share (Liquidation Preference $100.00 per share) of
the Company (the "Exchangeable Preferred Stock") pursuant to the Purchase
Agreement (as defined below) and Highland Holdings who has agreed to purchase
550,000 shares of the Exchangeable Preferred Stock pursuant to a separate
agreement with the Company. Unless the context otherwise requires, the term
"Exchangeable Preferred Stock" refers collectively to the 950,000 shares to be
purchased by the Initial Purchasers and the 550,000 shares to be purchased by
Highland Holdings.
This Agreement is made pursuant to the Purchase Agreement, dated July
1, 1997 (the "Purchase Agreement"), between the Company and the Initial
Purchasers and the separate purchase agreement, dated
, 1997 between the Company and Highland Holdings (the "Highland
Holdings Purchase Agreement"). In order to induce the Initial Purchasers and
Highland Holdings to purchase the Exchangeable Preferred Stock, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 2 of the Purchase Agreement and the
obligations of Highland Holdings set forth in the Highland Holdings Purchase
Agreement.
The parties hereby agree as follows:
SECTION DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Amount: With respect to any Share, the Liquidation Preference of
such Share, and with respect to any Debenture, the principal amount of such
Debenture.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Certificate of Designations: The Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof in
respect of the Exchangeable Preferred Stock.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Transfer Agent and/or the Registrar, as applicable, under the Certificate
1
<PAGE>
of Designations and/or the Exchange Indenture, as applicable, of Exchange
Securities with (a) in the case of Exchange Shares, the same aggregate
Liquidation Preference as the aggregate Liquidation Preference of the
Exchangeable Preferred Stock that was tendered by Holders thereof pursuant to
the Exchange Offer and (b) in the case of New Exchange Debentures, the same
aggregate principal amount as the aggregate principal amount of Exchange
Debentures that were tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Exchangeable Preferred
Stock, each Dividend Payment Date and with respect to the Exchange Debentures,
each Interest Payment Date.
Debentures: The Exchange Debentures and the New Exchange Debentures.
Dividend Payment Date: As defined in the Certificate of Designations.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Debentures: The 13% Senior Subordinated Exchange Debentures
due 2009 of the Company for which the Exchangeable Preferred Stock may be
exchanged.
Exchange Indenture: The Exchange Indenture, to be dated as of the
date of the first issuance of Exchange Debentures thereunder, between the
Company and Bank of Montreal Trust Company, as trustee (the "Trustee"), pursuant
to which the Exchange Debentures are to be issued, as such Exchange Indenture is
amended or supplemented from time to time in accordance with the terms thereof.
Exchange Offer: The registration by the Company under the Act of the
Exchange Securities pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Exchange Securities (a) in the case of Exchangeable
Preferred Stock, with an aggregate Liquidation Preference equal to the aggregate
Liquidation Preference of the Transfer Restricted Securities tendered in such
exchange offer by such Holders and (b) in the case of Exchange Debentures, in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exchange Securities: The Exchange Shares and the New Exchange
Debentures.
Exchange Shares: The shares of 13% Series B Cumulative Exchangeable
Preferred Stock, par value $.01 per share (Liquidation Preference $100.00 per
share) of the Company to be issued pursuant to the Certificate of Designations
in the Exchange Offer.
Exchangeable Preferred Stock: As defined in the preamble hereto.
2
<PAGE>
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Exchangeable Preferred Stock purchased by the Initial
Purchasers to certain "qualified institutional buyers," as such term is defined
in Rule 144A under the Act.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Exchange Indenture.
Liquidated Damages: As defined in Section 5 hereof.
Liquidation Preference: $100.00 per share of Exchangeable Preferred
Stock or Exchange Shares.
NASD: National Association of Securities Dealers, Inc.
New Exchange Debentures: The 13% Senior Subordinated Exchange
Debentures due 2009, to be issued pursuant to the Exchange Indenture in the
Exchange Offer.
Payment Date: The Dividend Payment Date and/or the Interest Payment
Date, whichever is applicable.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Shares or Debentures, each Person who is a Holder of Shares or Debentures on the
record date with respect to the Payment Date on which such Damages Payment Date
shall occur.
Registrar: Means the Registrar of the Debentures as defined in the
Exchange Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Securities: The Exchangeable Preferred Stock and the Exchange
Debentures.
3
<PAGE>
Shares: The Exchange Shares and the Exchangeable Preferred Stock.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Agent: Means the Transfer Agent with respect to the Shares
as defined in the Certificate of Designations.
Transfer Restricted Securities: Each Security, until the earliest to
occur of (a) the date on which such Security is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Security has been effectively registered under the Act and disposed of in
accordance with a Shelf Registration Statement and (c) the date on which such
Security is distributed to the public pursuant to Rule 144 under the Act or by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION REGISTERED EXCHANGE OFFER
Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company shall (i) use its reasonable
efforts to cause to be filed with the Commission as soon as practicable after
the Closing Date, but in no event later than 90 days after the Closing Date, a
Registration Statement under the Act relating to the Exchange Securities and the
Exchange Offer, (ii) use its best efforts to cause such Registration Statement
to become effective no later than 180 days after the Closing Date, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings in connection with the registration and qualification of
the Exchange Securities to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer Registration Statement shall be on the appropriate form
permitting registration
4
<PAGE>
of the Exchange Securities to be offered in exchange for the Transfer Restricted
Securities and to permit resales of Exchange Securities held by Broker-Dealers
as contemplated by Section 3(c) below.
The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company shall cause the Exchange Offer to comply with all applicable federal and
state securities laws. No securities other than the Exchange Securities and the
Notes (as defined in the Purchase Agreement) shall be included in the Exchange
Offer Registration Statement. The Company shall use its best efforts to cause
the Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Securities that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and may be required,
therefore, to deliver a prospectus meeting the requirements of the Act in
connection with any sales of the Exchange Securities received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Securities held by any such
Broker-Dealer except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Exchange Securities acquired by
Broker- Dealers for their own accounts as a result of market-making activities
or other trading activities, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer Registration
Statement is declared effective.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request, at any time
during such one year period in order to facilitate such sales.
SECTION SHELF REGISTRATION
Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement or permitted to Consummate the Exchange
Offer, in either case, because the Exchange Offer is not permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that
5
<PAGE>
such Holder may not resell the Exchange Securities acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (iii) if any Holder
of Transfer Restricted Securities is a Broker-Dealer and holds Securities
acquired directly from the Company or an affiliate of the Company and shall so
notify the Company, then the Company shall
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day after
the date on which the Company is notified by the Commission or otherwise
determines that it is not required to file the Exchange Offer Registration
Statement or permitted to Consummate the Exchange Offer, (2) the 30th day
after the date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clauses (ii) or (iii)
above, and (3) the 60th day after the Closing Date (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration Statement
shall provide for resales of all Transfer Restricted Securities the
Holders of which shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 90th
day after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for resales of Securities by the Holders of Transfer
Restricted Securities entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, until the second anniversary of the Closing Date or such shorter period
that will terminate when all the Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or become
eligible for resale pursuant to Rule 144 without volume or other restrictions.
Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
SECTION LIQUIDATED DAMAGES
If (i) the Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this
6
<PAGE>
Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has not
been Consummated within 30 business days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company hereby agrees to pay
liquidated damages ("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 Amount of Transfer Restricted Securities held by such Holder for the
period that the Registration Default continues. The amount of the Liquidated
Damages shall increase by an additional 0.25% per annum for 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 Amount of Transfer
Restricted Securities. All accrued Liquidated Damages shall be paid to Record
Holders by the Company by wire transfer of immediately available funds or by
federal funds check on each Damages Payment Date, as provided in the Exchange
Indenture or the Certificate of Designations, as applicable. Following the cure
of all Registration Defaults relating to any particular Transfer Restricted
Securities, the accrual of Liquidated Damages with respect to such Transfer
Restricted Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Security shall have
been satisfied in full.
SECTION REGISTRATION PROCEDURES
Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below, shall use its best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company hereby agrees to seek a no-action letter or other
favorable decision from the Commission allowing the Company to Consummate
an Exchange Offer for such Securities. The Company hereby agrees to pursue
the issuance of such a decision to the Commission staff level but shall
not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution
7
<PAGE>
of the Exchange Securities to be issued in the Exchange Offer and (C) it
is acquiring the Exchange Securities in its ordinary course of business.
In addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any
such Holder using the Exchange Offer to participate in a distribution of
the securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters (including any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K if the
resales are of Exchange Securities obtained by such Holder in exchange for
Securities acquired by such Holder directly from the Company.
Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall, provide a supplemental letter to the
Commission stating (A) that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a representation
that the Company has not entered into any arrangement or understanding
with any Person to distribute the Exchange Securities to be received in
the Exchange Offer and that, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Exchange Securities in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Securities received in the Exchange Offer.
Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof, and pursuant
thereto the Company will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Securities by Broker-Dealers), the Company shall:
use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case
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of either clause (A) or (B), use its best efforts to cause such amendment
to be declared effective and such Registration Statement and the related
Prospectus to become usable for its intended purpose(s) as soon as
practicable thereafter;
prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a period of at
least five business days, and the Company will not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission;
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promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available for
discussion of such document and other customary due diligence matters, and
include such information in such document prior to the filing thereof as
such selling Holders or underwriter(s), if any, reasonably may request;
make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holders, underwriter,
attorney or accountant in connection with such Registration Statement or
any post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the Amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate Amount of
Exchangeable Preferred Stock or Exchange Debentures covered thereby or the
underwriter(s), if any;
furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement,
as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consents to the use of
the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection with
the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this Agreement, all to such
extent as may be requested by the Initial Purchasers or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale
or resale pursuant to any Registration Statement contemplated by this
Agreement; and whether
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or not an underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company shall:
(A) furnish to the Initial Purchasers, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, (i) upon the date of the Consummation
of the Exchange Offer, (ii) if applicable, the effectiveness of the
Shelf Registration Statement and (iii) upon the filing of any
amendment or supplement to any Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial or
accounting officer of the Company confirming, as of the date
thereof, the matters set forth in paragraphs (j) and (k) of
Section 7 of the Purchase Agreement and such other matters as
such parties may reasonably request;
(2) an opinion, dated the date of Consummation of the
Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for the Company,
covering the matters set forth in paragraphs (d), (e), (f) and
(g) of Section 7 of the Purchase Agreement and such other
matters as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company's representatives of the
independent public accountants for the Company and the Initial
Purchasers' representatives and the Initial Purchasers' counsel
in connection with the preparation of such Registration
Statement and the related Prospectus and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to a certain extent
upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, and, in the
case of the Exchange Offer Registration Statement, as of the
date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted 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.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) customary comfort letters, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from
the Company's independent accountant, Deloitte & Touche LLP, in
the customary
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form and covering matters of the type customarily covered in
comfort letters by underwriters in connection with primary
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 7(i) of the
Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Initial Purchasers and the underwriters(s), if
any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing;
prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and its respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by any Registration Statement;
provided, however, that the Company shall not be required to register or
qualify to transact business where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
shall issue, upon the request of any Holder of Securities
covered by the Shelf Registration Statement, Exchange Securities having an
aggregate Amount equal to the aggregate Amount of Securities surrendered
to the Company by such Holder in exchange therefor or being sold by such
Holder; such Exchange Securities to be registered in the name of such
Holder or in the name of the purchaser(s) of such Securities, as the case
may be; in return, the Securities held by such Holder shall be surrendered
to the Company for cancellation;
cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii) above;
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<PAGE>
if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein not misleading;
provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Exchange Indenture and the Transfer Agent
with printed certificates for the applicable Transfer Restricted
Securities which are in a form eligible for deposit with The Depository
Trust Company;
cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters
in a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
in the event of any registration of the Exchange Debentures or
the issuance of New Exchange Debentures in exchange for Exchange
Debentures, cause the Exchange Indenture to be qualified under the TIA on
or prior to the later of (A) the effective date of the first Registration
Statement required by this Agreement or (B) the date of the first exchange
of Exchange Debentures for Exchangeable Preferred Stock, and, in
connection therewith, cooperate with the Trustee and the Holders of
Debentures to effect such changes to the Exchange Indenture as may be
required for such Exchange Indenture to be so qualified in accordance with
the terms of the TIA; and execute and use its best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Exchange Indenture to be so qualified in a
timely manner;
cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company is then listed if requested by
the Holders of a majority in aggregate Amount of Exchangeable Preferred
Stock or Exchange Debentures or the managing underwriter(s), if any; and
provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.
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Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION REGISTRATION EXPENSES
All expenses associated with and incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made by the Initial Purchasers or any Holder with the NASD and
reasonable counsel fees and disbursements in connection therewith (and, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD));
(ii) all reasonable fees and disbursements of compliance with federal securities
and state Blue Sky or securities laws (including all fees and expenses of
counsel to the underwriter(s) in connection with compliance with state Blue Sky
or securities laws); (iii) all expenses of printing (including printing
certificates for the Exchange Securities to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees, if any, in connection with listing the Securities and the
Exchange Securities on a national securities exchange or automated quotation
system pursuant to the requirements hereof; (vi) all fees and expenses of the
Trustee under the Exchange Indenture to the extent provided in the Exchange
Indenture and of any escrow agent, custodian or exchange agent; and (vii) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company shall reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham
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& Watkins or such other counsel as may be chosen by the Holders of a majority in
Amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION INDEMNIFICATION
(a) Indemnification by the Company. Upon any registration of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, pursuant to Sections 3 and 4 hereof, and in consideration of the
agreements of the Initial Purchasers and Highland Holdings contained herein, and
as an inducement to the Initial Purchasers and Highland Holdings to purchase the
Securities, the Company shall and hereby agrees to, (i) indemnify and hold
harmless each Holder of Transfer Restricted Securities and Broker-Dealer
Transfer Restricted Securities, as applicable, to be included in such
registration and each person who participates as a placement or sales agent or
as an underwriter in any offering or sale of such Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities, as applicable, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
agent or underwriter may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement under which such
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities,
as applicable, were registered under the Act, or any preliminary, final or
summary Prospectus contained therein or furnished by the Company to any such
Holder, agent or underwriter, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) reimburse such Holder, such agent and such
underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
under (i) above to any such person in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, or preliminary, final or summary Prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, in
any Registration Statement filed pursuant to Sections 3 and 4 hereof and to
entering into any underwriting agreement, if any, with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to them from
the Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter named in any
such underwriting agreement, if any, severally and not jointly, to (i) indemnify
and hold harmless the Company, and, in the case of a Shelf Registration
Statement, all other Holders of Transfer Restricted Securities, against any
losses, claims, damages or liabilities to which the Company, or such other
Holders of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary Prospectus contained therein or furnished by the
Company to any such Holder, agent or underwriter, if any, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with
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written information furnished to the Company by such Holder or underwriter
expressly for use therein, and (ii) reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that no such Holder shall be required to undertake liability to any
person under this Section 8(b) for any amounts in excess of the dollar amount of
the proceeds to be received by such Holder from the sale of such Holder's
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities,
as applicable, pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the indemnified party shall have been advised by
counsel that representation of the indemnified party by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. The indemnifying party
shall not be required to indemnify any indemnified party for any amount paid or
payable by such indemnified party in the settlement of any action, proceeding or
investigation without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such
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indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. It is understood that contribution under this
subsection (d) is unavailable to indemnified parties to the same extent that
indemnification is unavailable under the proviso at the end of subsection (a)
above. The relative fault of such indemnifying party and indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders or any agents or underwriters or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) or
Broker-Dealer Transfer Restricted Securities, as applicable, exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
and any underwriters' obligations in this Section 8(d) to contribute shall be
several in proportion to the Amount of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities, as applicable, registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder, agent and underwriter and each person, if any, who controls any
Holder, agent or underwriter within the meaning of the Act; and the obligations
of the Holders and any underwriters contemplated by this Section 8 shall be in
addition to any liability which the respective Holder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Act.
SECTION RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities
17
<PAGE>
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.
SECTION PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lockup letters and other documents required under the
terms of such underwriting arrangements.
SECTION SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the holders of a majority in
aggregate Amount of the Transfer Restricted Securities included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Company.
SECTION MISCELLANEOUS
Remedies. The Company agrees that monetary damages (including
the liquidated damages contemplated hereby) would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any agreement in
effect on the date hereof.
Adjustments Affecting the Securities. The Company shall not take
any action, or permit any change to occur, with respect to the Securities that
would materially and adversely affect the ability of the Holders to Consummate
the Exchange Offer.
Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding Amount of
Exchangeable Preferred Stock or Exchange Debentures, as applicable.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being tendered pursuant to such Exchange
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<PAGE>
Offer may be given by the Holders of a majority of the outstanding Amount of
Transfer Restricted Securities being tendered or registered.
Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Transfer Agent or the Registrar under the Exchange Indenture (as
applicable), with a copy to the Transfer Agent or the Registrar under the
Exchange Indenture (as applicable); and
(ii) if to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
Telecopier No.: (814) 274-7098
Attention: Tim Rigas
With a copy to:
Buchanan Ingersoll
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, PA 15219
Telecopier No.: (412) 562-1041
Attention: Carl Rothenberger
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Exchange Indenture and to the Transfer Agent at the
address specified in the Certificate of Designations.
Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities from such Holder.
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<PAGE>
Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Entire Agreement. This Agreement together with the Securities,
the Exchange Securities, the Exchange Indenture, the Certificate of Designations
and the Purchase Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[signature page follows]
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Adelphia Communications Corporation
By:/s/ Timothy J. Rigas
Name: Timothy J. Rigas
Title: Executive Vice President
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
By: Smith Barney Inc.
By: /s/ M. E. Anderson
Name:
Title:
Highland Holdings
By: /s/ Michael J. Rigas
Name: Michael J. Rigas
Title: Partner
<PAGE>
NOTE REGISTRATION RIGHTS AGREEMENT
Dated as of July 7, 1997
by and among
Adelphia Communications Corporation
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
and
TD Securities (USA) Inc.
<PAGE>
This Note Registration Rights Agreement (this "Agreement") is made
and entered into as of July 7, 1997 between Adelphia Communications Corporation
(the "Company") and Smith Barney Inc., Bear, Stearns & Co. Inc., NationsBanc
Capital Markets, Inc. and TD Securities (USA) Inc. (the "Initial Purchasers"),
who have agreed to purchase the 10 1/2% Senior Notes due 2004 of the Company
(the "Senior Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated July
1, 1997 (the "Purchase Agreement"), between the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the Senior
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 2 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Senior Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Senior Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The 10 1/2% Senior Notes due 2004 of the Company to
be issued pursuant to the Indenture in the Exchange Offer.
Exchange Offer: The registration by the Company under the Act of the
Exchange Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
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<PAGE>
by such Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Senior Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of July 7, 1997, between the
Company and Bank of Montreal Trust Company, as trustee (the "Trustee"), pursuant
to which the Senior Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Senior Notes and the Exchange Notes.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registrar: Means the Registrar of the Notes as defined in the
Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Senior Notes: As defined in the preamble hereto.
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<PAGE>
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Senior Note, until the earliest
to occur of (a) the date on which such Senior Note is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Senior Note has been effectively registered under the Act and
disposed of in accordance with a Shelf Registration Statement and (c) the date
on which such Senior Note is distributed to the public pursuant to Rule 144
under the Act or by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION REGISTERED EXCHANGE OFFER
Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company shall (i) use its reasonable
efforts to cause to be filed with the Commission as soon as practicable after
the Closing Date, but in no event later than 90 days after the Closing Date, a
Registration Statement under the Act relating to the Exchange Notes and the
Exchange Offer, (ii) use its best efforts to cause such Registration Statement
to become effective no later than 180 days after the Closing Date, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings in connection with the registration and qualification of
the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer Registration Statement shall be on the appropriate form
permitting registration of the Exchange Notes to be offered in exchange for the
Transfer Restricted Securities and to permit resales of Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period
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<PAGE>
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 business days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes, the Preferred Shares and the Exchange Debentures (as such terms are
defined in the Purchase Agreement) shall be included in the Exchange Offer
Registration Statement. The Company shall use its best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Senior Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Senior Notes pursuant to the Exchange Offer; however, such Broker- Dealer may be
deemed to be an "underwriter" within the meaning of the Act and may be required,
therefore, to deliver a prospectus meeting the requirements of the Act in
connection with any sales of the Exchange Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker- Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of one year from
the date on which the Exchange Offer Registration Statement is declared
effective.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request, at any time
during such one year period in order to facilitate such sales.
SECTION SHELF REGISTRATION
Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement or permitted to Consummate the Exchange
Offer, in either case, because the Exchange Offer is not permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (iii) if any Holder of Transfer Restricted
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<PAGE>
Securities is a Broker-Dealer and holds Senior Notes acquired directly from the
Company or an affiliate of the Company and shall so notify the Company, then the
Company shall
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day after
the date on which the Company is notified by the Commission or otherwise
determines that it is not required to file the Exchange Offer Registration
Statement or permitted to Consummate the Exchange Offer, (2) the 30th day
after the date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clauses (ii) or (iii)
above, and (3) the 60th day after the Closing Date (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration Statement
shall provide for resales of all Transfer Restricted Securities the
Holders of which shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 90th
day after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for resales of Notes by the Holders of Transfer Restricted
Securities entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the second anniversary of the Closing Date or such shorter period that will
terminate when all the Notes covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement or become eligible for
resale pursuant to Rule 144 without volume or other restrictions.
Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
SECTION LIQUIDATED DAMAGES
If (i) the Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has
not been Consummated within 30 business days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but
5
<PAGE>
shall thereafter cease to be effective or fail to be usable for its intended
purpose without being succeeded immediately by a post-effective amendment to
such Registration Statement that cures such failure and that is itself
immediately declared effective (each such event referred to in clauses (i)
through (iv), a "Registration Default"), the Company hereby agrees to 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 Transfer Restricted Securities held by such Holder for the period that
the Registration Default continues. The amount of the liquidated damages shall
increase by an additional 0.25% per annum for 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 Transfer
Restricted Securities. All accrued liquidated damages shall be paid to Record
Holders by the Company by wire transfer of immediately available funds or by
federal funds check on each Damages Payment Date, as provided in the Indenture.
Following the cure of all Registration Defaults relating to any particular
Transfer Restricted Securities, the accrual of liquidated damages with respect
to such Transfer Restricted Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Security shall have
been satisfied in full.
SECTION REGISTRATION PROCEDURES
Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below, shall use its best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company hereby agrees to seek a no-action letter or other
favorable decision from the Commission allowing the Company to Consummate
an Exchange Offer for such Senior Notes. The Company hereby agrees to
pursue the issuance of such a decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby
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<PAGE>
acknowledges and agrees that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities to
be acquired in the Exchange Offer (1) could not under Commission policy as
in effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June 5,
1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including any no-action letter
obtained pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Act in connection
with a secondary resale transaction and that such a secondary resale
transaction should be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K if the resales are of Exchange Notes
obtained by such Holder in exchange for Senior Notes acquired by such
Holder directly from the Company.
Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall, provide a supplemental letter to the
Commission stating (A) that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a representation
that the Company has not entered into any arrangement or understanding
with any Person to distribute the Exchange Notes to be received in the
Exchange Offer and that, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Exchange Notes in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of the
Exchange Notes received in the Exchange Offer.
Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof, and pursuant
thereto the Company will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers), the Company shall:
use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), use its best efforts to cause such amendment to be declared effective
and such Registration Statement and the related Prospectus to become
usable for its intended purpose(s) as soon as practicable thereafter;
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<PAGE>
prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a period of at
least five business days, and the Company will not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission;
promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available for
discussion of such
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document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling
Holders or underwriter(s), if any, reasonably may request;
make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holders, underwriter,
attorney or accountant in connection with such Registration Statement or
any post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate principal amount
of Notes covered thereby or the underwriter(s), if any;
furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement,
as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consents to the use of
the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection with
the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this Agreement, all to such
extent as may be requested by the Initial Purchasers or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale
or resale pursuant to any Registration Statement contemplated by this
Agreement; and whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration, the
Company shall:
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(A) furnish to the Initial Purchasers, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, (i) upon the date of the Consummation
of the Exchange Offer, (ii) if applicable, the effectiveness of the
Shelf Registration Statement and (iii) upon the filing of any
amendment or supplement to any Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial or
accounting officer of the Company confirming, as of the date
thereof, the matters set forth in paragraphs (i) and (j) of
Section 7 of the Purchase Agreement and such other matters as
such parties may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company, covering the matters set forth in paragraphs (d), (e),
(f) and (g) of Section 7 of the Purchase Agreement and such
other matters as such parties may reasonably request, and in any
event including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company's representatives of the
independent public accountants for the Company and the Initial
Purchasers' representatives and the Initial Purchasers' counsel
in connection with the preparation of such Registration
Statement and the related Prospectus and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to a certain extent
upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, and, in the
case of the Exchange Offer Registration Statement, as of the
date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted 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.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) customary comfort letters, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from
the Company's independent accountant, Deloitte & Touche LLP, in
the customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the matters
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set forth in the comfort letters delivered pursuant to Section
7(i) of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Initial Purchasers and the underwriters(s), if
any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing;
prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and its respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by any Registration Statement;
provided, however, that the Company shall not be required to register or
qualify to transact business where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
shall issue, upon the request of any Holder of Senior Notes
covered by the Shelf Registration Statement, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Senior Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Senior Notes held by
such Holder shall be surrendered to the Company for cancellation;
cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii) above;
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if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein not misleading;
provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustees under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with The Depository Trust Company;
cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters
in a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use its best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company is then listed if requested by
the Holders of a majority in aggregate principal amount of Senior Notes or
the managing underwriter(s), if any; and
provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended
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Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus. If so directed by the Company,
each Holder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Transfer Restricted Securities that was current at the
time of receipt of such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including
the date when each selling Holder covered by such Registration Statement shall
have received the copies of the supplemented or amended Prospectus contemplated
by Section 6(c)(xvi) hereof or shall have received the Advice.
SECTION REGISTRATION EXPENSES
All expenses associated with and incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made by the Initial Purchasers or any Holder with the NASD and
reasonable counsel fees and disbursements in connection therewith (and, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD));
(ii) all reasonable fees and disbursements of compliance with federal securities
and state Blue Sky or securities laws (including all fees and expenses of
counsel to the underwriter(s) in connection with compliance with state Blue Sky
or securities laws); (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees, if any, in connection with listing the Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; (vi) all fees and expenses of the Trustee under the Indenture to the
extent provided in the Indenture and of any escrow agent, custodian or exchange
agent; and (vii) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company shall reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
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SECTION INDEMNIFICATION
(a) Indemnification by the Company. Upon any registration of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, pursuant to Sections 3 and 4 hereof, and in consideration of the
agreements of the Initial Purchasers contained herein, and as an inducement to
the Initial Purchasers to purchase the Notes, the Company shall and hereby
agrees to, (i) indemnify and hold harmless each Holder of Transfer Restricted
Securities and Broker-Dealer Transfer Restricted Securities, as applicable, to
be included in such registration and each person who participates as a placement
or sales agent or as an underwriter in any offering or sale of such Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, against any losses, claims, damages or liabilities, joint or
several, to which such Holder, agent or underwriter may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement under which such Transfer Restricted Securities or Broker-Dealer
Transfer Restricted Securities, as applicable, were registered under the Act, or
any preliminary, final or summary Prospectus contained therein or furnished by
the Company to any such Holder, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) reimburse such
Holder, such agent and such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable under (i) above to any such person in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, or preliminary, final or
summary Prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such person
expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, in
any Registration Statement filed pursuant to Sections 3 and 4 hereof and to
entering into any underwriting agreement, if any, with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to them from
the Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter named in any
such underwriting agreement, if any, severally and not jointly, to (i) indemnify
and hold harmless the Company, and, in the case of a Shelf Registration
Statement, all other Holders of Transfer Restricted Securities, against any
losses, claims, damages or liabilities to which the Company, or such other
Holders of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary Prospectus contained therein or furnished by the
Company to any such Holder, agent or underwriter, if any, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter expressly for use therein, and (ii) reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred;
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provided, however, that no such Holder shall be required to undertake liability
to any person under this Section 8(b) for any amounts in excess of the dollar
amount of the proceeds to be received by such Holder from the sale of such
Holder's Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the indemnified party shall have been advised by
counsel that representation of the indemnified party by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. The indemnifying party
shall not be required to indemnify any indemnified party for any amount paid or
payable by such indemnified party in the settlement of any action, proceeding or
investigation without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims,
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damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. It is understood that contribution under this
subsection (d) is unavailable to indemnified parties to the same extent that
indemnification is unavailable under the proviso at the end of subsection (a)
above. The relative fault of such indemnifying party and indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders or any agents or underwriters or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) or
Broker-Dealer Transfer Restricted Securities, as applicable, exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
and any underwriters' obligations in this Section 8(d) to contribute shall be
several in proportion to the principal amount of Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities, as applicable, registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder, agent and underwriter and each person, if any, who controls any
Holder, agent or underwriter within the meaning of the Act; and the obligations
of the Holders and any underwriters contemplated by this Section 8 shall be in
addition to any liability which the respective Holder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Act.
SECTION RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
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SECTION PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lockup letters and other documents required under the
terms of such underwriting arrangements.
SECTION SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION MISCELLANEOUS
Remedies. The Company agrees that monetary damages (including
the liquidated damages contemplated hereby) would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any agreement in
effect on the date hereof.
Adjustments Affecting the Notes. The Company shall not take any
action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate the
Exchange Offer.
Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
17
<PAGE>
Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Adelphia Communications Corporation
Main at Water Street
Coudersport, PA 16915
Telecopier No.: (814) 274-7098
Attention: Tim Rigas
With a copy to:
Buchanan Ingersoll
1 Oxford Center
301 Grant Street, 20th Floor
Pittsburgh, PA 15219
Telecopier No.: (412) 562-1041
Attention: Carl Rothenberger
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities from such Holder.
Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
18
<PAGE>
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Entire Agreement. This Agreement together with the Notes, the
Indenture and the Purchase Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
[signature page follows]
19
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Adelphia Communications Corporation
By: /s/ James Brown
Name: James Brown
Title: VP
Smith Barney Inc.
Bear, Stearns & Co. Inc.
NationsBanc Capital Markets, Inc.
TD Securities (USA) Inc.
By: Smith Barney Inc.
By: /s/ M. E. Anderson
Name:
Title:
<PAGE>
ADELPHIA COMMUNICATIONS CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, made as of the 7th day of July, 1997, by and among
TELESAT COMMUNICATIONS, INC. ("Telesat"), HIGHLAND HOLDINGS (the "Rigas Family")
and ADELPHIA COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company").
WHEREAS, Telesat is the record and beneficial holder of 20,000 shares
of the Company's Series C Convertible Preferred Stock, par value $.01 per share
(the "Series C Preferred Stock"); and
WHEREAS, the Rigas Family is the record and beneficial holder of
80,000 shares of the Series C Preferred Stock; and
WHEREAS, Telesat, the Rigas Family and the Company have reached the
agreements set forth herein and desire to provide the Registrable Securities (as
defined herein) held by Telesat and the Rigas Family subject to the rights
described herein.
NOW, therefore, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. For purposes of this Agreement:
The term "Act" means the Securities Act of 1933, as
amended, or any other statute in effect from time to time corresponding to such
act.
The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act and the declaration or
ordering of effectiveness of such registration statement.
The term "Registrable Securities" means (i) the
Series C Preferred Stock held by the Holders (as herein defined), (ii) the Class
A Common Stock of the Company, par value $.01 per share (the "Class A Common
Stock") into which the Series C Preferred Stock held by the Holders, or such
additional Series C Preferred Stock which may be issued as a dividend or
distribution on such Series C Preferred Stock, shall be converted pursuant to
the Certificate of Incorporation, and (iii) any securities of the Company issued
as a dividend or other distribution with respect to, or in exchange or in
replacement of, such Series C Preferred Stock or Class A Common Stock.
Registrable Securities, if transferred pursuant to an exemption from
registration under the Act, will remain Registrable Securities.
The term "Holder" or "Holders" means (i) Telesat and
the Rigas Family, and (ii) any other person holding Registrable Securities to
whom these registration rights have been transferred.
2. Request for Registration. If at any time the Company shall receive a
written request (specifying that it is being made pursuant to this paragraph 2)
from the Holders holding more than ten percent (10%) of the Registrable
Securities held by all Holders at that time outstanding that the Company file a
registration statement or similar document under the Act, covering the
registration of Registrable Securities with a market value of not less than
$1,000,000, then the Company shall promptly notify all other Holders of such
request and shall use its best efforts to cause all Registrable Securities that
Holders have requested by so registered to be registered under the Act.
The Company shall be obligated to effect two (2) registrations per
calendar year pursuant to this paragraph 2 (other than on Form S-3). At the
option of a majority-in-interest of the selling Holders, any registration under
this paragraph 2 must be for an underwriter or underwriters of recognized
national standing reasonably acceptable to the Company.
Notwithstanding the foregoing, the Company shall not be obligated to
cause a registration statement to be filed and declared effective pursuant to
this Section 2, or if the registration statement is effective, the Company may
request the Holders not to (and upon such request the Holders hereby agree not
to) make any sales pursuant thereto, for up to two periods of ninety (90) days
each, there being not less than 90 days between any two such periods, as the
Company shall specify, provided that the Company shall furnish to each such
Holder a certificate signed by the President, the Chief Executive Officer or a
Vice President or a Vice Chairman of the Company stating that in the good faith
judgment of the Company it would be detrimental to the Company or its
shareholders for a registration statement to be filed or for sales to occur
under an effective registration statement.
3. Piggyback Registration. Subject to paragraph 8, if at any time or
from time to time the Company proposes to register any of its equity securities
under the Act in connection with a primary or secondary public offering of such
securities solely for cash on a form that would also permit the registration of
the Registrable Securities, the Company shall, each such time, promptly give
each Holder written notice of such determination. Upon the written request of
any Holder given within twenty (20) days after mailing of any such notice by the
Company, the Company shall use its best efforts to cause to be registered under
the Act all of the Registrable Securities that each such Holder has requested be
registered.
4. Registrations on Form S-3. If (i) a Holder or Holders request in
writing (specifying that it is being made pursuant to this paragraph 4) that the
Company file a registration statement on Form S-3 (or any successor form to Form
S-3 regardless of its designation) for a public offering of shares of the
Registrable Securities and (ii) the Company is a registrant entitled to use Form
S-3 to register such shares, then the Company shall notify all other Holders of
such request and shall use its best efforts to cause to be registered on Form
S-3 (or any successor form to Form S-3) all of the Registrable Securities that
each Holder requests to be so registered. Rights to registration under this
paragraph 4 are unlimited in number and are in addition to, and not in lieu of,
rights to registration under paragraphs 2 and 3.
5. Obligations of the Company. Whenever required under
paragraphs 2, 3 or 4 to use its best efforts to effect the registration of any
Registrable Securities, the Company shall, as promptly as practicable:
Prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become and remain effective until all Registrable Securities to be sold under
such registration statement shall have been sold by Holders, either pursuant to
such registration statement or pursuant to an exemption from the Act.
Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
Furnish to the Holders and deliver as directed such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, and further provided that (anything
in this Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then such
expenses shall be payable by selling shareholders pro rata, to the extent
required by such jurisdiction.
In the event that Holders of Registrable Securities
propose to sell Registrable Securities pursuant to an underwritten offering, the
Company shall enter into a customary underwriting agreement. The Company shall
have the right to approve the managing underwriters proposed by the Holders for
such offering; provided, however, that such approval shall not be unreasonably
withheld.
6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding them, the
Registrable Securities held by them, and the intended method of disposition of
such securities as the Company shall reasonably request and as shall be required
in connection with the action to be taken by the Company.
7. Expenses of Demand Registration. All expenses incurred in connection
with a registration pursuant to paragraph 2 or 4 (excluding underwriters'
discounts and commissions), including without limitation all registration and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel for the selling Holders shall be borne by the Company; provided,
however, that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to paragraph 2 if the registration
request is subsequently withdrawn, unless the Holders agree to forfeit their
right to one demand registration pursuant to paragraph 2; and provided further
that the Holders may withdraw a request if the audited financial statements of
the Company materially and adversely differ from the information previously
disclosed to the Holders at the time of their request, in which event the
Holders shall not be required to pay any of the expenses and shall retain the
right to require the Company to register Registrable Securities pursuant to
paragraph 2.
8. Company Registration Expenses. In the case of any registration
effected pursuant to paragraph 3, the Company shall bear all registration and
qualification fees and expenses (excluding underwriters' discounts and
commissions), including any additional cost and disbursements of counsel for the
Company that result from the inclusion of securities held by the Holders in such
registration; provided, however, that each selling Holder shall bear the fees
and costs of its own counsel.
9. Underwriting Requirements. In connection with any offering involving
an underwriting of shares being sold pursuant to a registration statement
subject to Section 3 of this Agreement, such Registrable Securities as are
requested to be included in such offering pursuant to this Agreement shall be
included in such offering on the same terms as other securities of the same
class as the Registrable Securities included in such offering; provided,
however, that if in the written opinion of the managing underwriter or
underwriters, the total amount of such securities to be so registered, when
added to such Registrable Securities, will exceed the maximum amount of the
Company's securities which can be marketed without otherwise materially and
adversely affecting the entire offering, then the Company shall exclude from
such offering (a) first, all securities other than Registrable Securities held
by the Holders, being sold for the account of persons other than the Company,
(b) next, the minimum number of Registrable Securities held by the Holders, pro
rata to the extent practicable on the basis of the number of Registrable
Securities requested to be registered among the selling Holders as is necessary
in the opinion of the managing underwriter or underwriters to reduce the size of
the offering, and (c) last, the minimum number of securities for the account of
the Company which in the opinion of the managing underwriter or underwriters may
be excluded.
10. Delay of Registration. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
11. Indemnification and Contribution. Subject to paragraph 8 in
the event any Registrable Securities are included in a registration statement
under this Agreement:
To the extent not prohibited by law the Company will
indemnify and hold harmless each Holder requesting or joining in a registration,
any underwriter (as defined in the Act) for it, and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934 (the "1934 Act") against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Act, the 1934 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based on any
untrue or alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading or arise out of any violation by the Company of any rule or
regulation promulgated under the Act or the 1934 Act applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration; and will reimburse each such Holder such underwriter, or
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnify agreement contained
in this paragraph 11(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person.
To the extent not prohibited by law, each Holder
requesting or joining in a registration will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
(within the meaning of the Act or the 1934 Act) against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer, controlling person, agent or underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, agent or underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this paragraph 11(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is affected without the consent of such Holder (which consent shall
not be unreasonably withheld).
Promptly after receipt by an indemnified party under
this paragraph of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this paragraph, notify the indemnifying party in writing of the
commencement thereof and (unless the interest of the indemnifying party
conflicts with that of the indemnified party) the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
failure to notify an indemnifying party promptly of the commencement of any such
action, if prejudicial to his ability to defend such action, shall relieve such
indemnifying party, to the extent that he is prejudiced thereby, of any
liability to the indemnified party under this paragraph, to the extent that he
is prejudiced thereby, of any liability to the indemnified party under this
paragraph, but the omission so to notify the indemnifying party will not relieve
him of any liability that he may have to any indemnified party otherwise than
under this paragraph.
In order to provide for just and equitable
contribution to joint liability under the Act in any case in which either (i)
any Holder exercising rights under this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this paragraph 11
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this paragraph 11 provides
for indemnification in such case, or (ii) contribution under the Act may be
required on the part of any such selling Holder or any such controlling person
in circumstances for which indemnification is provided under this paragraph 11;
then, and in each such case, the indemnifying party, in lieu of iindemnifying
such indemnified party hereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other in
connection with statements or omissions that resulted in such loss, liability,
claim, damage or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission; provided, however,
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered by it pursuant to such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
12. Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Company agrees to use its best efforts to:
make and keep public information available, as those
terms are understood and defined in Rule 144, at all times subsequent to ninety
(90) days after the effective date of the first registration statement covering
an underwritten public offering filed by the Company;
file with the SEC in a timely manner all reports and
other documents required of the Company under the 1934 Act; and
furnish to any Holder so long as such Holders own
any of the Registrable Securities forthwith upon request a written statement by
the Company that it has complied with the reporting requirements of Rule 144 (at
any time after ninety (90) days after the effective date of said first
registration statement filed by the Company), and of the Act and the 1934 Act
(at any time after it has become subject to such reporting requirements), a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC permitting the selling
of any such securities without registration.
13. Lockup Agreement. In consideration for the Company agreeing to its
obligations under this Agreement, each Holder agrees in connection with any
registration of the Company's Class A Common Stock or Class B Common Stock for
sale by the Company to the general public that, upon the request of the Company
or the underwriters managing any underwritten offering by the Company of the
Company's securities, not to sell, make short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Registrable Securities (other
than those included in the registration) without the prior written consent of
the Company or such underwriters, as the case may be, for such period of time
(not to exceed one hundred twenty (120 days) from the effective date of such
registration as the Company or the underwriters may specify; provided, however,
that the Company may not discriminate among the Holders with respect to any
lockup arrangements pursuant to this Section 13.
14. Certain Limitations in Connection with Future Grants of
Registration Rights. From an after the date of this Agreement, the Company shall
not enter into any agreement with any holder or prospective holder of any
securities of the Company providing for the granting to such holder of
registration rights unless:
such agreement includes the equivalent of paragraph
13 as a term; and
(b) such registration rights, if more favorable than those
granted herein, are extended to the Holders or their transferees permitted under
paragraph 15.
15. Transfer of Demand Registration Rights. The demand registration
rights of the Holders under Sections 2 and 4 may be not transferred except (a)
to an affiliate of Telesat or the Rigas Family (without restriction as to a
minimum amount of Registrable Securities transferred), or (b) to a person who
acquires at least 25% of the Registrable Securities originally issued to either
Telesat or the Rigas Family. The Company shall be given written notice by the
Holder at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being assigned.
16. Entire Agreement. This Agreement and the documents referred
to herein constitute the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and negotiations
relating thereto.
17. Governing Law. This Agreement, together with the rights and
obligations of the parties hereunder shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
any jurisdiction's conflicts of laws provisions.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
19. Titles and Subtitles. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.
20. Notices. Any notice, request or other communication required or
permitted under this Agreement shall be given in writing and shall be deemed to
be effectively given upon (i) personal delivery, (ii) delivery by U.S. Express
Mail or other overnight courier service which provides evidence of delivery,
(iii) legible facsimile transmission, or (iv) the expiration of three (3) days
following deposit with the United States Postal Service, by registered or
certified mail, postage prepaid, addressed, in each case, as follows:
If to the Company:
Adelphia Communications Corporation
Attn: Timothy J. Rigas
5 West Third Street
Coudersport, Pennsylvania 16915
Telephone: (814) 274-9830
Facsimile: (814) 274-7098
with a copy to:
Buchanan Ingersoll Professional Corporation
One Oxford Centre
301 Grant Street, 21st Floor
Pittsburgh, Pennsylvania 15219
Attn: Carl E. Rothenberger, Jr., Esq.
Telephone: (412) 562-8826
Facsimile: (412) 562-1041
If to Telesat:
Telesat Cablevision, Inc.
11760 U.S. Highway One
Suite 600
N. Palm Beach, Florida 33408
Attn: Leslie J. Gelber
Telephone:
Telecopier No.: (561) 691-3615
with a copy to:
Abigail Watts-Fitzgerald
Steel Hector & Davis, LLP
200 South Biscayne Blvd.
Miami, Florida 33131
Telephone:
Facsimile: (305) 577-7001
If to the Rigas Family
Highland Holdings
5 West Third Street
Coudersport, Pennsylvania 16915
Attention: Timothy J. Rigas
Telephone: (814) 274-9830
Facsimile: (814) 274-7098
or at such other address as any party may designate by ten (10) days advance
written notice to the other party in accordance with the provisions of this
Paragraph.
21. Amendments. This Agreement may not be amended without the
written consent of the Company and the holders of at least a majority in
interest of the then outstanding Registrable Securities.
[remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by a duly authorized representative as of the day first above written.
COMPANY:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Timothy J. Rigas
Name: Timothy J. Rigas
Title: Executive Vice President
TELESAT CABLEVISION, INC.
By: /s/ L. J. Gelber
Name: L. J. Gelber
Title: Vice President
THE RIGAS FAMILY:
HIGHLAND HOLDINGS
By: /s/ Michael J. Rigas
Name: Michael J. Rigas
Title: Partner
July 1, 1997
Adelphia Communications Corporation
5 West Third Street
Coudersport, Pennsylvania 16915
Re: Purchase of 13% Cumulative Exchangeable Preferred Stock Due 2009, Series A
Gentlemen:
The undersigned hereby agrees to purchase directly from you, and you
agree to sell to the undersigned, upon the terms and subject to the conditions
set forth herein, 550,000 shares (the "Shares") of the 13% Cumulative
Exchangeable Preferred Stock Due 2009, Series A, par value $.01 per share (the
"Exchangeable Preferred Stock"), of Adelphia Communications Corporation, a
Delaware corporation (the "Company"), at a purchase price of $98.842 per share.
Each capitalized term used herein without being defined herein shall have the
meaning ascribed to it in that certain purchase agreement, of even date
herewith, among the Company and Smith Barney Inc., Bear, Stearns & Co., Inc.,
NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc. (the "Initial
Purchasers"), with respect to the offering and sale of 950,000 shares of the
Exchangeable Preferred Stock (the "Purchase Agreement").
The parties hereto agree that the undersigned is entitled to rely on
the representations and warranties made by the Company in the Purchase
Agreement; provided, however, that the undersigned represents and warrants to
the Company that such representations and warranties are true and correct to the
best of its knowledge.
The purchase and sale of the Shares as contemplated hereby shall take
place on the Closing Date concurrently with the closing on the Exchangeable
Preferred Stock with the Initial Purchasers. No commissions or discounts shall
be paid to any placement agent for such purchase or sale of the Shares. The
Shares shall be purchased and shall be held for investment.
The obligations of the parties hereto are conditioned upon (i) the
concurrent closing on the purchase and sale of the Exchangeable Preferred Stock
as contemplated by the Purchase Agreement, and (ii) the execution by the Company
and the Initial Purchasers of the Exchangeable Preferred Stock Registration
Rights Agreement; provided that, upon execution thereof by the undersigned, the
undersigned shall have rights to registration with respect to any shares of 13%
Cumulative Exchangeable Preferred Stock Due 2009, Series B (the "Series B
Shares") which it may receive in a private exchange offer with the Company as
though such Series B Shares were Shares. This Agreement shall be terminated
without liability on the part of any party hereto in the event that the Purchase
Agreement is terminated.
This Agreement shall be effective upon execution and delivery, by the
parties thereto, of the Purchase Agreement.
This Agreement may be executed in one or more counterparts each of
which, taken together, shall constitute one and the same agreement.
[The remainder of this page has been intentionally left blank.]
<PAGE>
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without giving effect to the
principles of conflicts of law thereof.
Very truly yours,
HIGHLAND HOLDINGS
By: /s/ James P. Rigas
Its: General Partner
Agreed to and accepted by
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James Brown
Its: VP
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
between
ADELPHIA COMMUNICATIONS CORPORATION
and each of
THE PURCHASERS WHO ARE PARTIES HERETO
JUNE 22, 1997
<PAGE>
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of June 22, 1997, between ADELPHIA COMMUNICATIONS CORPORATION, a
Delaware corporation (the "Company"), and each of the Purchasers listed on the
signature pages hereof (each a "Purchaser" and collectively, the "Purchasers").
PREAMBLE
The Company proposes to issue and sell to the Purchasers, and the
Purchasers propose to purchase from the Company, the number of shares of the
Company's Series C Convertible Preferred Stock, par value $.0l per share (the
"Series C Preferred Stock"), set forth opposite their respective names on
Schedule 2.1 attached hereto.
Therefore, in consideration of the mutual promises set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. CERTAIN DEFINITIONS
Capitalized terms used herein and not otherwise defined shall have the
following meanings:
"Affiliate" shall mean, with respect to any specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with the Person specified, including
without limitation any director, partner or principal of the Person specified.
"Business Day" shall mean any day other than a Saturday, Sunday, legal
holiday or other day on which banks are not open in Pittsburgh, Pennsylvania.
"Closing" shall mean the consummation of the transactions contemplated
hereby and by the other Transaction Documents to be consummated on the Closing
Date.
"Closing Date" shall mean the date when the Closing occurs which shall
be the same date as the date of the closing of the Proposed Offerings.
"Commission" shall mean the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" shall mean all classes and categories of the common
stock of the Company whether issued or issuable, including without limitation
the Company's Class A Common Stock, par value $.01 per share.
"Final Offering Memorandum" means the final offering memorandum
prepared in conjunction with the Proposed Offerings.
"GAAP" shall mean United States generally accepted accounting
principles, which shall include without limitation official interpretations
thereof by the Financial Accounting Standards Board and its successors.
"Governmental Person" shall mean any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, agency, bureau, body
or entity of the United States of America or of any state, county, municipality
or other political subdivision located therein.
"Governmental Rule" shall mean any law (including common law), statute,
rule, regulation, ordinance, code, order, writ, judgment, injunction, decree,
guideline, directive or decision of any Governmental Person, whether now or
hereafter existing, as any of the same may be amended.
"Material Adverse Effect" shall have the meaning assigned to that term
in Section 3.3.
"Offering Documents" shall mean the Company's Annual Report on Form
10-K for fiscal year 1997 as filed with the Commission, the Company's
Registration Statement on Form S-4 at File No. 333-26467, the Offering
Memorandum and such other documents as have been delivered to the Purchasers by
the Company in connection with this Agreement.
"Offering Memorandum" shall mean the Preliminary Offering Memorandum,
or the latest draft thereof available as of the date of this Agreement, relating
to the Proposed Offerings.
"Person" shall mean any individual, partnership, corporation, trust,
joint venture, unincorporated organization or other entity, including without
limitation any Governmental Person.
"Proposed Offerings" shall mean the proposed offerings by the Company
of senior notes due 2007 and cumulative exchangeable preferred stock due 2012.
"Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of such
registration statement by the Commission.
"Registration Rights Agreement" shall have the meaning assigned to that
term in Section 5.1.
"Securities Act" shall mean the Securities Act of 1933 and all rules,
regulations and orders issued thereunder, as any of the same may be amended.
"Transaction Documents" shall mean the Registration Rights Agreement
and this Agreement.
2. SERIES C PREFERRED STOCK PURCHASE TERMS
Purchase of Series C Preferred Stock.
Purchase and Sale. Subject to the terms and
conditions and in reliance upon the representations and warranties set forth
herein, the Company shall issue and sell to each of the Purchasers, and each of
the Purchasers shall purchase from the Company, the number of shares of Series C
Preferred Stock (collectively, the "Shares") for the consideration (the
"Purchase Price") set forth opposite their respective names on Schedule 2.1.
Payment. Each Purchaser shall pay in full the
Purchase Price in cash at the Closing.
Closing. The Closing shall take place immediately prior to
the closing of the Proposed Offerings or at such time or place, as the parties
may mutually agree upon and shall be subject to the conditions set forth in
Section 5 hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of the Purchasers as
follows:
The Offering Documents and any amendments or supplements
thereto did not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit 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, however, that this representation and
warranty and others made herein by the Company shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by a Purchaser concerning such Purchaser expressly for
use therein (the "Purchaser Information"). The Offering Documents, as of their
respective dates, contain all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Act and the Final Offering Memorandum
as of the Closing Date will not contain an untrue statement of a material fact
or omit to state a matierial fact necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading;
The Company has not sustained since March 31, 1997 any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Documents; and since the respective dates as of
which information is given in the Offering Documents, there has not been any
reduction in the consolidated stockholders' equity or change in the capital
stock, as applicable (other than reductions in the ordinary course of business
consistent with prior periods), material increase in the total amount of
short-term debt (excluding trade payables) and long-term debt of the Company or
any of its material subsidiaries (the "Subsidiaries") or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, partners'
equity, shareholders' equity or results of operations of the Company and its
Subsidiaries, otherwise than as set forth or contemplated in the Offering
Documents;
Each of the Company and its Subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Offering
Documents or such as do not affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries; and any real property and buildings held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries; except in any case that would not
have a material adverse effect on the business, general affairs, management or
financial position (other than reductions in the ordinary course of business
consistent with prior periods), results of operations or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect");
(i) Each of the Subsidiaries that are partnerships has been
duly formed and is validly existing as a partnership in good standing under the
laws of its state of formation, with full power and authority (partnership and
other) to own its properties and conduct its business as described in the
Offering Documents, and has been duly qualified as a foreign partnership for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material Adverse Effect;
and (ii) each of the Company and the Subsidiaries that are corporations has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its state of incorporation, with full power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Documents, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction except where the failure to so qualify would not have a
Material Adverse Effect;
Each of the Company and its Subsidiaries has the ownership or
authorized capitalizations, as the case may be, as set forth in the Offering
Documents except as otherwise set forth on Schedule 3.26, and all of the
partnership interests of the Subsidiaries that are partnerships and all of the
issued shares of capital stock of its Subsidiaries that are corporations have
been duly and validly authorized and issued and with respect to shares of
capital stock are fully paid and nonassessable; and all of the partnership
interests of the Subsidiaries disclosed in the Offering Documents as being owned
directly or indirectly by the Company and all of the issued shares of capital
stock of the Subsidiaries that are corporations have been duly and validly
authorized and issued, are fully paid and nonassessable and are owned directly
or indirectly by the Company free and clear of all liens, encumbrances, equities
or claims (other than liens to secure indebtedness under credit facilities
disclosed in the Offering Documents);
The Shares have been duly authorized and, upon delivery of
and payment for such Shares as herein provided, each Purchaser will acquire good
and valid title thereto, free and clear of any claim, suit, proceedings, call,
voting trust, proxy, restriction, security interest, lien or other encumbrance
of any kind or nature whatsoever; and the shares of Class A Common Stock
issuable upon conversion of the Series C Preferred Stock have been duly and
validly reserved and, when issued in accordance with the conversion rights
applicable to the Series C Preferred Stock, will be duly authorized, validly
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof, and free and clear of all liens, charges, restrictions
(except those imposed by applicable state and federal securities laws), claims
and encumbrances; and neither the issuance, sale or delivery of the Series C
Preferred Stock nor the issuance or delivery of the shares of Common Stock
issuable upon conversion of the Series C Preferred Stock is subject to any
preemptive right of shareholders of the Company or to any right of first refusal
or other right in favor of any Person;
None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Shares) will violate or result in a violation of Section 7 of the Exchange Act,
or any regulation promulgated thereunder, including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System;
Prior to the date hereof, neither the Company nor any of its
Subsidiaries (other than the Purchasers or any Person acting on its behalf as to
which the Company makes no representation) has taken, directly or indirectly,
any action which is designed to or which has constituted or which might have
been expected to cause or result in stabilization or manipulation of the price
of any security of the Company in connection with the offering of the Shares;
This Agreement has been duly authorized by the Company and,
when executed and delivered by the Company and the Purchasers, will constitute a
valid and legally binding instrument, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
The issue and sale of the Shares and the compliance by the
Company with all of the provisions of the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or instrument or other agreement or instrument
(including, without limitation, any license or franchise granted to the Company
or one of its Subsidiaries by a local franchising governmental body) to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or has rights under or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, nor will such
action result in any violation of the provisions of the certificate of
incorporation or bylaws of the Company or its Subsidiaries that are corporations
or the certificates of limited partnership or the partnership agreements of its
Subsidiaries that are partnerships or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their properties; and, except
as related to the Hart-Scott-Rodino Act (as defined) and necessary approvals
thereunder relating to the conversion of the Shares, no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the transactions contemplated by this
Agreement, or the Registration Rights Agreement, other than (i) such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Purchasers, (ii) the filing of a registration
statement by the Company with the Commission pursuant to the Securities Act
pursuant to the Registration Rights Agreement, and (iii) such other consents,
approvals, authorizations, registrations or qualifications as may be required
under the Securities Act, state or foreign securities or Blue Sky laws in
connection with the offer or resale registration contemplated in the
Registration Rights Agreement in connection with the resale of the Shares by the
Purchasers;
None of the Company or its Subsidiaries is in violation of
its certificate of incorporation or bylaws, as the case may be, or in default in
the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or instrument or
other agreement or instrument (including, without limitation, any license or
franchise granted to the Company or a Subsidiary by a local franchising
governmental body) to which the Company or a Subsidiary is a party or by which
it or any of its properties may be bound, except for such defaults as would not
have individually or in the aggregate a Material Adverse Effect, nor is the
Company or any of its Subsidiaries in violation of a Governmental Rule, order or
permit, or license of any Governmental Person which violation would result in a
Material Adverse Effect;
The statements set forth herein, including Exhibit A, insofar
as they describe the terms of the Shares, and those statements set forth under
the captions "Business" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the Offering Documents, insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects;
None of the Company or its Subsidiaries is or, after giving
effect to the offering and sale of the Shares, will be an "investment company,"
or an entity "controlled" by an "investment company," as such terms are defined
in the United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
None of the Company or any Person acting on its behalf (other
than the Purchasers or Affiliates of the Purchasers, as to which the Company
makes no representation or warranty) has offered or sold the Shares by means of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act;
Within the preceding six months, none of the Company or any
other Person acting on behalf of the Company (other than the Purchasers or
Affiliates of the Purchaser, as to which the Company makes no representation or
warranty) has offered or sold to any Person any Shares, or any securities of the
same or a similar class as the Shares, other than the Shares offered or sold to
the Purchasers hereunder and other than as described in the Offering Documents;
Neither the Company nor any of its Affiliates does business
with the government of Cuba or with any Person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
Other than as set forth in the Offering Documents (including
those matters referred to therein relating to general rulemakings and similar
matters relating generally to the cable television industry), there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the Company or any
of its Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or by others; and
except with respect to general rulemakings and similar matters relating
generally to the cable television industry, during the time the Systems (as
defined below) have been owned by the Company or a subsidiary (i) there has been
no adverse judgment, order or decree issued by the United States Federal
Communications Commission (the "FCC") relating to any of the Systems that has
not been disclosed in the Offering Documents that would be required to be
disclosed in a public offering registered under the Act, and (ii) there are no
actions, suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its Subsidiaries
or any System;
Deloitte & Touche LLP, who has reported on the financial
statements of the Company, is an independent public accountant as required by
the Securities Act and the rules and regulations of the Commission thereunder;
and the financial statements set forth in the Offering Documents fairly present
the financial position of the Company as of the respective dates thereof and
have been prepared in conformity with generally accepted accounting principles
(GAAP) except as otherwise indicated in the independent auditor's report
thereon;
Except for matters covered by Section 3.22 or with respect to
matters that would not individually or in the aggregate have a Material Adverse
Effect, (i) the Company and its Subsidiaries have made all filings, recordings
and registrations with, and possess all validations or exemptions, approvals,
orders, authorizations, consents, licenses, certificates and permits from, the
FCC, applicable public utilities and other federal, state and local regulatory
or governmental bodies and authorities or any subdivision thereof, including,
without limitation, cable television franchises, pole attachment agreements and
cable antenna relay service, broadcast auxiliary, earth station, business radio,
microwave or special safety radio service licenses issued by the FCC
(collectively, the "Authorizations") necessary or appropriate to own, operate
and construct the cable communication systems owned by them (the "Systems") or
otherwise for the operation of their businesses and are not in violation
thereof; (ii) all such Authorizations are in full force and effect, and no event
has occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or modification of any Authorization which is necessary
or appropriate to own, operate and construct the Systems or otherwise for the
operation of any such business; (iii) none of the Company or any of its
Subsidiaries is in violation of any duty or obligation required by the United
States Communications Act of 1934, as amended (the "Communications Act"), or any
FCC rule or regulation applicable to the operation of any portion of any of the
Systems; (iv) none of the Company or any of its Subsidiaries is in violation of
any duty or obligation required by state or local laws, or local rules or
regulations, applicable to the operation of any portion of any of the Systems;
(v) there is not pending or, to the best knowledge of the Company or any of its
Subsidiaries, threatened any action by the FCC or state or local regulatory
authority to modify, revoke, cancel, suspend or refuse to renew any
Authorization; (vi) other than as described in the Offering Documents, there is
not now issued or outstanding or, to the best knowledge of the Company or any of
its Subsidiaries, threatened any notice of any hearing, material violation or
material complaint against the Company or any of its Subsidiaries with respect
to the operation of any portion of the Systems, and none of the Company or its
Subsidiaries has any knowledge that any Person intends to contest renewal of any
material Authorization;
(i) (A) The Company and its Subsidiaries have entered into,
or have rights under, all required programming agreements (including, without
limitation, all nonbroadcast affiliation agreements under which the Company and
its Subsidiaries are accorded retransmission rights relating to programming that
the Systems provide to their customers) that are material to the conduct of
their business as described in the Offering Documents; and (B) all such material
agreements are in full force and effect, and none of the Company, any of its
Subsidiaries or any of its affiliates has received any written notice of
revocation or material modifications of such material agreements; and (ii) (A)
either the Company or its Subsidiaries have entered into agreements with the
television stations that have notified the Company or its Subsidiaries that such
station's respective consent is required to carry such stations on the Systems
or has ceased carrying such stations without resulting in a Material Adverse
Effect; (B) all such agreements grant the Company or one of its Subsidiaries
retransmission consent in exchange for various noncash consideration; and (C)
all such agreements are in full force and effect and are not subject to
revocation (except in the case of material breach by the Company or its
Subsidiaries) or material modifications, and no event has occurred that permits,
or after notice or lapse of time could permit, the revocation, termination or
material modification of any such agreement, except where the failure of such
agreements to be in full force and effect or such revocation would not, in
either case, individually or in the aggregate have a Material Adverse Effect;
Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, (i) all registration statements and
all other documents (including but not limited to annual reports) required by
the FCC in connection with the operation of the Systems have been filed with the
FCC; (ii) all frequencies within the restricted aeronautical and navigational
bands (i.e., 108-136 MHz and 225-400 MHz) which are currently being used in
connection with the operation of the Systems have been authorized for such use
by the FCC; (iii) each of the Systems subject to Equal Employment Opportunity
Commission ("EEO") compliance certification by the FCC has been certified by the
FCC for annual EEO compliance during the time such Systems have been owned by
the Company or its Subsidiaries; and (iv) all towers associated with the Systems
are in compliance with the rules and regulations of the United States Federal
Aviation Administration;
Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, none of the Company or any of its
Subsidiaries is in breach or violation of, or in default under, any of the
terms, conditions or provisions of the Communications Act or the rules,
regulations or policies of the FCC thereunder;
(i) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, all statements of accounts and any
other filings that are required under Section 111 of the United States Copyright
Act of 1976, as amended, in connection with the retransmission of any broadcast
television and radio signals on the Systems have been timely filed with the
United States Copyright Office, and indicated royalty payments have been made
for each System for each accounting period during which such Systems have been
owned by the Company or its Subsidiaries; (ii) none of the Company, any of its
Subsidiaries or any System has received any inquiry or request from the United
States Copyright Office or from any other party challenging or questioning any
such statements of account or royalty payments; and (iii) no claim of copyright
infringement has been made or threatened in writing against the Company, any of
its Subsidiaries or any System;
Neither the execution and delivery of this Agreement or the
Registration Rights Agreement nor the consummation of the transactions
contemplated hereby and thereby nor compliance with the terms, conditions and
provisions thereof by the Company will conflict with the Communications Act or
the rules, regulations or policies of the FCC thereunder, or will cause any
suspension, revocation, impairment, forfeiture, nonrenewal or termination of any
material license, permit, franchise, certificate, consent, authorization,
designation, declaration, filing, registration or qualification;
Neither the execution and delivery of this Agreement or the
Registration Rights Agreement nor the execution, delivery, offer, issuance and
sale of the Shares nor compliance with the terms, conditions and provisions
thereof by the Company requires any license, permit, franchise, certificate,
consent, authorization, designation, declaration, filing, registration or
qualification by or with the FCC; and
The capitalization as of the date hereof the Company is set
forth on Schedule 3.26.
No finders, brokers, agents, financial advisors, investment
bankers or other intermediaries have been employed by or otherwise acted on
behalf of the Company, and the Company has not incurred any liability to pay any
fees or other amounts to any such Person, in connection with any of the
transactions contemplated by the Transaction Documents.
Assuming the closing of this Agreement and the transactions
contemplated herein, the Company would be in a position such that it would be
able to begin making the dividend payments on the Series C Preferred Stock as
provided in the Certificate of Designations.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers, severally and not jointly, represents and
warrants to the Company as follows:
(a) Each Purchaser represents that the Series C Preferred
Stock to be received by it hereunder will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the sale or other
transfer of any part thereof or interest therein, and that it has no present
intention of selling or otherwise transferring the same or any of the Class A
Common Stock into which such Series C Preferred Stock is convertible, but
subject nevertheless to any requirement of law that the disposition of its
property shall at all times be within its control. Each Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any Person relating to the sale or other transfer of any part
of or interest in any of such Series C Preferred Stock or Class A Common Stock
other than as contemplated hereby.
Each Purchaser understands that the Series C
Preferred Stock to be received by it hereunder is not, and that the Class A
Common Stock into which such Series C Preferred Stock is convertible is not and
may not at the time of its issuance be, registered under the Securities Act, on
the ground that the sale provided for in this Agreement and the issuance of the
Series C Preferred Stock is exempt from registration under the Securities Act,
and that the Company's reliance on such exemption is predicated in part on each
Purchaser's representations set forth herein.
Each Purchaser represents that (i) its domicile
(if it is an individual) or its principal place of business (if it is an entity)
is located in the state set forth below its name on the signature page hereof,
(ii) it is an "accredited investor" as defined in Regulation D under the
Securities Act or, in the alternative, (iii) it is experienced in evaluating and
investing in companies such as the Company, has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment hereunder and has the ability to bear the economic risks
of such investment.
Each Purchaser understands that (i) the Company will
permit transfers of the Series C Preferred Stock purchased hereunder and the
Class A Common Stock into which such Series C Preferred Stock is convertible
only when such securities have been registered under the Securities Act and any
other applicable federal or state securities law or when the request for
transfer is accompanied by an opinion of counsel, which opinion and counsel
shall be reasonably acceptable to the Company, to the effect that the proposed
transfer does not require any such registration; provided, however, that a
holder may transfer such securities to an Affiliate of such holder without the
need for an opinion of counsel, (ii) any transfer made or purportedly made in
violation of the foregoing restrictions shall be null and void, and the Company
shall not register or record such attempted transfer in its books and records,
and (iii) the following legend shall be placed on the certificates representing
any of such Preferred or Class A Common Stock:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS,
EXCEPT AS PROVIDED IN THE PREFERRED STOCK PURCHASE AGREEMENT,
THE HOLDER HEREOF DELIVERS TO THE ISSUER HEREOF AN OPINION OF
COUNSEL, WHICH OPINION AND COUNSEL SHALL BE SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT THE PROPOSED TRANSFER DOES NOT
REQUIRE ANY SUCH REGISTRATION.
Each Purchaser which is not an individual has the power and
authority to own its properties and assets, to conduct its business as presently
conducted and as presently planned to be conducted, to execute and deliver the
Transaction Documents, to consummate the transactions contemplated thereby and
to perform its obligations thereunder. The execution and delivery by each
Purchaser which is not an individual of the Transaction Documents, the
consummation of the transactions contemplated thereby and the performance by
such Purchaser of its obligations thereunder have been duly and validly
authorized by all necessary proceedings on its part.
This Agreement has been, and on the Closing Date the
Registration Rights Agreement will be, duly and validly executed and delivered
by each Purchaser and constitute, and on the Closing Date will constitute,
legal, valid and binding obligations of each Purchaser enforceable against each
such Purchaser in accordance with their respective terms, except as
enforceability may be affected by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
The execution and delivery by each Purchaser of the
Transaction Documents, the consummation of the transactions contemplated thereby
and the performance by each Purchaser of its obligations thereunder do not and
will not:
in the case of any Purchaser which is not an
individual, violate any of its organizational documents; or
breach or result in a default (or an event which,
with the giving of notice or the passage of time, or both, would constitute a
default) under, require any consent under or give to others any rights of
termination, acceleration, suspension, revocation, cancellation or amendment of
any material agreement, instrument or document to which any Purchaser is a party
or by which any Purchaser or any of its assets is bound.
Except as may relate to the Hart-Scott-Rodino Act and any
necessary approvals thereunder relating to the conversion of the Shares, the
execution and delivery by each Purchaser of the Transaction Documents, the
consummation of the transactions contemplated thereby and the performance by
each Purchaser of its obligations thereunder are not prohibited by, and do not
and will not subject any such Purchaser to any fine, penalty or similar sanction
under, any Governmental Rule.
Except as may relate to the Hart-Scott-Rodino Act and any
necessary approvals thereunder relating to the conversion of the Shares, no
consent, authorization, approval, exemption or other action by, and no filing,
registration or qualification with, any Governmental Person or other third party
is or will be necessary or advisable in connection with the execution and
delivery by each Purchaser of the Transaction Documents, the consummation of the
transactions contemplated thereby or the performance by each Purchaser of its
obligations thereunder.
There is no pending or, to the best of any Purchaser's
knowledge, threatened action or proceeding of any nature whatsoever seeking to
restrain, prohibit or invalidate any of the transactions contemplated by the
Transaction Documents, or which could result in any of the foregoing, and no
Purchaser has any knowledge of any basis for any such action or proceeding.
No finders, brokers, agents, financial advisors, investment
bankers or other intermediaries have been employed by or otherwise acted on
behalf of any Purchaser, and no Purchaser has incurred any liability to pay any
fees or other amounts to any such Person, in connection with any of the
transactions contemplated by the Transaction Documents.
5. CONDITIONS TO CLOSING
Conditions to the Purchasers' Obligations to Purchase. The
obligation of a Purchaser to purchase the Series C Preferred Stock hereunder is
subject to the fulfillment by the Company to such Purchaser's satisfaction, at
or prior to the Closing Date any of which may be waived in whole or in part by
such Purchaser:
Representations and Warranties. The representations
and warranties of the Company contained herein shall be true and correct in all
material respects as of the date hereof and as of the Closing Date with the same
force and effect as if made on each of such dates.
Performance. The Company shall have performed and
fulfilled all obligations and conditions herein required to be performed or
fulfilled by it on or prior to the Closing Date, and all documents delivered in
connection herewith shall be satisfactory in form and content to each
Purchasers.
Consents; Corporate Action. The Company shall (i)
obtain all consents, authorizations, approvals and exemptions from, and make all
filings, registrations and qualifications with, Governmental Persons and third
Persons and (ii) take all corporate action, in each case as necessary in
connection with the execution and delivery by the Company of the Transaction
Documents, the consummation of the transactions contemplated thereby or the
performance by the Company of its obligations thereunder, and the Purchasers
shall receive copies of all documents and instruments reflecting or evidencing
the same as soon as reasonably practicable.
No Litigation. There shall not be pending or
threatened any action or proceeding seeking to restrain, enjoin, prohibit or
invalidate any of the transactions contemplated by the Transaction Documents,
and no Governmental Order shall have been issued which has any such effect.
No Material Adverse Change. No Material Adverse
Effect with respect to the Company shall have occurred since March 31, 1997, and
no event shall have occurred or condition exist which, in the reasonable
judgment of the Purchasers, is likely to result in a Material Adverse Effect.
Amended Certificate of Incorporation. The Company's
Certificate of Incorporation shall be amended by the filing of a Certificate of
Designation for the Series C Preferred Stock of the Company in substantially the
form attached hereto as Exhibit A subject to such changes as to which the
parties shall in good faith negotiate and mutually agree, which shall have been
filed and become effective.
Officer's Certificate. The Company shall have
delivered to each Purchaser a certificate executed by the President of the
Company certifying as to the matters set forth in subsections (a), (b), (c),
(d), (e), (f), (i) and (j) hereof.
Secretary's Certificate. The Company shall have
delivered to each Purchaser a Certificate signed by the Secretary of the Company
certifying as to the amendment of the Certificate of Incorporation, as amended
pursuant to subsection (f) above, By-Laws, resolutions and incumbency.
Registration Rights Agreement. The Company, the Purchasers and any other parties
thereto shall each have executed and delivered a Registration Rights Agreement
between the Company and the Purchasers in substantially the form of Exhibit B
hereto.
Share Certificates. The Company shall have
delivered to the Purchasers duly authorized and executed certificates evidencing
the shares of Series C Preferred Stock purchased by them hereunder on the
Closing Date.
Conditions to the Company's Obligation to Sell. The
obligation of the Company to issue and sell the Series C Preferred Stock to a
Purchaser hereunder is subject to the fulfillment by such Purchaser, to the
Company's satisfaction, on or before the Closing Date, of each of the following
conditions, any of which may be waived in whole or in part by the Company:
Representations and Warranties. The representations
and warranties of such Purchaser contained herein shall be true and correct as
of the date hereof and as of the Closing Date with the same force and effect as
if made on each such date.
Performance. Such Purchaser shall have performed
and fulfilled all obligations and conditions herein required to be performed or
fulfilled by it on or prior to the Closing Date.
Payment of Purchase Price. Such Purchaser shall
have tendered that portion of the Purchase Price which is payable at the Closing
in accordance with Section 2.1 hereof.
6. ADDITIONAL COVENANTS OF THE COMPANY
Notices.
Commission Filings. Promptly upon transmission
thereof, the Company shall provide to each Purchaser copies of all reports,
definitive proxy statements and registration statements filed by the Company
with the Commission.
Notice of Other Events. Promptly upon becoming
aware thereof, the Company shall give notice to each Purchaser of any breach of
the Company's covenants, representations or warranties set forth in any
Transaction Document.
Reserve for Conversion Shares. If at any time the number of
authorized but unissued shares of Class A Common Stock shall not be sufficient
to effect the conversion of the Series C Preferred Stock or otherwise to comply
with the terms of this Agreement, the Company will forthwith take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.
The Company will obtain any authorization, consent, approval or other action by,
and make any filing with, any court or administrative body that may be required
under applicable state securities laws in connection with the issuance of shares
of Common Stock upon conversion of the Series C Preferred Stock.
Use of Proceeds. The net proceeds from the sale of all Series
C Preferred Stock sold hereunder shall be contributed to certain subsidiaries of
Adelphia and used substantially in the manner and for the purposes of repaying
the senior notes of such subsidiaries..
Expenses. The Company and the Purchasers shall each bear all
of its own respective expenses in connection with the Transaction Documents,
including without limitation the reasonable legal fees and disbursements of
counsel, except as expressly otherwise set forth in the Transaction Documents.
7. MISCELLANEOUS
Good Faith by Company. The Company will not, by amendment to
its Certificate of Incorporation or through any reorganization,
reclassification, consolidation, merger, sale of assets, dissolution, issue or
sale of securities or other action, avoid or seek to avoid the observance or
performance of any of the terms of this Agreement or the terms of the Series C
Preferred Stock, but will at all times in good faith carry out all such terms
and take all such action as may be necessary or appropriate to protect the
rights of the Purchasers under the Transaction Documents or the terms of the
Series C Preferred Stock.
Amendments. This Agreement may be amended or terminated only
by a writing signed by the Company and the Purchasers affected by such
amendment, and any such amendment or termination shall be effective only to the
extent specifically set forth in such writing.
Counterparts; Telefacsimile Execution. This Agreement may be
executed in any number of counterparts, and by each of the parties on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all of which shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement, but
the failure to deliver a manually executed counterpart (in addition to a
counterpart delivered by telefacsimile) shall not affect the validity,
enforceability or binding effect of this Agreement.
Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, contains the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior written and oral agreements,
and all contemporaneous oral agreements, relating to such matters.
Equitable Relief. The parties acknowledge and agree that
money damages may not be an adequate remedy for any breach of the provisions
hereof and that any party may apply to a court of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent a
breach of this Agreement.
Governing Law. This Agreement shall be a contract under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed and enforced in accordance with the laws of said Commonwealth.
Indemnification.
Following the Closing and subject to the other terms
and conditions of this Agreement, each party agrees to indemnify, defend and
hold harmless each of the other parties, and their respective successors and
assigns (each an "Indemnified Party") from and against any and all losses,
claims, damages or liabilities, joint or several, including reasonable legal and
other fees and expenses incurred in the investigation and defense of claims and
actions, and amounts paid as indemnification to directors, officers, employees
or agents, whether such claims and actions are brought by third parties or
parties hereto, incurred by an Indemnified Party and arising out of or resulting
from (i) any breach of any of such party's representations or warranties in this
Agreement or (ii) any failure to perform by such party any of its covenants or
agreements contained in this Agreement.
Promptly after receipt by an Indemnified Party under
this paragraph of notice of the commencement of any action, such Indemnified
Party will, if a claim in respect thereof is to be made against any indemnifying
party under this paragraph, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. The failure to notify
an indemnifying party promptly of the commencement of any such action, if
prejudicial to such party's ability to defend such action, shall relieve such
indemnifying party of liability to the Indemnified Party under this paragraph to
the extent of such prejudice, but the omission so to notify the indemnifying
party will not relieve the indemnifying party of any liability that the
indemnifying party may have to the Indemnified Party otherwise than under this
paragraph.
Notices. All notices, consents, requests, demands and other
communications required or permitted hereunder:
shall be in writing;
shall be sent by messenger, certified or registered
U.S. mail, a reliable express delivery service or telecopier (with a copy sent
by one of the foregoing means), charges prepaid as applicable, to the
appropriate address(es) or number(s) set forth below; and
shall be deemed to have been given on the date of
receipt by the addressee (or, if the date of receipt is not a Business Day, on
the first Business Day after the date of receipt), as evidenced by (i) a receipt
executed by the addressee (or a responsible Person in his or her office), the
records of the Person delivering such communication or a notice to the effect
that such addressee refused to claim or accept such communication, if sent by
messenger, U.S. mail or express delivery service, or (ii) a receipt generated by
the sender's telecopier showing that such communication was sent to the
appropriate number on a specified date, if sent by telecopier.
All such communications shall be sent to the following addresses or numbers, or
to such other addresses or numbers as any party may inform the others by giving
five Business Days' prior notice:
If to the Company: With copies to:
Adelphia Communications Buchanan Ingersoll P.C.
Corporation 20th Floor, One Oxford Centre
Attn: Chief Financial Officer 301 Grant Street
Main at Water Street Pittsburgh, PA 15219
Coudersport, PA 16915 Attn: Carl Rothenberger, Esq.
Fax: (814) 274-7098 Fax: (412) 562-1041
If to any Purchaser: With copies to:
To the address or number To the individual at the set
forth below such Purchaser's address or number set forth below name
on the signature page hereto such Purchaser's name on the
signature page hereto
Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of each of the parties and their respective
heirs, successors and permitted assigns. Any Purchaser may assign this Agreement
to an Affiliate of such Purchaser ("Assignee"); provided however that (i) such
Assignee shall be deemed to have made the representations and warranties of the
assigning Purchaser as provided in this Agreement and (ii) such assignment shall
not be effective until the Assignee delivers to the non-assigning parties an
executed assumption and undertaking pursuant to which the Assignee agrees to be
bound by and perform all of the obligations of the assigning Purchaser
hereunder.
Waivers. The due performance or observance by the parties of
their respective obligations hereunder shall not be waived, and the rights and
remedies of the parties hereunder shall not be affected, by any course of
dealing or performance or by any delay or failure of any party in exercising any
such right or remedy. The due performance or observance by a party of any of its
obligations hereunder may be waived only by a writing signed by the party or
parties against whom enforcement of such waiver is sought, and any such waiver
shall be effective only to the extent specifically set forth in such writing.
Exhibits and Schedules. The Exhibits and Schedules attached
hereto are an integral part hereof, and all references herein to this Agreement
shall include such Exhibits and Schedules.
Further Assurances. The parties shall from time to time do
and perform such additional acts and execute and deliver such additional
documents and instruments as may be required by applicable Governmental Rules,
including without limitation the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "Hart-Scott-Rodino Act"), or reasonably requested by any party to
establish, maintain or protect its rights and remedies or to effect the intents
and purposes of this Agreement.
<PAGE>
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ James Brown
Its: Vice President of Finance
[Purchaser signature pages are attached.]
<PAGE>
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER
HIGHLAND HOLDINGS
By: /s/ Timothy J. Rigas
Timothy J. Rigas, a general partner
Address: Main at Water Street
Coudersport, PA 16915
Attn: Timothy J. Rigas
Telecopier No.: 814/274-7098
Copies of Notices to:
Name: Carl Rothenberger, Esq.
Address: Buchanan Ingersoll P.C.
20th Floor, One Oxford Centre
301 Grant Street
Pittsburgh, PA 15219
Telecopier No.: 412/562-1041
<PAGE>
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER
TELESAT CABLEVISION, INC.
By: /s/ L. J. Gelber
Its: Vice President
Address: 11760 U.S. Highway One
Suite 600
N. Palm Beach, Florida 33408
Attn: Leslie J. Gelber
Telecopier No.: 561/691-3615
Copies of Notices to:
Name: Abigail Watts-Fitzgerald
Address: Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, Florida 33131
Telecopier No.: 305/577-7001
<PAGE>
SCHEDULE 2.1
Purchaser No. of Shares Purchase Price
Highland Holdings 80,000 $77,600,000
Telesat Cablevision, Inc. 20,000 $19,400,000
<PAGE>
SCHEDULE 3.26
CAPITALIZATION OF COMPANY
The capitalization of the Company is as set forth in the Offering Memorandum.
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION
<PAGE>
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
