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) April 28, 1999
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
<PAGE>
Item 5. Other Events.
The Registrant is filing certain exhibits under Item 7 hereof, which
are with respect to the recently announced issuances of the Registrant's Class A
Common Stock, 7-7/8% Senior Notes due 2009, and 5-1/2% Series D Convertible
Preferred Stock.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
1.01 Class A Common Stock Underwriting Agreement among Adelphia
Communications Corporation, Salomon Smith Barney Inc. and the other
underwriters named therein, as representative of the Underwriters,
dated April 23, 1999 (Filed herewith).
1.02 7-7/8% Senior Notes Underwriting Agreement among Adelphia
Communications Corporation and Chase Securities Inc., as
representative of the Underwriters, dated April 23, 1999 (Filed
herewith).
1.03 5-1/2% Series D Convertible Preferred Stock Underwriting Agreement
among Adelphia Communications Corporation and Salomon Smith Barney
Inc., as representative of the Underwriters, dated April 26, 1999
(Filed herewith).
3.01 Certificate of Designations with respect to the Registrant's 5-1/2%
Series D Convertible Preferred Stock (Filed herewith).
4.01 Base Indenture, dated as of April 28, 1999, with respect to the
Registrant's Senior Indebtedness, between the Registrant and the
Bank of Montreal Trust Company (Filed herewith).
4.02 First Supplemental Indenture, dated as of April 28, 1999, with
respect to the Registrant's 7-7/8% Senior Notes due 2009, between
the Registrant and the Bank of Montreal Trust Company (Filed
herewith).
4.03 Form of 7-7/8% Senior Note due 2009 (Contained in Exhibit 4.02).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: April 30, 1999 ADELPHIA COMMUNICATIONS CORPORATION
(Registrant)
By: /s/ Timothy J. Rigas
Timothy J. Rigas
Executive Vice President, Treasurer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1.01 Class A Common Stock Underwriting Agreement among Adelphia
Communications Corporation, Salomon Smith Barney Inc. and the other
underwriters named therein, as representative of the Underwriters,
dated April 23, 1999 (Filed herewith).
1.02 7-7/8% Senior Notes Underwriting Agreement among Adelphia
Communications Corporation and Chase Securities Inc., as
representative of the Underwriters, dated April 23, 1999 (Filed
herewith).
1.03 5-1/2% Series D Convertible Preferred Stock Underwriting Agreement
among Adelphia Communications Corporation and Salomon Smith Barney
Inc., as representative of the Underwriters, dated April 26, 1999
(Filed herewith).
3.01 Certificate of Designations with respect to the Registrant's 5-1/2%
Series D Convertible Preferred Stock (Filed herewith).
4.01 Base Indenture, dated as of April 28, 1999, with respect to the
Registrant's Senior Indebtedness, between the Registrant and the
Bank of Montreal Trust Company (Filed herewith).
4.02 First Supplemental Indenture, dated as of April 28, 1999, with
respect to the Registrant's 7-7/8% Senior Notes due 2009, between
the Registrant and the Bank of Montreal Trust Company (Filed
herewith).
4.03 Form of 7-7/8% Senior Note due 2009 (Contained in Exhibit 4.02).
Exhibit 1.01
8,000,000 Shares
Adelphia Communications Corporation
Class A Common Stock
UNDERWRITING AGREEMENT
April 23, 1999
SALOMON SMITH BARNEY INC.
As representative of the several underwriters
named on Schedule I hereto
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies & Gentlemen:
Adelphia Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 8,000,000 shares (the
"Shares") of its Class A Common Stock, $.01 par value per share (the "Class A
Common Stock"), to Salomon Smith Barney Inc., Goldman, Sachs & Co., Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley
& Co. Incorporated, Credit Lyonnais Securities (USA) Inc., NationsBanc
Montgomery Securities LLC and SG Cowen Securities Corporation (the
"Underwriters"). The Company recently announced the following pending
acquisitions: Olympus Communications, L.P., FrontierVision Partners, L.P.,
Harron Communications Corp. and Century Communications Corp. (collectively the
"Acquired Companies"). With respect to the representations, warranties and
agreements made by the Company in this Agreement concerning the Acquired
Companies, such representations, warranties and agreements shall be limited to
the knowledge of the Company in all cases.
The Company wishes to confirm as follows its agreement with the
Underwriters in connection with the purchase of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a Registration Statement on Form S-3 under the Act (the "Registration
Statement"), including a prospectus and a prospectus supplement relating to the
Shares. The term "Registration Statement" as used in this Underwriting Agreement
means the Registration Statement (including all financial schedules and
exhibits), as supplemented or amended at the time of the execution of this
Underwriting Agreement. If a post-effective amendment or supplement to a
registration statement is filed in connection with the offering of the Shares,
the term "Registration Statement" as used in this Underwriting Agreement means
the Registration Statement as amended by said post-effective amendment or
supplement. The term "Prospectus" as used in this Underwriting Agreement means
the prospectus (including the prospectus supplement relating to the Shares) in
the form included in the Registration Statement, or, if the prospectus
(including the prospectus supplement relating to the Shares) included in the
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Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus (or a prospectus supplement)
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Underwriting Agreement means the prospectus
(including the prospectus supplement relating to the Shares) in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus (including the prospectus
supplement relating to the Shares) filed with the Commission pursuant to Rule
424(b). Any reference in this Underwriting Agreement to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement or the Prospectus
and any reference to any amendment or supplement to the Registration Statement
or the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, the Prospectus, or any amendment or
supplement thereto.
For purposes of this Underwriting Agreement: "Rules and Regulations"
means the rules and regulations adopted by the Commission under either the Act
or the Exchange Act, as applicable.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter 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 Underwriter agrees to purchase from the
Company, at a purchase price of $60.76 per share (the "purchase price per
share"), the Shares.
3. Terms of Public Offering. The Company has been advised by the
Underwriters that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after this Underwriting Agreement has
become effective as in the Underwriters' judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of Latham
& Watkins, 885 Third Avenue, New York, New York 10022 at 10:00 A.M., New York
City time, on April 28, 1999 (the "Closing Date"). The place of closing for the
Shares and the Closing Date may be varied by agreement between the Underwriters
and the Company.
Certificates for the Shares to be purchased hereunder shall be
registered in such names and in such denominations as the Underwriters shall
request prior to 9:30 A.M., New York City time, on the second business day
preceding the Closing Date. Such certificates shall be made available to the
Underwriters 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.
The certificates evidencing the Shares to be purchased hereunder shall be
delivered to the Underwriters on the Closing Date, against payment of the
purchase price therefor in immediately available funds.
<PAGE>
5. Agreements of the Company. The Company agrees with the Underwriters
as follows:
(a) If, at the time this Underwriting Agreement is executed
and delivered, it is necessary for a post-effective amendment thereto to be
declared effective before the offering of the Underwritten Shares may commence,
the Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will advise
the Underwriters promptly and, if requested by the Underwriters, will confirm
such advice in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) The Company will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the Registration
Statement or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (e)
below, of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectus in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to the Underwriters, without
charge, one signed copy of the Registration Statement as originally filed with
the Commission and of each amendment and supplement thereto, including financial
statements and all exhibits thereto, and will also furnish to the Underwriters,
without charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, as the
Underwriters may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment to the Prospectus or any amendment
to any of the documents incorporated by reference in the Prospectus or amend or
supplement the prospectus supplement utilized in connection with this offering
of which the Underwriters shall not previously have been advised or to which the
Underwriters shall object after being so advised or (ii) so long as, in the
written opinion of counsel for the Underwriters, a prospectus is required to be
delivered in connection with sales by any Underwriter or dealer, file any
information, documents or reports pursuant to the Exchange Act, without
delivering a copy of such information, documents or reports to the Underwriters,
prior to or concurrently with such filing.
(e) As soon after the execution and delivery of this
Underwriting Agreement as possible and thereafter from time to time for such
period as in the written opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by any Underwriters
or dealer, the Company will expeditiously deliver to the Underwriters and each
dealer, without charge, as many copies of the Prospectus as the Underwriters may
request. The Company consents to the use of the Prospectus in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by the Underwriters
or any dealer. If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus or should be set forth therein in
<PAGE>
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 Prospectus to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof.
(f) The Company will cooperate with the Underwriters and with
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such registration or
qualification; 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 Shares, in any
jurisdiction where it is not now so subject.
(g) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(h) During the period of five years after the date of this
Underwriting Agreement, the Company will (i) make generally available a copy of
each report of the Company mailed to stockholders or filed with the Commission
or the Nasdaq National Market and will promptly notify the Underwriters of such
mailing or filing and (ii) furnish to the Underwriters from time to time such
other information concerning the Company and its subsidiaries as the
Underwriters may request.
(i) If this Underwriting Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than by
notice given by the Underwriters terminating this Underwriting Agreement
pursuant to Section 10 or Section 11 hereof) or if this Underwriting Agreement
shall be terminated by the Underwriters 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 Underwriting Agreement, the Company agrees to negotiate in good faith
regarding the reimbursement to the Underwriters for out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
(k) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
the Underwriters of the time and manner of such filing.
(l) The Company will use its best efforts to have the Shares
listed, subject to notice of issuance, on the Nasdaq National Market as of the
Closing Date.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
<PAGE>
(a) The Registration Statement in the form in which it became
or becomes effective and also in such form as it may be when any post-effective
amendment thereto has or shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule 424(b)
under the Act, complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by an Underwriter expressly for use therein.
(b) Neither the Company nor any of the Acquired Companies has
sustained since December 31, 1998 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 Prospectus; and,
since the respective dates as of which information is given in the Prospectus,
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",
which term shall be deemed to include all of the Acquired Companies and each of
their material subsidiaries for purposes of this Section 6) 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, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(c) (i) Each of the Subsidiaries that is a partnership 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
Prospectus, 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
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"); 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 Prospectus, 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.
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Underwriting Agreement and to consummate the transactions contemplated hereby
and thereby, including, without limitation, the corporate power and authority to
issue, sell and deliver the Shares as provided herein.
<PAGE>
(e) The Underwriting Agreement has been duly and validly
authorized, executed and delivered by the Company and is the legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except insofar as indemnification and contribution provisions
may be limited by applicable law or public policy or equitable principles and
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
(f) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectus.
(g) Each of the Company's Subsidiaries has the ownership or
authorized capitalizations, as the case may be, as set forth in the Prospectus,
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 Prospectus as being
owned directly or indirectly by the Company and all of the issued shares of
capital stock of the Subsidiaries that are corporations disclosed in the
Prospectus as being owned directly or indirectly by the Company 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 Prospectus); and descriptions of the
ownership of the various interests and shares of the Company and its
Subsidiaries in the Prospectus are true and complete in all material respects;
(h) Except as disclosed, contemplated or referenced in the
Prospectus, there are not currently, and will not be as a result of the
transactions contemplated hereby, any material outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or other
equity interest of the Company or any Subsidiary.
(i) Other than as set forth in the Prospectus (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 Prospectus that would be required to be disclosed in the
Prospectus or the Registration Statement; (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 knowledge, after due inquiry, there is no reasonable
basis for any such action, suit, proceeding or investigation.
<PAGE>
(j) Except for matters covered by paragraph (w) 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 Prospectus, 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.
(k) (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 Prospectus; 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 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.
(l) 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
<PAGE>
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.
(m) 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.
(n) (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.
(o) Neither the execution and delivery of this Underwriting
Agreement, nor the consummation of the transactions contemplated hereby and
thereby or by the Prospectus under "Use of Proceeds," nor compliance with the
terms, conditions and provisions hereof and 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.
(p) Neither the execution and delivery of this Underwriting
Agreement, nor the consummation of the transactions contemplated hereby or
thereby nor compliance with the terms, conditions and provisions hereof and
thereof by the Company, requires any license, permit, franchise, certificate,
consent, authorization, designation, declaration, filing, registration or
qualification by or with the FCC.
(q) None of the Company or the Subsidiaries is and, after
giving effect to the transactions contemplated hereby will be (A) in violation
of its charter, bylaws, partnership agreement or operating agreement, as
applicable, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties is subject,
or (C) in violation of any local, state or Federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary or any of their respective
assets or properties (whether owned or leased) other than, in the case of
clauses (B) and (C), any default or violation that could not reasonably be
expected to have a Material Adverse Effect. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under any
such document or instrument that could reasonably be expected to have a Material
Adverse Effect.
<PAGE>
(r) Neither the issuance and sale of the Shares, the
execution, delivery or performance by the Company of this Underwriting Agreement
by the Company, or the consummation by the Company of the transactions
contemplated hereby and thereby violate, conflict with or constitute a breach of
any of the terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default), or require
consent under, or result in the imposition of a lien or encumbrance on any
properties of the Company or any Subsidiary or an acceleration of any
indebtedness of the Company, any Subsidiary pursuant to, (i) the charter or
bylaws of the Company or any Subsidiary or the partnership agreement or
operating agreement governing any of their material joint ventures, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company, any Subsidiary or any of their material joint
ventures is a party or by which any of them or their property is or may be
bound, (iii) any local, state or Federal law, statute, ordinance, rule,
regulation or requirement (including, without limitation, the Communications Act
and the rules and regulations of the FCC and environmental laws, statutes,
ordinances, rules or regulations) applicable to the Company, any Subsidiary, any
of their material joint ventures or any of their respective assets or properties
or (iv) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, the Subsidiaries, any of their
material joint ventures or any of their assets or properties, except in the case
of clauses (ii), (iii) and (iv) for such violations conflicts, breaches,
defaults, consents, impositions of liens or accelerations that would not singly,
or in the aggregate, have a Material Adverse Effect. Other than as described in
the Prospectus, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (A) any court or
governmental agency, body or administrative agency (including, without
limitation, the FCC) or (B) any other person is required for (1) the execution,
delivery and performance by the Company of this Underwriting Agreement or (2)
the issuance and sale of the Shares and the transactions contemplated hereby and
thereby, except (x) such as have been obtained and made under the Act and state
securities or Blue Sky laws and regulations or such as may be required by the
NASD or (y) where the failure to obtain any such consent, approval,
authorization or order of, or filing registration, qualification, license or
permit would not reasonably be expected to result in a Material Adverse Effect.
(s) The accountants who have certified or shall certify the
financial statements included in the Registration Statement and the Prospectus
are independent public accountants as required by the Act. The historical
financial statements of the Company and each of the Subsidiaries comply as to
form in all material respects with the requirements applicable to registration
statements on Form S-3 under the Act and present fairly in all material respects
the financial position and results of operations of the Company and each of its
Subsidiaries, at the respective dates and for the respective periods indicated.
Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods presented. The other financial information and data included in the
Registration Statement and Prospectus, historical and pro forma, are accurately
presented in all material respects and prepared on a basis consistent with the
financial statements, historical and pro forma, included in the Prospectus and
the books and records of the Company and each of its Subsidiaries. The
statistical information and data included in the Prospectus are accurately
presented in all material respects.
(t) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus, present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
<PAGE>
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectus are accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
(u) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act.
(v) There is (i) no unfair labor practice complaint pending
against the Company or any Subsidiary or threatened, before the National Labor
Relations Board, any state or local labor relations board or any foreign labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending or threatened against the Company or any Subsidiary, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company or any
Subsidiary or threatened against the Company or any Subsidiary and (iii) no
union representation question existing with respect to the employees of the
Company or any Subsidiary that, in the case of clauses (i), (ii) or (iii), could
reasonably be expected to result in a Material Adverse Effect. To the best of
the Company's knowledge, no collective bargaining organizing activities are
taking place with respect to the Company or the Subsidiaries. None of the
Company or any Subsidiary has violated (A) any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations thereunder, which in the case of clause (A), (B) or (C) above could
reasonably be expected to result in a Material Adverse Effect.
(w) None of the Company or any Subsidiary has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other approval
required of it under applicable Environmental Laws is violating any term or
condition of such permit, license or approval which could reasonably be expected
to, either individually or in the aggregate, have a Material Adverse Effect.
(x) Each of the Company and the Subsidiaries has (i) good and
marketable title to all of the properties and assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Prospectus or as would not
have a Material Adverse Effect and (ii) peaceful and undisturbed possession
under all leases to which any of them is a party as lessee. All leases to which
the Company and the Subsidiaries are a party are valid and binding and no
default by the Company or any Subsidiary has occurred and is continuing
thereunder and no defaults by the landlord are existing under any such lease
that could reasonably be expected to result in a Material Adverse Effect.
(y) Each of the Company and the Subsidiaries owns, possesses
or has the right to employ all patents, patent rights, licenses (including all
FCC, state, local or other jurisdictional regulatory licenses), inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and information (collectively, the "Intellectual
Property") presently employed by the Company and its Subsidiaries in connection
with the businesses now operated by it or which are proposed to be operated by
the Company or its Subsidiaries free and clear of and without violating any
right, claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person and none of the Company and
any Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing except as
<PAGE>
described in the Prospectus as could not reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property in connection with
the business and operations of the Company and the Subsidiaries does not
infringe on the rights of any person, except as would not have a Material
Adverse Effect.
(z) None of the Company, any Subsidiary, or any of their
respective officers, directors, partners, employees, agents or affiliates or any
other person acting on behalf of the Company or any Subsidiary, as the case may
be, has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer, supplier, employee or agent of a customer
or supplier, official or employee of any governmental agency (domestic or
foreign), instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other person
who was, is or may be in a position to help or hinder the business of the
Company or any Subsidiary (or assist the Company or any Subsidiary in connection
with any actual or proposed transaction) which (i) might subject the Company or
any Subsidiary, or any other individual or entity to any damage or penalty in
any civil, criminal or governmental litigation or proceeding (domestic or
foreign), (ii) if not given in the past, could reasonably be expected to have
had a Material Adverse Effect on the assets, business or operations of the
Company or any Subsidiary or (iii) if not continued in the future, could
reasonably be expected to have a Material Adverse Effect.
(aa) All tax returns required to be filed by the Company and
each of the Subsidiaries in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest. There are no proposed additional tax assessments against the
Company, any Subsidiary, or the assets or property of the Company or any
Subsidiary.
(bb) None of the Company or the Subsidiaries is now, and after
sale of the Shares to be sold by the Company and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be (i) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"), or (ii) a "registered holding
company" or a "subsidiary company" or an "affiliate" of a registered holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended (the "PUC Act").
(cc) Except as disclosed in the Prospectus, there are no
holders of securities of the Company or the Subsidiaries who, by reason of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Underwriting Agreement, have the right to request or demand
that the Company, any of the Subsidiaries or any of their joint ventures
register any of its securities (including, without limitation, Class A Common
Stock and Class B Common Stock) under the Act. Except as described in the
Prospectus, no such rights with respect to any shares of Class A Common Stock
have been exercised as of the date hereof.
(dd) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
<PAGE>
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(ee) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance. All such insurance is outstanding and duly in force on the date
hereof.
(ff) None of the Company or any of the Subsidiaries has (i)
taken, 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
any security of the Company to facilitate the sale or resale of the Shares, (ii)
since the date of the Prospectus, (A) sold, bid for, purchased or paid any
person any compensation for soliciting purchases of the Common Stock or (B) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(gg) The execution and delivery of this Underwriting Agreement
and the issuance and sale of the Shares will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended.
(hh) None of (A) the execution, delivery and performance of
this Underwriting Agreement, (B) the issuance and sale of the Shares, (C) the
application of the proceeds from the issuance and sale of the Shares or (D) the
consummation of the transactions contemplated in connection with any of the
foregoing as set forth in the Prospectus, will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations.
(ii) Except pursuant to this Underwriting Agreement, there are
no contracts, agreements or understandings between the Company, any of its
Subsidiaries or any of their joint ventures and any other person that would give
rise to a valid claim against the Company or any of the Underwriters for a
brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Shares.
(jj) During the past twenty-four months, the Company has filed
in a timely manner each document or report required to be filed by it pursuant
to the Exchange Act and the rules and regulations thereunder; each such document
or report at the time it was filed conformed to the requirements of the Exchange
Act and the rules and regulations thereunder; and none or such documents or
reports contained an untrue statement of any material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(kk) Each of the Company and the Subsidiaries has complied
with all provisions of Section 517.075, Florida Statutes, relating to doing
business with the Government of Cuba or with any affiliate located in Cuba.
(ll) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be disclosed
therein pursuant to Item 404 of Regulation S-K of the Commission.
<PAGE>
(mm) The representations and warranties of the Company in the
Company's Senior Notes Underwriting Agreement, dated as of April 23, 1999, are
true and correct in all material respects as of the date hereof and the Closing
Date.
The Company acknowledges that the Underwriters and, for
purposes of the opinions to be delivered to the Underwriters pursuant to Section
8(e), (f), (g) and (k) hereof, counsel to the Company and counsel to the
Underwriters, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement in any amendment thereof,
or in the Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified
party, as incurred, 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 Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise have.
The Company acknowledges that the statements under the heading "Underwriting" or
"Plan of Distribution", (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Prospectus constitute
the only information furnished in writing by or on behalf of the Underwriters
for inclusion in any Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
<PAGE>
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Shares;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Shares) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Shares purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 7, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
<PAGE>
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the following
conditions:
(a) All of the representations and warranties of the Company
contained in this Underwriting Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
(b) If, at the time this Underwriting Agreement is executed
and delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto (including pursuant to Rule 462(b)) to be
declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 424 and 430A under the
Act shall have been timely made; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or the
Underwriters, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Underwriters'
satisfaction.
(c) Subsequent to the effective date of this Underwriting
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, that would have a Material Adverse Effect on the
Company and the Subsidiaries, taken as a whole, not contemplated by the
Prospectus, which in the Underwriters' opinion, would materially adversely
affect the market for the Shares, or (ii) any event or development relating to
or involving the Company, the Subsidiaries, or any officer or director of the
Company or the Subsidiaries which makes any statement made in the Prospectus
untrue or which, in the opinion of the Company and its counsel or the
Underwriters and its counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in the Underwriters' opinion, materially
adversely affect the market for the Shares.
(d) The Underwriters shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by any two officers (for the
purpose of this subsection (d) "officer" shall mean the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or Assistant Secretary) in form and substance reasonably
satisfactory to the Underwriters, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), and (c) of this Section 8, certain
incumbency matters and that, as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed.
(e) The Underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Buchanan Ingersoll Professional Corporation, counsel for the
Company, to the effect that:
<PAGE>
(i) 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
Prospectus.
(ii) This Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
(iii) All of the outstanding shares of capital stock
of the Company have been duly authorized, validly issued, and are fully
paid and nonassessable and were not issued in violation of any
preemptive or similar rights. The outstanding shares of capital stock
of the Company, as of December 31, 1998, are as set forth in the
Prospectus under the caption "Capitalization." The authorized capital
stock of the Company conforms in all material respects as to legal
matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock."
(iv) The Shares to be issued and sold to the
Underwriters by the Company under this Underwriting Agreement have been
duly authorized and when issued and delivered to the Underwriters
against payment therefor in accordance with the terms of this
Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any (A) preemptive rights or (B) to the best
knowledge of such counsel after reasonable inquiry, similar rights that
entitle or will entitle any person to acquire any Class A Common Stock
upon the issuance thereof by the Company, other than as described in
the Prospectus.
(v) The form of certificates for the Shares conforms
to the requirements of the Nasdaq National Market and the Delaware
General Corporation Law.
(vi) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act
and, to the best knowledge of such counsel after reasonable inquiry, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose are pending before
or contemplated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b).
(vii) The Company has the corporate power and
authority to enter into this Underwriting Agreement and to issue, sell
and deliver the Shares as provided therein, and this Underwriting
Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that (A) such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium (whether general or
specific) or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally, (B) such enforceability may
be limited by the effects of general principles of equity and by the
discretion of the court before which any proceeding therefor may be
brought (whether such proceeding is at law or in equity or in a
bankruptcy proceeding) and (C) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or public policy and (D)
waivers as to usury, stay or extension laws may be unenforceable.
(viii) The Registration Statement and the Prospectus,
as of their dates (except for the financial statements, including the
notes thereto, and supporting schedules and other financial,
statistical and accounting data included therein or omitted therefrom,
<PAGE>
as to which no opinion is expressed), and each amendment or supplement
thereto, as of its date, comply as to form in all material respects
with the Act.
(ix) Neither the issuance, sale or delivery of the
Shares, nor the execution, delivery or performance of this Underwriting
Agreement, or compliance by the Company with all provisions of this
Underwriting Agreement, nor consummation by the Company of the
transactions contemplated hereby violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or
any subsidiary, or an acceleration of any indebtedness of the Company
or any subsidiary pursuant to, (i) the charter or bylaws of the Company
or (ii) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or its assets
or properties known to such counsel, except in the case of clause (ii)
for such violations, conflicts, breaches, defaults, consents,
impositions of liens or accelerations that (x) would not, singly or in
the aggregate, have a Material Adverse Effect or (y) are disclosed in
the Prospectus.
(x) None of the Company, its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act or (ii) a
"registered holding company" or a "subsidiary company" or an
"affiliate" of a registered holding company within the meaning of the
PUC Act.
(xi) Except as set forth in the Prospectus, there are
no holders of securities of the Company who, by reason of the execution
by the Company of this Underwriting Agreement or the consummation by
the Company of the transactions contemplated thereby, have the right to
request or demand that the Company register under the Act securities
held by them.
(xii) None of (A) the execution, delivery and
performance of this Underwriting Agreement or (B) the issuance and sale
of the Shares and the application of the proceeds from the issuance and
sale of the Shares will violate Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
(xiii) To the knowledge of such counsel, there is (i)
no action, suit, investigation or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic or
foreign, now pending, or threatened or contemplated to which any of the
Company or any subsidiary is or may be a party or to which the business
or property of any of the Company or any subsidiary is or may be
subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency, or (iii) no
injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction to which any of the Company or
any subsidiary is or may be subject that has been issued that, in the
case of clauses (i), (ii) and (iii) above, (x) is required to be
disclosed in the Prospectus and that is not so disclosed and, (y) could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, it being understood that for
purposes of this opinion, such counsel need express no opinion with
respect to (i) actions, suits investigation or proceedings before the
FCC or any similar state or local regulatory commission or body, (ii)
statutes, rules, regulations or orders by any FCC or any similar state
or local regulatory commission or (iii) injunctions, restraining orders
or other orders by the FCC or any similar state or local regulatory
commission or body.
<PAGE>
(xiv) The statements set forth in the Prospectus
under the caption "Risk Factors -- Shares Eligible for Future Sale,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Financing Transactions," insofar as they
purport to describe the Company's Capital Stock or the debt instruments
referred to therein are, when taken together with the other information
included in the Prospectus, accurate in all material respects.
In addition, such counsel shall also state that, during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with officers and other representatives of
the Company, representatives of the certified public accountants of the Company,
the Underwriter's representatives and the Underwriters' counsel, at which
conferences the contents of the Registration Statement and the Prospectus
(including the documents incorporated by reference in the Prospectus) and
related matters were generally discussed and, although such counsel has not
undertaken, except as otherwise indicated in our opinion, to determine
independently, and such counsel is not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus has not made an
independent investigation of facts for the purpose of rendering this opinion,
such counsel advises the Underwriters that, on the basis of the foregoing
(relying as to materiality to the extent we deemed appropriate upon the
statements of officers and other representatives of the Company), no facts have
come to our attention which lead us to believe that the Registration Statement
at the time it became effective, or the Prospectus, as of their respective dates
and as of the Closing Date, in each case including the documents incorporated by
reference in the Prospectus, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated in the Prospectus or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such counsel expresses no opinion as to
financial statements (including the schedules and notes thereto) or any other
financial or statistical data or calculations directly or indirectly contained
or referenced to in, or related to, or omitted from, the Prospectus.
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, the
Commonwealth of Pennsylvania and the federal laws of the United States.
(f) The underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Randall D. Fisher, Esq., General Counsel of the Company, to the
effect that:
(i) Except as set forth in the Prospectus, 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 Underwriters 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;
(ii) 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
<PAGE>
subdivisions relating thereto, and the rules and regulations
promulgated therewith.
(iii) 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 this Underwriting Agreement where the
failure to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would have a Material Adverse Effect.
(iv) 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.
(v) The statements in the Prospectus under the
headings "Risk Factors -- Regulation in the Telecommunications
Industry," "Risk Factors -- Extensive Regulation" and "Risk Factors --
Competition," insofar as they relate to the Company and its
Subsidiaries operations in each of New York, Virginia, Pennsylvania,
Ohio, New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects.
(vi) Neither the execution and delivery of this
Underwriting Agreement nor the offering of the Shares contemplated
hereby or 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 on the Company and its subsidiaries.
(g) The Underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Colin H. Higgin, Deputy General Counsel of the Company, to the
effect that:
(i) 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.
(ii) 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
<PAGE>
that such counsel shall state that he believes that both the
Underwriters and he are justified in relying upon such opinions and
certificates).
(iii) 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 Prospectus) (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
Underwriters and he are justified in relying upon such opinions and
certificates).
(iv) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, 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, shareholder's equity, partners'
equity, or results of operations of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(v) Neither the issuance and sale of the Shares, the
execution, delivery or performance by the Company of this Underwriting
Agreement, or the consummation by the Company of the transactions
herein and therein contemplated will, 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.
(vi) 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, the
execution, delivery or performance by the Company of this Underwriting
Agreement or the consummation by the Company of the transactions
contemplated herein or therein, 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 Shares by the Underwriters.
(vii) Except as described in the Prospectus or in
this Underwriting Agreement, all of the outstanding capital stock of
each subsidiary is owned by the Company, free and clear of any security
interest, claim, lien, limitation on voting rights or encumbrance
(other than liens to secure indebtedness under credit facilities
disclosed in the Prospectus). There are not, to my knowledge, other
than as set forth, contemplated or referenced in the Prospectus,
<PAGE>
currently, and will not be immediately following the issuance and sale
of the Shares, any material outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or
other equity interest of the Company or any subsidiary.
(viii) The Consummation of the transactions
contemplated in connection with any of the foregoing as set forth in
the Prospectus, will not violate Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
In addition, such counsel shall also state that,
although we have not undertaken, except as otherwise indicated in our
opinion, to determine independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
statements in the Registration Statement, we have participated in the
preparation of the Registration Statement and the Prospectus, including
general review and discussion of the contents thereof but have made no
independent check or verification thereof, and no facts have come to
our attention that would lead us to believe that the Registration
Statement at the time the Registration Statement became effective, or
the Prospectus, as of their respective dates and as of the Closing
Date, in each case including the documents incorporated by reference in
the Prospectus, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
in the Prospectus or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
or that any amendment or supplement to the Prospectus, as of their
respective dates, and as of the Closing Date, as the case may be,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated in the Prospectus or necessary in
order to make the statements in the Prospectus, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements, schedules, pro forma financial statements and
the notes thereto and other financial data included in the Registration
Statement and the Prospectus).
(h) The Underwriters shall have received on the Closing Date,
an opinion of Fleischman & Walsh, L.L.P., special regulatory counsel for the
Company and its subsidiaries, dated the Closing Date, in form and substance
satisfactory to the Underwriters, of, to the effect that:
(i) 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.
(ii) 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
<PAGE>
License is defined as an authorization, or renewal thereof, issued by
the FCC authorizing the transmission of radio energy through the
airways.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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. 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.
(vii) 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.
(viii) 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
this Underwriting 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.
<PAGE>
(ix) Neither the execution and delivery of the this
Underwriting Agreement nor the offering of the Class A common stock
contemplated thereby 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 the Underwriters'
attention to the following.
(x) 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 the Underwriters 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.
(xi) 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 this Underwriting Agreement and/or
related financing documents purport to grant to the Underwriters a
security interest in any FCC licenses, such security interest may not
be legally enforceable.
(xii) 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.
(xiii) In our opinion, the Statements in the
Prospectus under the headings "Risk Factors -- Regulation in the
Telecommunications Industry," "Risk Factors -- Extensive Regulation"
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.
(i) The Underwriters shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
of Latham & Watkins, counsel to the Underwriters, covering such matters as are
customarily covered in such opinions.
(j) The Company shall have furnished to the Underwriters a
letter from each of Deloitte & Touche LLP and KPMG LLP, addressed to the
Underwriters and dated the Closing Date covering the matters previously
requested by Latham & Watkins, in form and substance satisfactory to Salomon
Smith Barney Inc. and their counsel in their sole discretion.
(k) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock 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 contemplated in the
Registration Statement or the Prospectus; (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as may otherwise be stated in the
Registration Statement and, any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the subsidiaries taken as a whole; (iv) there
shall not have been any announcement by either Moody's Investors Service, Inc.
or Standard & Poor's that (a) it is downgrading its rating assigned to any class
of securities of the Company or any of its subsidiaries, or (b) it is reviewing
its ratings assigned to any class of securities of the Company or any of its
<PAGE>
subsidiaries with a view to possible downgrading, or with negative implications
and (v) the Company and the 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 the subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus.
(l) The Company shall not have failed at or prior to the
Closing Date to have performed or complied 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.
(m) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(n) The Shares shall have been listed or approved for listing
upon notice of issuance on the Nasdaq National Market.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters and the Underwriters' counsel.
Any certificate or document signed by any officer of the
Company and delivered to the Underwriters or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company to the Underwriters
as to the statements made therein.
9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, 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 Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this
Underwriting Agreement, the Blue Sky Memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the registration of the Class A Common Stock under the
Exchange Act and the listing of the Shares on the Nasdaq National Market; (vi)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the Blue Sky Memorandum and such registration and qualification);
(vii) the filing fees and the fees and expenses of counsel for the Underwriters
in connection with any filings required to be made with the National Association
of Securities Dealers, Inc.; (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
<PAGE>
10. Effective Date of Agreement. This Underwriting Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Underwriting Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares may
commence, when notification of the effectiveness of the Registration Statement
or such post-effective amendment has been released by the Commission. Until such
time as this Underwriting Agreement shall have become effective, it may be
terminated by the Company, by notifying the Underwriters, or by the
Underwriters, by notifying the Company.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Underwriting Agreement shall be
subject to termination in the Underwriters' absolute discretion, without
liability on the part of the Underwriters to the Company, by notice to the
Company, if prior to the Closing Date (if different from the Closing Date, as
the case may be, (i) trading in securities of the Company on the Nasdaq National
Market or 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 or Philadelphia shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic 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
Underwriters' judgment, impracticable or inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the statements in the fifth, sixth, seventh and eighth paragraphs under the
caption "Underwriting" in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 6(a) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Underwriting Agreement
shall be in writing and shall be delivered (i) if to the Company, at the office
of the Company at Adelphia Communications Corporation, Main at Water Street,
Coudersport, Pennsylvania 16915, Attention: Chief Financial Officer; or (ii) if
to the Underwriters, care of Salomon Smith Barney Inc., 388 Greenwich Street,
New York, New York 10013, Attention: Registration Department.
This Underwriting Agreement has been and is made solely for
the benefit of the Underwriters, the Company, its directors and officers, and
the other controlling persons referred to in Section 7 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 Underwriting
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Underwriting Agreement shall include a purchaser from the
Underwriters of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Underwriting 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.
<PAGE>
This Underwriting Agreement may be signed in various
counterparts which together constitute one and the same instrument. If signed in
counterparts, this Underwriting Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of
each party hereto.
[signature pages follow]
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James Brown
Name: James Brown
Title: Vice-President
Confirmed as of the date first above mentioned.
SALOMON SMITH BARNEY INC.
on behalf of itself and the other
Underwriters listed on Schedule I hereto
By /s/Christopher Clipper
Name: Christopher Clipper
Title:Vice-President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE i
Number of Additional Shares to be
Purchased if Maximum Option is
Name of Underwriter Total Number of Firm Shares Excercised
------------------- --------------------------- ----------
<S> <C> <C>
Salomon Smith Barney Inc. --------------- ---------------
Goldman, Sachs & Co. --------------- ---------------
Credit Suisse First Boston Corporation --------------- ---------------
Donaldson, Lufkin & Jenrette Securities Corporation --------------- ---------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated --------------- ---------------
Morgan Stanley & Co. Incorporated --------------- ---------------
Credit Lyonnais Securities (USA) Inc. --------------- ---------------
NationsBanc Montgomery Securities LLC --------------- ---------------
SG Cowen Securities Corporation --------------- ---------------
Total __________ __________
</TABLE>
Exhibt 1.02
ADELPHIA COMMUNICATIONS CORPORATION
$350,000,000
7-7/8% Senior Notes due 2009
UNDERWRITING AGREEMENT
April 23, 1999
CHASE SECURITIES INC.
SALOMON SMITH BARNEY INC.
SCOTIA CAPITAL MARKETS (USA) INC.
TD SECURITIES (USA) INC.
BARCLAYS CAPITAL, INC.
FLEET SECURITIES, INC.
NESBITT BURNS Securities Inc.
PNC CAPITAL MARKETS, INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation
(the "Company"), may issue and sell from time to time a series of its debt
securities registered under the registration statement referred to in Section
1(a) hereof. The Company proposes to sell to Chase Securities Inc. ("CSI") and
Salomon Smith Barney Inc., Scotia Capital Markets (USA) Inc., TD Securities
(USA) Inc., PNC Capital Markets, Inc., Barclays Capital, Inc., Fleet Securities,
Inc. and Nesbitt Burns (together with CSI, the "Underwriters") $350,000,000 in
aggregate principal amount of its 7-7/8% Senior Notes due 2009 (collectively,
the "Securities" and, individually, a "Security"). The Securities will be issued
pursuant to an Indenture to be dated as of April 28, 1999 (the "Base Indenture")
as supplemented by a First Supplemental Indenture (the "Supplemental Indenture"
and, together with the Base Indenture, the "Indenture") between the Company and
Bank of Montreal Trust Company, as trustee (the "Trustee"). The form of the
Supplemental Indenture will be filed on Form 8-K and incorporated by reference
as an exhibit to the registration statement referred to below. The Company
recently announced the following pending acquisitions: Olympus Communications,
L.P., FrontierVision Partners, L.P., Harron Communications Corp. and Century
Communications Corp. (collectively, the "Acquired Companies"). With respect to
the representations, warranties and agreements made by the Company in this
Agreement concerning the Acquired Companies, such representations, warranties
and agreements shall be limited to the knowledge of the Company in all cases.
<PAGE>
1. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to, and agrees with, the several
Underwriters on and as of the date hereof and the Closing Date (as defined in
Section 3) that:
(a) A registration statement (No. 333-74219), including a
prospectus, with respect to the Securities have been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder and have become effective. Copies of such
registration statement have been delivered by the Company to you as the
Underwriters. As used in this Agreement, (i) "Registration Statement"
means each such registration statement, as amended and supplemented to
the date hereof; (ii) "Preliminary Prospectus" means each prospectus
(including all documents incorporated therein by reference or deemed to
be incorporated by reference therein) included in the Registration
Statement, or amendments or supplements thereof, before it became
effective under the Securities Act, including any prospectus filed with
the Commission pursuant to Rule 424(a) of the Rules and Regulations;
(iii) "Basic Prospectus" means the prospectus included in the
Registration Statement; and (iv) "Prospectus" means the Basic
Prospectus, together with any prospectus amendment or supplement
(including in each case all documents incorporated therein by reference
(the "Incorporated Documents")) specifically relating to the
Securities, as filed with the Commission pursuant to paragraph (b) of
Rule 424 of the Rules and Regulations. The Commission has not issued
any order preventing or suspending the use of any Prospectus, and no
proceedings for such purposes have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
(b) The Registration Statement and the Prospectus contain, and
(in the case of any amendment or supplement to any such document, or
any material incorporated by reference in any such document, filed with
the Commission after the date as of which this representation is being
made) will contain at all times during the period specified in
Paragraph 4(c) hereof, all statements which are required by the
Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
under such Acts; the Indenture, with any amendments and supplements
thereto will conform, with the requirements of the Trust Indenture Act
and the rules and regulations of the Commission thereunder; and the
Registration Statement, the Prospectus and the Incorporated Documents
do not, and (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not, at any time during the period
specified in Paragraph 4(c) hereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that the Company makes no representation or warranty as to
information contained in or omitted from any Registration Statement or
any Prospectus in reliance and based upon information furnished to the
Company by or on behalf of any Underwriter, or as to any statements in
or omissions from the Statement of Eligibility of the Trustee under the
Indenture.
<PAGE>
(c) Neither the Company nor any of the Acquired Companies has
sustained since December 31, 1998 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 Prospectus; and, since the respective dates as of
which information is given in the Prospectus, 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) or
long-term debt of the Company or any of its material subsidiaries (the
"Subsidiaries", which term shall be deemed to include all of the
Acquired Companies and each of their material subsidiaries for purposes
of this Section 1) 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 or any of the Acquired Companies and their subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(d) 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 Prospectus 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;"
(e) (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 Prospectus, 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
Prospectus, 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
<PAGE>
so qualify would not have a Material Adverse Effect;
(f) Each of the Company and its Subsidiaries has the ownership
or authorized capitalizations, as the case may be, as set forth in the
Prospectus, 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 Prospectus as being owned directly or
indirectly by the Company and all of the issued shares of capital stock
of the Subsidiaries that are corporations disclosed in the Prospectus
as being owned directly or indirectly by the Company 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 Prospectus); and
ownership of the various interests and shares of the Company and its
Subsidiaries is as described in the Prospectus;
(g) The Securities 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 under which they are to be issued, which will
be substantially in the form previously delivered to the Underwriters;
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 Securities and the Indenture will
conform to the descriptions thereof in the Prospectus and will be in
substantially the form previously delivered to the Underwriters;
(h) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations U and X of the Board of
Governors of the Federal Reserve System;
(i) Prior to the date hereof, none of the Company or any of
their affiliates (other than the Underwriters 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;
(j) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
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
<PAGE>
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 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 or the consummation by the
Company of the transactions contemplated by this Agreement or the
Indenture, other than 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 Securities by the Underwriters;
(k) 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;
(l) The statements set forth in the Prospectus under the
caption "Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Securities, and incorporated
by reference in the Prospectus from the Form 10-K and Forms 10-Q (each
as defined in the Prospectus) under the captions "Business" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," as applicable, 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;
(m) None of the Company or its Subsidiaries is or, after
giving effect to the offering and sale of the Securities, 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");
(n) None of the Company, its Subsidiaries or any of their
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;
(o) Other than as set forth in the Prospectus (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
<PAGE>
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 Prospectus that would be
required to be disclosed in a public offering registered under the
Securities 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 knowledge, after due inquiry, there
is no reasonable basis for any such action, suit, proceeding or
investigation;
(p) Each of Deloitte & Touche LLP, who has reported on the
financial statements of the Company and some of the Acquired Companies,
and KPMG LLP, who has reported on the financial statements of some of
the Acquired Companies, is an independent public accountant as required
by the Securities Act and the rules and regulations of the Commission
thereunder;
(q) This Agreement has been duly authorized, executed and
delivered by the Company;
(r) Except for matters covered by paragraph (v) 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 Prospectus, 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
<PAGE>
contest renewal of any material Authorization;
(s) (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 Prospectus; 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 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;
(t) 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 ("EEOC") compliance certification by the FCC has been
certified by the FCC for annual EEOC 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;
(u) 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;
(v) (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
<PAGE>
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;
(w) Neither the execution and delivery of this Agreement or
the Indenture, nor the consummation of the transactions contemplated
hereby and thereby or by the Prospectus 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;
(x) Neither the execution and delivery of this Agreement or
the Indenture, nor the execution, delivery, offer, issuance and sale of
the Securities, 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
(y) The representations and warranties of the Company in the
Company's Class A Common Stock Underwriting Agreement, dated as of
April 23, 1999, are true and correct in all material respects as of the
date hereof and the Closing Date.
2. Purchase of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company,
the principal amount of Securities set forth opposite the name of such
Underwriter on Schedule 1 hereto at a purchase price equal to 98.5% of the
principal amount thereof.
The Company shall not be obligated to deliver any of the
Securities except upon payment for all of the Securities to be purchased as
provided herein. The Company acknowledges and agrees that the Underwriters may
sell Securities to any affiliate of an Underwriter and that any such affiliate
may sell Securities purchased by it to an Underwriter.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of Latham &
Watkins, New York, New York, or at such other place as shall be agreed
upon by the Underwriters and the Company, at 10:00 A.M., New York City
time, on April 28, 1999, or at such other time or date, not later than
seven full business days thereafter, as shall be agreed upon by the
Underwriters and the Company (such date and time of payment and
delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by certified or official bank
check or checks drawn in New York Clearing House funds or similar
next-day funds, or by such other means as the parties hereto shall
agree prior to the Closing Date, against delivery to the Underwriters
of the certificates evidencing the Securities. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
<PAGE>
Agreement is a further condition of the obligations of the Underwriters
hereunder. Upon delivery, the Securities shall be in global form,
registered in such names and in such denominations as CSI on behalf of
the Underwriters shall have requested in writing not less than two full
business days prior to the Closing Date. The Company agrees to make one
or more global certificates evidencing the Securities available for
inspection by CSI on behalf of the Underwriters in New York, New York
at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with
each of the several Underwriters:
(a) To furnish promptly to the Underwriters and to counsel for
the Underwriters a conformed copy of each Registration Statement as
originally filed and each amendment or supplement thereto filed prior
to the date hereof or relating to or covering the Securities, and a
copy of each Prospectus filed with the Commission, including all
documents incorporated therein by reference and all consents and
exhibits filed therewith and to file with the Commission pursuant to
Rule 424 a prospectus supplement, in form and substance satisfactory to
CSI and its counsel, relating to the offering contemplated hereby no
later than the close of business on April 26, 1999;
(b) To deliver promptly to the Underwriters such reasonable
number of the following documents as the Underwriters may request: (i)
conformed copies of the Registration Statement (excluding exhibits
other than the computation of the ratio of earnings to fixed charges,
the Indenture and this Agreement), (ii) the Prospectus and (iii) any
documents incorporated by reference in the Prospectus;
(c) During such period following the date hereof as, in the
opinion of counsel for the Underwriters, the Prospectus is required by
law to be delivered, to comply with the Securities Act, the Exchange
Act, the Trust Indenture Act and the rules and regulations under each
thereof, so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the Securities Act or the Rules and Regulations, the Company will
promptly prepare and file with the Commission, subject to paragraph (d)
below, such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request;
(d) Prior to filing with the Commission during the period
referred to in (c) above (i) any amendment to the Registration
Statement, (ii) the Prospectus or any amendment thereto, (iii) the
<PAGE>
prospectus supplement utilized in connection with this offering or any
amendment or supplement thereto, or (iv) any document incorporated by
reference in any of the foregoing or any amendment or supplement to
such incorporated document, to furnish a copy thereof to the
Underwriters and to counsel for the Underwriters and not to file any
document that shall have been disapproved by the Underwriters;
(e) To advise the Underwriters promptly (i) when any
post-effective amendment to the Registration Statement relating to or
covering the Securities becomes effective or any supplement to the
Prospectus shall have been filed, (ii) of any comments from the
Commission or any request or proposed request by the Commission for an
amendment or supplement to the Registration Statement (insofar as the
amendment or supplement relates to or covers the Securities), to the
Prospectus, to any document incorporated by reference in any of the
foregoing or for any additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order directed to the Prospectus or any
document incorporated therein by reference or the initiation or threat
of any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in any Prospectus,
(iv) of receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threat of any proceeding for that
purpose and (v) of the happening of any event which makes untrue any
statement of a material fact made in the Registration Statement or the
Prospectus or which requires the making of a change in the Registration
Statement or the Prospectus in order to make any material statement
therein not misleading;
(f) If, during the period referred to in (c) above, the
Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting of that order at the earliest possible time;
(g) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a Prospectus is required in connection with the
offering and sale of the Securities;
(h) as soon as practicable to make generally available to the
Company's security holders and to deliver to the Underwriters an
earning statement of the Company and its Subsidiaries (which need not
be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(i) for so long as the Securities are outstanding, to furnish
to the Underwriters copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the
Securities pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(j) to promptly take from time to time such actions as the
Underwriters may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may designate and to continue such
<PAGE>
qualifications in effect for so long as required for the resale of the
Securities; and to arrange for the determination of the eligibility for
investment of the Securities under the laws of such jurisdictions as
the Underwriters may reasonably request; provided that the Company and
its Subsidiaries shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or
to file a general consent to service of process in any jurisdiction;
(k) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(l) in connection with the offering of the Securities, until
CSI on behalf of the Underwriters shall have notified the Company of
the completion of the distribution of the Securities, not to, and to
cause its affiliated purchasers (as defined in Regulation M under the
Exchange Act) not to, either alone or with one or more other persons,
bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to,
and to cause its affiliated purchasers not to, make bids or purchase
for the purpose of creating actual, or apparent, active trading in or
of raising the price of the Securities;
(m) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Underwriters and to cooperate
with the Underwriters and Underwriters' counsel with their due
diligence review through the Closing Date;
(n) to furnish to each of the Underwriters on the date hereof
a copy of each of the independent accountants' reports included in
Registration Statement signed by the accountants rendering such
reports;
(o) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
(p) to not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture;
(q) to not take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant to
Section 4(c); and
(r) to apply the net proceeds from the sale of the Securities
as set forth in the Prospectus under the heading "Use of Proceeds".
5. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
on and as of the date hereof and the Closing Date, of the representations and
<PAGE>
warranties of the Company contained herein, to the accuracy of the statements of
the Company and its officers made in any certificates delivered pursuant hereto,
to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus and supplement referred to in Section 4(a)
of this Agreement shall have been timely filed with the Commission in
accordance with Section 4(a) of this Agreement. Prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) The Prospectus (and any amendments or supplements thereto)
shall have been printed and copies distributed to the Underwriters as
promptly as practicable on or following the date of this Agreement or
at such other date and time as to which the Underwriters may agree.
(c) None of the Underwriters shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of this Agreement, the
Indenture and the Securities (collectively, the "Transaction
Documents") and the Prospectus, and all other legal matters relating to
the Transaction Documents and the transactions contemplated thereby,
shall be satisfactory in all material respects to the Underwriters, and
the Company shall have furnished to the Underwriters all documents and
information that they or their counsel may reasonably request to enable
them to pass upon such matters.
(e) The Underwriters 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 Underwriters,
to the effect that:
(i) 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 Prospectus;
(ii) This Agreement has been duly
authorized, executed and delivered by the Company;
(iii) The Securities 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 its terms, subject, as to enforcement, to
<PAGE>
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 Securities and the Indenture conform in
all material respects to the descriptions thereof in the
Prospectus;
(iv) The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified under
the Trust Indenture Act, assuming that the Indenture is a
valid and binding agreement of the Trustee, constitutes 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;
(v) The Registration Statement has become
effective under the Securities Act and the Prospectus
(including the prospectus supplement contemplated by Section
4(a) hereof) was filed pursuant to Rule 424(b) of the Rules
and Regulations and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued or proceeding for that purpose has been instituted
or threatened by the Commission;
(vi) The Registration Statement and the
Prospectus comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the
Securities Act, the Trust Indenture Act and the rules and
regulations of the Commission thereunder;
(vii) The issue and sale of the Securities
and the compliance by the Company with all of the provisions
of the Securities, the Indenture and this Agreement 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;
(viii) The statements set forth in the
Prospectus under the caption "Description of the Notes,"
insofar as they purport to constitute a summary of the terms
of the Securities, are accurate in all material respects, and
the statements in the Prospectus under the heading "Certain
United States Tax Considerations to Non-United States
Holders," insofar as they purport to constitute a summary of
laws, governmental rules or regulations or documents, are
accurate in all material respects;
(ix) 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; and
<PAGE>
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of the Company
and its subsidiaries, representatives of the independent public accountants for
the Company and the Underwriters at which the contents of the Registration
Statement and the Prospectus (including the Incorporated Documents) 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 Registration
Statement and the Prospectus, 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
of such counsel that lead such counsel to believe that the Registration
Statement, as of the date it was declared effective, or the Prospectus, as of
its date or as of the Closing Date, in each case including the Incorporated
Documents, 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.
(f) The Underwriters shall have received on the Closing Date
an opinion of Randall D. Fisher, Esq., General Counsel to the Company,
dated the Closing Date and addressed to the Underwriters, to the effect
that:
(i) Except as set forth in the Prospectus,
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
Underwriters 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;
(ii) 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;
(iii) 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 Underwriting Agreement where the failure
<PAGE>
to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would have a Material Adverse
Effect;
(iv) 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;
(v) The statements in the Prospectus under
the headings "Risk Factors - We are Subject to Extensive
Regulation" 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
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
(vi) Neither the execution and delivery of
the Underwriting Agreement nor the offering of the Securities
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 on the Company and its subsidiaries.
(g) The Underwriters 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 Underwriters, to the effect
that:
(i) 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;
(ii) 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
Underwriters and he are justified in relying upon such
opinions and certificates);
<PAGE>
(iii) 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 Prospectus) (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
Underwriters and he are justified in relying upon such
opinions and certificates);
(iv) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, 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, shareholder's equity, partners' equity, or
results of operations of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) The issue and sale of the Securities and
the compliance by the Company with all of the provisions of
the Securities, the Indenture and this Agreement 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; and
(vi) 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 or the consummation by the Company of
the transactions contemplated by this Agreement or the
Indenture, 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 Securities by the Underwriters.
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of the Company
and its subsidiaries, representatives of the independent public accountants for
the Company and the Underwriters at which the contents of the Registration
Statement and the Prospectus (including the Incorporated Documents) and related
matters were discussed and, although such counsel is not passing upon and does
<PAGE>
not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus, 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
of such counsel that lead such counsel to believe that the Registration
Statement, as of the date it was declared effective, or the Prospectus, as of
its date or as of the Closing Date, in each case including the Incorporated
Documents, 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).
(h) The Underwriters 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 Underwriters to the effect that:
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) The subsidiaries hold all authorizations
and/or have filed all notifications required by the FCC in
<PAGE>
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.
(vi) 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 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.
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.
(vii) 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.
(viii) 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 Underwriting 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.
(ix) Neither the execution and delivery of
the Underwriting Agreement nor the offering of the Securities
contemplated thereby 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.
(x) Under the Securities 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.
<PAGE>
(xi) Under the Securities 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 Underwriting 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.
(xii) 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.
(xiii) In our opinion, the Statements in the
Prospectus under the headings "Risk Factors - We are Subject
to Extensive Regulation" 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.
(i) The Underwriters shall have received from Latham &
Watkins, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Underwriters may
reasonably require, and the Company shall have furnished to such
counsel such documents and information as they request for the purpose
of enabling them to pass upon such matters.
(j) The Company shall have furnished to the Underwriters a
letter from each of Deloitte & Touche LLP and KPMG LLP, addressed to
the Underwriters and dated the Closing Date covering the matters
previously requested by Latham & Watkins, in form and substance
satisfactory to CSI and their counsel in their sole discretion.
(k) The Company shall have furnished to the Underwriters a
certificate, dated the Closing Date, of its chief executive officer and
its chief financial officer stating that (A) such officers have
carefully examined the Registration Statement and the Prospectus, (B)
in their opinion, the Registration Statement and the Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement and the Prospectus so that the Registration
Statement and the Prospectus (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (C) as of the Closing
Date, the representations and warranties of the Company in this
Agreement are true and correct in all material respects, the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder on or prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the best of such officer's knowledge, are
contemplated by the Commission, and subsequent to the date of the most
recent financial statements contained in the Registration Statement and
the Prospectus, there has been no material adverse change in the
financial position or results of operation of the Company or any of its
<PAGE>
subsidiaries, or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results
of operations, business or prospects of the Company and its
subsidiaries taken as a whole, except as set forth in the Prospectus.
(l) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(m) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Prospectus, such amendment or supplement shall have been prepared, the
Underwriters shall have been given a reasonable opportunity to comment
thereon, and copies thereof shall have been delivered to the
Underwriters reasonably in advance of the Closing Date.
(n) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereto) and the
Prospectus (exclusive of any supplement thereto), there shall not have
been any change in the capital stock or long-term debt or any change,
or any development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the
effect of which, in any such case described above, is, in the judgment
of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering of the
Securities on the terms and in the manner contemplated by this
Agreement and the Prospectus (exclusive of any supplement thereto).
(o) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities or preferred
stock by any "nationally recognized statistical rating organization",
as such term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such organization
shall have publicly announced that it has under surveillance or review
(other than an announcement with positive implications of a possible
upgrading), its rating of the Securities or any of the Company's other
debt securities or preferred stock.
(q) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Company on any exchange or in the
<PAGE>
over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv),
is, in the judgment of the Underwriters, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the sale or the delivery of the Securities on the terms and
in the manner contemplated by this Agreement and in the Prospectus
(exclusive of any amendment or supplement thereto).
(r) The acquisition agreements relating to each of the
Acquired Companies are still in force and effect and no actions have
been taken to terminate any of such agreements.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
6. Effectiveness and Termination. This Agreement shall become
effective upon the execution of this Agreement. The obligations of the
Underwriters hereunder may be terminated by the Underwriters, in their absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(n), (o), (p) or (q) shall have occurred and be
continuing.
7. Defaulting Underwriters. (a) If, on the Closing Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the non-defaulting Underwriters may make arrangements for the purchase of the
Securities which such defaulting Underwriter agreed but failed to purchase by
other persons satisfactory to the Company and the non-defaulting Underwriters,
but if no such arrangements are made within 36 hours after such default, this
Agreement shall terminate without liability on the part of the non-defaulting
Underwriters or the Company, except that the Company will continue to be liable
for the payment of expenses to the extent set forth in Sections 8 and 12 and
except that the provisions of Sections 9 and 10 shall not terminate and shall
remain in effect. As used in this Agreement, the term "Underwriters" includes,
for all purposes of this Agreement unless the context otherwise requires, any
party not listed in Schedule 1 hereto that, pursuant to this Section 7,
purchases Securities which a defaulting Underwriter agreed but failed to
purchase.
(b) Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or any non-defaulting
Underwriter for damages caused by its default. If other persons are obligated or
agree to purchase the Securities of a defaulting Underwriter, either the
non-defaulting Underwriters or the Company may postpone the Closing Date for up
to seven full business days in order to effect any changes that in the opinion
of counsel for the Company or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or
arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any
such changes.
8. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Securities for delivery to the Underwriters for any
reason permitted under this Agreement or (b) the Underwriters shall decline to
<PAGE>
purchase the Securities for any reason permitted under this Agreement, the
Company shall reimburse the Underwriters for such out-of-pocket expenses
(including reasonable fees and disbursements of counsel) as shall have been
reasonably incurred by the Underwriters in connection with this Agreement and
the proposed public offering and sale of the Securities, and upon demand the
Company shall pay the full amount thereof to the Underwriters. If this Agreement
is terminated pursuant to Section 7 by reason of the default of one or more of
the Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of such expenses.
9. Indemnification. (a) The Company shall indemnify and hold
harmless each Underwriter, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 9(a) and Section 10 as an
Underwriter), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which that Underwriter may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Underwriter
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any information contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter specifically for use therein (the "Underwriters' Information"); and
provided, further, that with respect to any such untrue statement in or omission
from any Preliminary Prospectus, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any such Underwriter to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by such Underwriter and any such loss,
claim, damage, liability or action of or with respect to such Underwriter
results from the fact that both (A) to the extent required by applicable law, a
copy of the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person and (B) the
untrue statement in or omission from such Preliminary Prospectus was corrected
in the Prospectus unless, in either case, such failure to deliver the Prospectus
was a result of non-compliance by the Company with Section 4(a).
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(b) and
<PAGE>
Section 10 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Underwriters' Information, and shall
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
<PAGE>
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened 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 proceeding.
The obligations of the Company and the Underwriters in this
Section 9 and in Section 10 are in addition to any other liability that the
Company or the Underwriters, as the case may be, may otherwise have, including
in respect of any breaches of representations, warranties and agreements made
herein by any such party.
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities 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 Underwriters on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Securities
purchased under this Agreement, on the other, bear to the total gross proceeds
from the sale of the Securities under this Agreement, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault 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 the Company or information supplied by the Company on
the one hand or to any Underwriters' Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
<PAGE>
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total underwriting discounts and commissions
received by such Underwriter with respect to the Securities purchased by it
under this Agreement exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10 are several in proportion to their respective
purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 9 and 10 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the
Underwriters. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 11, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
12. Expenses. The Company agrees with the Underwriters to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (c) the
costs of printing and distributing the Registration Statement as originally
filed and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the Prospectus
and any amendment or supplement thereto, all as provided in this Agreement; (d)
the costs of printing, reproducing and distributing the Indenture, this
Agreement and any underwriting and selling group documents; (e) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Securities; (f) the fees
and expenses of the Company's counsel and independent accountants; (g) the fees
and expenses of preparing, printing and distributing Blue Sky Memoranda
(including related fees and expenses of counsel to the Underwriters); (h) any
fees charged by rating agencies for rating the Securities; (i) all fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); and (j) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 12 and Section 8,
the Underwriters shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Underwriters contained in this Agreement or made by or on behalf of the Company
or the Underwriters pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
<PAGE>
14. Notices, etc.. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., 270 Park Avenue, New
York, New York 10017, Attention: James Casey (telecopier no.: (212)
270-0994); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer (telecopier
no.: (814) 260-7098);
provided that any notice to an Underwriter pursuant to Section 9(c) shall also
be delivered or sent by mail to such Underwriter at its address set forth on the
signature page hereof. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by CSI.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading and (b) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act.
16. Underwriters' Information. The parties hereto acknowledge
and agree that the Underwriters' Information consists solely of the following
information in any Preliminary Prospectus and the Prospectus: (i) the last
paragraph on the front cover page concerning the terms of the offering by the
Underwriters; and (ii) the statements concerning the Underwriters contained in
the Prospectus under the heading "Underwriting".
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ James Brown
Name: James Brown
Title: Vice-President
Accepted:
CHASE SECURITIES INC.,
on behalf of itself and the other
Underwriters listed on Schedule 1 hereto
By /s/ Christopher Linneman
Authorized Signatory
Address for notices pursuant to Section 9(c):
1 Chase Plaza, 25th floor
New York, New York 10081
Attention: Legal Department
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1
Principal
Amount
Underwriters of Securities
- - ------------ -------------
<S> <C>
Chase Securities Inc. $157,500,000
Salomon Smith Barney Inc. 45,290,000
Scotia Capital Markets (USA) Inc. 45,290,000
TD Securities (USA) Inc. 45,290,000
Barclays Capital, Inc. 22,610,000
Fleet Securities, Inc. 11,340,000
Nesbitt Burns Securities Inc. 11,340,000
PNC Capital Markets, Inc. 11,340,000
-----------
Total $350,000,000
</TABLE>
Exhibit 1.03
2,500,000 Shares
Adelphia Communications Corporation
5 1/2% Series D Convertible Preferred Stock
(Liquidation Preference $200 per share)
UNDERWRITING AGREEMENT
April 26, 1999
SALOMON SMITH BARNEY INC.
As representative of the several underwriters named on Schedule I
hereto
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies & Gentlemen:
Adelphia Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 2,500,000 shares (the
"Firm Shares") of its 5 1/2% Series D Convertible Preferred Stock, liquidation
preference $200 per share (the "Series D Preferred Stock"), to the several
underwriters named on Schedule I hereto (the "Underwriters") for whom Salomon
Smith Barney Inc. is acting as representative (in such capacity, the
"Representative"). The Company also proposes to sell to the Underwriters, upon
the terms and conditions set forth in Section 2 hereof, up to an additional
375,000 shares (the "Additional Shares") of Series D Preferred Stock. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"Shares." The Company recently announced the following pending acquisitions:
Olympus Communications, L.P., FrontierVision Partners, L.P., Harron
Communications Corp. and Century Communications Corp. (collectively the
"Acquired Companies"). With respect to the representations, warranties and
agreements made by the Company in this Agreement concerning the Acquired
Companies, such representations, warranties and agreements shall be limited to
the knowledge of the Company in all cases.
The Company wishes to confirm as follows its agreement with the
Underwriters in connection with the purchase of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a Registration Statement on Form S-3 under the Act (the "Registration
Statement"), including a prospectus and a prospectus supplement relating to the
Shares. The term "Registration Statement" as used in this Underwriting Agreement
means the Registration Statement (including all financial schedules and
exhibits), as supplemented or amended at the time of the execution of this
Underwriting Agreement. If a post-effective amendment or supplement to a
registration statement is filed in connection with the offering of the Shares,
the term "Registration Statement" as used in this Underwriting Agreement means
the Registration Statement as amended by said post-effective amendment or
supplement. The term "Prospectus" as used in this Underwriting Agreement means
<PAGE>
the prospectus (including the prospectus supplement relating to the Shares) in
the form included in the Registration Statement, or, if the prospectus
(including the prospectus supplement relating to the Shares) included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus (or a prospectus supplement)
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Underwriting Agreement means the prospectus
(including the prospectus supplement relating to the Shares) in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus (including the prospectus
supplement relating to the Shares) filed with the Commission pursuant to Rule
424(b). Any reference in this Underwriting Agreement to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement or the Prospectus
and any reference to any amendment or supplement to the Registration Statement
or the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, the Prospectus, or any amendment or
supplement thereto.
For purposes of this Underwriting Agreement: "Rules and Regulations"
means the rules and regulations adopted by the Commission under either the Act
or the Exchange Act, as applicable.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter 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 Underwriter agrees to purchase from the
Company, at a purchase price of $193.98 per share (the "purchase price per
share"), the Firm Shares.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, 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, the Underwriters shall
have the right to purchase from the Company, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised at
any time and from time to time prior to 5:00 P.M., New York City time, on the
30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
Nasdaq National Market is open for trading), up to an aggregate of 375,000
Additional Shares. Additional Shares may be purchased only for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares.
3. Terms of Public Offering. The Company has been advised by the
Underwriters that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after this Underwriting Agreement has
become effective as in the Underwriters' judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of Latham
& Watkins, 885 Third Avenue, New York, New York 10022 at 10:00 A.M., New York
City time, on April 30, 1999 (the "Closing Date"). The place of closing for the
Shares and the Closing Date may be varied by agreement between the Underwriters
and the Company.
<PAGE>
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Latham & Watkins at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than five business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from the Representative on behalf of the Underwriters to the Company of
the Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between the
Representative on behalf of the Underwriters and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as the Representative on behalf of the Underwriters shall request prior to 9:30
A.M., New York City time, on the second business day preceding the Closing Date
or any Option Closing Date, as the case may be. Such certificates shall be made
available to the Underwriters 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 or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to the Underwriters on the Closing Date or the Option Closing
Date, as the case may be, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Company. The Company agrees with the Underwriters
as follows:
(a) If, at the time this Underwriting Agreement is executed
and delivered, it is necessary for a post-effective amendment thereto to be
declared effective before the offering of the Underwritten Shares may commence,
the Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will advise
the Underwriters promptly and, if requested by the Underwriters, will confirm
such advice in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) The Company will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the Registration
Statement or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (e)
below, of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectus in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to the Underwriters, without
charge, one signed copy of the Registration Statement as originally filed with
the Commission and of each amendment and supplement thereto, including financial
statements and all exhibits thereto, and will also furnish to the Underwriters,
without charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, as the
Underwriters may request.
<PAGE>
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment to the Prospectus or any amendment
to any of the documents incorporated by reference in the Prospectus or amend or
supplement the prospectus supplement utilized in connection with this offering
of which the Underwriters shall not previously have been advised or to which the
Underwriters shall object after being so advised or (ii) so long as, in the
written opinion of counsel for the Underwriters, a prospectus is required to be
delivered in connection with sales by any Underwriter or dealer, file any
information, documents or reports pursuant to the Exchange Act, without
delivering a copy of such information, documents or reports to the Underwriters,
prior to or concurrently with such filing.
(e) As soon after the execution and delivery of this
Underwriting Agreement as possible and thereafter from time to time for such
period as in the written opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by any Underwriters
or dealer, the Company will expeditiously deliver to the Underwriters and each
dealer, without charge, as many copies of the Prospectus as the Underwriters may
request. The Company consents to the use of the Prospectus in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by the Underwriters
or any dealer. If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus or should be set forth therein 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 Prospectus to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof.
(f) The Company will cooperate with the Underwriters and with
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such registration or
qualification; 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 Shares, in any
jurisdiction where it is not now so subject.
(g) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(h) During the period of five years after the date of this
Underwriting Agreement, the Company will (i) make generally available a copy of
each report of the Company mailed to stockholders or filed with the Commission
or the Nasdaq National Market and will promptly notify the Underwriters of such
mailing or filing and (ii) furnish to the Underwriters from time to time such
other information concerning the Company and its subsidiaries as the
Underwriters may request.
(i) If this Underwriting Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than by
notice given by the Underwriters terminating this Underwriting Agreement
<PAGE>
pursuant to Section 10 or Section 11 hereof) or if this Underwriting Agreement
shall be terminated by the Underwriters 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 Underwriting Agreement, the Company agrees to negotiate in good faith
regarding the reimbursement to the Underwriters for out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
(k) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
the Underwriters of the time and manner of such filing.
(l) The Company has authorized and has reserved, and covenants
to continue to reserve, free of any preemptive or similar rights, a sufficient
number of its authorized but unissued shares of its Class A Common Stock, $.01
par value per share (the "Class A Common Stock"), to satisfy the conversion
rights of the Series D Preferred Stock (such shares of Class A Common Stock
issuable upon conversion being referred to as the "Conversion Shares").
(m) The Company will use its best efforts to have the Shares
and the Conversion Shares listed, subject to notice of issuance, on the Nasdaq
National Market as of the Closing Date or as soon thereafter as practicable.
(n) To the extent that the Shares constitute uncertificated
securities pursuant to Section 158 of the Delaware General Corporation Law, the
Company agrees that within a reasonable time after the issuance or transfer of
such uncertificated Shares, the Company shall send to the registered owner
thereof a written statement that the Company will furnish without charge to each
stockholder who so requests the powers, designations, preferences, and relative,
participating, optional or other special rights pertaining to such Shares and
any other information as may be required under Section 151(f) of the Delaware
General Corporation Law.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement in the form in which it became
or becomes effective and also in such form as it may be when any post-effective
amendment thereto has or shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule 424(b)
under the Act, complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by an Underwriter expressly for use therein.
(b) Neither the Company nor any of the Acquired Companies has
sustained since December 31, 1998 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 Prospectus; and,
since the respective dates as of which information is given in the Prospectus,
<PAGE>
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",
which term shall be deemed to include all of the Acquired Companies and each of
their material subsidiaries for purposes of this Section 6) 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, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(c) (i) Each of the Subsidiaries that is a partnership 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
Prospectus, 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
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"); 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 Prospectus, 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.
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Underwriting Agreement and to consummate the transactions contemplated hereby
and thereby, including, without limitation, the corporate power and authority to
issue, sell and deliver the Shares as provided herein and to issue and deliver
the Conversion Shares upon due conversion of the Shares in accordance with the
terms of the Series D Preferred Stock.
(e) The Underwriting Agreement has been duly and validly
authorized, executed and delivered by the Company and is the legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except insofar as indemnification and contribution provisions
may be limited by applicable law or public policy or equitable principles and
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
(f) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; the issuance of
the Conversion Shares, upon due conversion of the Shares in accordance with the
terms of the Series D Preferred Stock will not require any further corporate
action; upon such conversion the Conversion Shares will be validly issued, fully
<PAGE>
paid and nonassessable, and free of any preemptive or similar rights; and the
capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectus.
(g) Each of the Company's Subsidiaries has the ownership or
authorized capitalizations, as the case may be, as set forth in the Prospectus,
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 Prospectus as being
owned directly or indirectly by the Company and all of the issued shares of
capital stock of the Subsidiaries that are corporations disclosed in the
Prospectus as being owned directly or indirectly by the Company 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 Prospectus); and descriptions of the
ownership of the various interests and shares of the Company and its
Subsidiaries in the Prospectus are true and complete in all material respects;
(h) Except as disclosed, contemplated or referenced in the
Prospectus, there are not currently, and will not be as a result of the
transactions contemplated hereby, any material outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or other
equity interest of the Company or any Subsidiary.
(i) Other than as set forth in the Prospectus (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 Prospectus that would be required to be disclosed in the
Prospectus or the Registration Statement; (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 knowledge, after due inquiry, there is no reasonable
basis for any such action, suit, proceeding or investigation.
(j) Except for matters covered by paragraph (w) 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
<PAGE>
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 Prospectus, 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.
(k) (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 Prospectus; 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 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.
(l) 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.
(m) 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.
(n) (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
<PAGE>
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.
(o) Neither the execution and delivery of this Underwriting
Agreement, nor the consummation of the transactions contemplated hereby and
thereby or by the Prospectus under "Use of Proceeds," nor compliance with the
terms, conditions and provisions hereof and 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.
(p) Neither the execution and delivery of this Underwriting
Agreement, nor the consummation of the transactions contemplated hereby or
thereby nor compliance with the terms, conditions and provisions hereof and
thereof by the Company, requires any license, permit, franchise, certificate,
consent, authorization, designation, declaration, filing, registration or
qualification by or with the FCC.
(q) None of the Company or the Subsidiaries is and, after
giving effect to the transactions contemplated hereby will be (A) in violation
of its charter, bylaws, partnership agreement or operating agreement, as
applicable, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties is subject,
or (C) in violation of any local, state or Federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary or any of their respective
assets or properties (whether owned or leased) other than, in the case of
clauses (B) and (C), any default or violation that could not reasonably be
expected to have a Material Adverse Effect. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under any
such document or instrument that could reasonably be expected to have a Material
Adverse Effect.
(r) Neither the issuance and sale of the Shares, the issuance
of the Conversion Shares upon due conversion of the Shares in accordance with
the terms of the Series D Preferred Stock, the execution, delivery or
performance by the Company of this Underwriting Agreement by the Company, or the
consummation by the Company of the transactions contemplated hereby and thereby
violate, conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary or an acceleration of any indebtedness of the Company, any Subsidiary
pursuant to, (i) the charter or bylaws of the Company or any Subsidiary or the
partnership agreement or operating agreement governing any of their material
joint ventures, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which the Company, any Subsidiary or
any of their material joint ventures is a party or by which any of them or their
property is or may be bound, (iii) any local, state or Federal law, statute,
<PAGE>
ordinance, rule, regulation or requirement (including, without limitation, the
Communications Act and the rules and regulations of the FCC and environmental
laws, statutes, ordinances, rules or regulations) applicable to the Company, any
Subsidiary, any of their material joint ventures or any of their respective
assets or properties or (iv) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company, the
Subsidiaries, any of their material joint ventures or any of their assets or
properties, except in the case of clauses (ii), (iii) and (iv) for such
violations conflicts, breaches, defaults, consents, impositions of liens or
accelerations that would not singly, or in the aggregate, have a Material
Adverse Effect. Other than as described in the Prospectus, no consent, approval,
authorization or order of, or filing, registration, qualification, license or
permit of or with, (A) any court or governmental agency, body or administrative
agency (including, without limitation, the FCC) or (B) any other person is
required for (1) the execution, delivery and performance by the Company of this
Underwriting Agreement or (2) the issuance and sale of the Shares and the
transactions contemplated hereby and thereby, except (x) such as have been
obtained and made under the Act and state securities or Blue Sky laws and
regulations or such as may be required by the NASD or (y) where the failure to
obtain any such consent, approval, authorization or order of, or filing
registration, qualification, license or permit would not reasonably be expected
to result in a Material Adverse Effect.
(s) The accountants who have certified or shall certify the
financial statements included in the Registration Statement and the Prospectus
are independent public accountants as required by the Act. The historical
financial statements of the Company and each of the Subsidiaries comply as to
form in all material respects with the requirements applicable to registration
statements on Form S-3 under the Act and present fairly in all material respects
the financial position and results of operations of the Company and each of its
Subsidiaries, at the respective dates and for the respective periods indicated.
Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods presented. The other financial information and data included in the
Registration Statement and Prospectus, historical and pro forma, are accurately
presented in all material respects and prepared on a basis consistent with the
financial statements, historical and pro forma, included in the Prospectus and
the books and records of the Company and each of its Subsidiaries. The
statistical information and data included in the Prospectus are accurately
presented in all material respects.
(t) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus, present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectus are accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
(u) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act.
(v) There is (i) no unfair labor practice complaint pending
against the Company or any Subsidiary or threatened, before the National Labor
Relations Board, any state or local labor relations board or any foreign labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
<PAGE>
pending or threatened against the Company or any Subsidiary, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company or any
Subsidiary or threatened against the Company or any Subsidiary and (iii) no
union representation question existing with respect to the employees of the
Company or any Subsidiary that, in the case of clauses (i), (ii) or (iii), could
reasonably be expected to result in a Material Adverse Effect. To the best of
the Company's knowledge, no collective bargaining organizing activities are
taking place with respect to the Company or the Subsidiaries. None of the
Company or any Subsidiary has violated (A) any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations thereunder, which in the case of clause (A), (B) or (C) above could
reasonably be expected to result in a Material Adverse Effect.
(w) None of the Company or any Subsidiary has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other approval
required of it under applicable Environmental Laws is violating any term or
condition of such permit, license or approval which could reasonably be expected
to, either individually or in the aggregate, have a Material Adverse Effect.
(x) Each of the Company and the Subsidiaries has (i) good and
marketable title to all of the properties and assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Prospectus or as would not
have a Material Adverse Effect and (ii) peaceful and undisturbed possession
under all leases to which any of them is a party as lessee. All leases to which
the Company and the Subsidiaries are a party are valid and binding and no
default by the Company or any Subsidiary has occurred and is continuing
thereunder and no defaults by the landlord are existing under any such lease
that could reasonably be expected to result in a Material Adverse Effect.
(y) Each of the Company and the Subsidiaries owns, possesses
or has the right to employ all patents, patent rights, licenses (including all
FCC, state, local or other jurisdictional regulatory licenses), inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and information (collectively, the "Intellectual
Property") presently employed by the Company and its Subsidiaries in connection
with the businesses now operated by it or which are proposed to be operated by
the Company or its Subsidiaries free and clear of and without violating any
right, claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person and none of the Company and
any Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing except as
described in the Prospectus as could not reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property in connection with
the business and operations of the Company and the Subsidiaries does not
infringe on the rights of any person, except as would not have a Material
Adverse Effect.
(z) None of the Company, any Subsidiary, or any of their
respective officers, directors, partners, employees, agents or affiliates or any
other person acting on behalf of the Company or any Subsidiary, as the case may
be, has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer, supplier, employee or agent of a customer
or supplier, official or employee of any governmental agency (domestic or
foreign), instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other person
who was, is or may be in a position to help or hinder the business of the
<PAGE>
Company or any Subsidiary (or assist the Company or any Subsidiary in connection
with any actual or proposed transaction) which (i) might subject the Company or
any Subsidiary, or any other individual or entity to any damage or penalty in
any civil, criminal or governmental litigation or proceeding (domestic or
foreign), (ii) if not given in the past, could reasonably be expected to have
had a Material Adverse Effect on the assets, business or operations of the
Company or any Subsidiary or (iii) if not continued in the future, could
reasonably be expected to have a Material Adverse Effect.
(aa) All tax returns required to be filed by the Company and
each of the Subsidiaries in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest. There are no proposed additional tax assessments against the
Company, any Subsidiary, or the assets or property of the Company or any
Subsidiary.
(bb) None of the Company or the Subsidiaries is now, and after
sale of the Shares to be sold by the Company and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be (i) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"), or (ii) a "registered holding
company" or a "subsidiary company" or an "affiliate" of a registered holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended (the "PUC Act").
(cc) Except as disclosed in the Prospectus, there are no
holders of securities of the Company or the Subsidiaries who, by reason of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Underwriting Agreement, have the right to request or demand
that the Company, any of the Subsidiaries or any of their joint ventures
register any of its securities (including, without limitation, Class A Common
Stock and Class B Common Stock) under the Act. Except as described in the
Prospectus, no such rights with respect to any shares of Class A Common Stock
have been exercised as of the date hereof.
(dd) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(ee) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance. All such insurance is outstanding and duly in force on the date
hereof.
<PAGE>
(ff) None of the Company or any of the Subsidiaries has (i)
taken, 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
any security of the Company to facilitate the sale or resale of the Shares, (ii)
since the date of the Prospectus, except in connection with the Company's sale
of 8,000,000 shares of Class A Common Stock on April 28, 1999, or the Company's
sale of 7-7/8% Senior Notes due 2009 on April 28, 1999, (A) sold, bid for,
purchased or paid any person any compensation for soliciting purchases of the
Common Stock or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(gg) The execution and delivery of this Underwriting Agreement
and the issuance and sale of the Shares will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended.
(hh) None of (A) the execution, delivery and performance of
this Underwriting Agreement, (B) the issuance and sale of the Shares, (C) the
application of the proceeds from the issuance and sale of the Shares or (D) the
consummation of the transactions contemplated in connection with any of the
foregoing as set forth in the Prospectus, will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations.
(ii) Except pursuant to this Underwriting Agreement, there are
no contracts, agreements or understandings between the Company, any of its
Subsidiaries or any of their joint ventures and any other person that would give
rise to a valid claim against the Company or any of the Underwriters for a
brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Shares.
(jj) During the past twenty-four months, the Company has filed
in a timely manner each document or report required to be filed by it pursuant
to the Exchange Act and the rules and regulations thereunder; each such document
or report at the time it was filed conformed to the requirements of the Exchange
Act and the rules and regulations thereunder; and none or such documents or
reports contained an untrue statement of any material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(kk) Each of the Company and the Subsidiaries has complied
with all provisions of Section 517.075, Florida Statutes, relating to doing
business with the Government of Cuba or with any affiliate located in Cuba.
(ll) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be disclosed
therein pursuant to Item 404 of Regulation S-K of the Commission.
The Company acknowledges that the Underwriters and, for
purposes of the opinions to be delivered to the Underwriters pursuant to Section
8(e), (f), (g) and (k) hereof, counsel to the Company and counsel to the
Underwriters, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
<PAGE>
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement in any amendment thereof,
or in the Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified
party, as incurred, 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 Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise have.
The Company acknowledges that the statements under the heading "Underwriting" or
"Plan of Distribution," (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Prospectus constitute
the only information furnished in writing by or on behalf of the Underwriters
for inclusion in any Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
<PAGE>
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Shares;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Shares) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Shares purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 7, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the following
conditions:
<PAGE>
(a) All of the representations and warranties of the Company
contained in this Underwriting Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
(b) If, at the time this Underwriting Agreement is executed
and delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto (including pursuant to Rule 462(b)) to be
declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 424 and 430A under the
Act shall have been timely made; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or the
Underwriters, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Underwriters'
satisfaction.
(c) Subsequent to the effective date of this Underwriting
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, that would have a Material Adverse Effect on the
Company and the Subsidiaries, taken as a whole, not contemplated by the
Prospectus, which in the Underwriters' opinion, would materially adversely
affect the market for the Shares, or (ii) any event or development relating to
or involving the Company, the Subsidiaries, or any officer or director of the
Company or the Subsidiaries which makes any statement made in the Prospectus
untrue or which, in the opinion of the Company and its counsel or the
Underwriters and its counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in the Underwriters' opinion, materially
adversely affect the market for the Shares.
(d) The Underwriters shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by any two officers (for the
purpose of this subsection (d) "officer" shall mean the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or Assistant Secretary) in form and substance reasonably
satisfactory to the Underwriters, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), and (c) of this Section 8, certain
incumbency matters and that, as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed.
(e) The Underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Buchanan Ingersoll Professional Corporation, counsel for the
Company, to the effect that:
(i) 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
Prospectus.
(ii) This Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
(iii) All of the outstanding shares of capital stock
of the Company have been duly authorized, validly issued, and are fully
paid and nonassessable and were not issued in violation of any
<PAGE>
preemptive or similar rights. The outstanding shares of capital stock
of the Company, as of December 31, 1998, are as set forth in the
Prospectus under the caption "Capitalization." The authorized capital
stock of the Company conforms in all material respects as to legal
matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock."
(iv) The Shares to be issued and sold to the
Underwriters by the Company under this Underwriting Agreement have been
duly authorized and when issued and delivered to the Underwriters
against payment therefor in accordance with the terms of this
Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any (A) preemptive rights or (B) to the best
knowledge of such counsel after reasonable inquiry, similar rights that
entitle or will entitle any person to acquire any Series D Preferred
Stock or Class A Common Stock upon the issuance thereof by the Company,
other than as described in the Prospectus.
(v) The Conversion Shares issuable as of the date
hereof have been duly authorized and reserved for issuance; the
issuance of the Conversion Shares upon due conversion of the Shares
will not require any further corporate action; upon such conversion the
Conversion Shares will be validly issued, fully paid and nonassessable
and free of any (A) preemptive rights or (B) to the best knowledge of
such counsel after reasonable inquiry, similar rights that entitle or
will entitle any person to acquire any Series D Preferred Stock or
Class A Common Stock upon the issuance thereof by the Company, other
than as described in the Prospectus.
(vi) The form of certificates for the Shares and the
Conversion Shares conforms to the requirements of the Nasdaq National
Market and the Delaware General Corporation Law.
(vii) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act
and, to the best knowledge of such counsel after reasonable inquiry, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose are pending before
or contemplated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b).
(viii) The Company has the corporate power and
authority to enter into this Underwriting Agreement and to issue, sell
and deliver the Shares as provided therein and to issue the Conversion
Shares upon due conversion of the Shares in accordance with the terms
of the Series D Preferred Stock, and this Underwriting Agreement has
been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except that (A) such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium (whether general or specific) or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, (B) such enforceability may be limited by
the effects of general principles of equity and by the discretion of
the court before which any proceeding therefor may be brought (whether
such proceeding is at law or in equity or in a bankruptcy proceeding)
and (C) rights to contribution or indemnification may be limited by the
laws, rules or regulations of any governmental authority or agency
thereof or public policy and (D) waivers as to usury, stay or extension
laws may be unenforceable.
<PAGE>
(ix) The Registration Statement and the Prospectus,
as of their dates (except for the financial statements, including the
notes thereto, and supporting schedules and other financial,
statistical and accounting data included therein or omitted therefrom,
as to which no opinion is expressed), and each amendment or supplement
thereto, as of its date, comply as to form in all material respects
with the Act.
(x) Neither the issuance, sale or delivery of the
Shares, nor the execution, delivery or performance of this Underwriting
Agreement, or compliance by the Company with all provisions of this
Underwriting Agreement, nor consummation by the Company of the
transactions contemplated hereby, nor the issuance of the Conversion
Shares upon due conversion of the Shares in accordance with the terms
of the Series D Preferred Stock violates, conflicts with or constitutes
a breach of any of the terms or provisions of, or a default under (or
an event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or
any subsidiary, or an acceleration of any indebtedness of the Company
or any subsidiary pursuant to, (i) the charter or bylaws of the Company
or (ii) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or its assets
or properties known to such counsel, except in the case of clause (ii)
for such violations, conflicts, breaches, defaults, consents,
impositions of liens or accelerations that (x) would not, singly or in
the aggregate, have a Material Adverse Effect or (y) are disclosed in
the Prospectus.
(xi) None of the Company, its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act or (ii) a
"registered holding company" or a "subsidiary company" or an
"affiliate" of a registered holding company within the meaning of the
PUC Act.
(xii) Except as set forth in the Prospectus, there
are no holders of securities of the Company who, by reason of the
execution by the Company of this Underwriting Agreement or the
consummation by the Company of the transactions contemplated thereby,
have the right to request or demand that the Company register under the
Act securities held by them.
(xiii) None of (A) the execution, delivery and
performance of this Underwriting Agreement or (B) the issuance and sale
of the Shares and the application of the proceeds from the issuance and
sale of the Shares will violate Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
(xiv) To the knowledge of such counsel, there is (i)
no action, suit, investigation or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic or
foreign, now pending, or threatened or contemplated to which any of the
Company or any subsidiary is or may be a party or to which the business
or property of any of the Company or any subsidiary is or may be
subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency, or (iii) no
injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction to which any of the Company or
any subsidiary is or may be subject that has been issued that, in the
case of clauses (i), (ii) and (iii) above, (x) is required to be
disclosed in the Prospectus and that is not so disclosed and, (y) could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, it being understood that for
purposes of this opinion, such counsel need express no opinion with
respect to (i) actions, suits investigation or proceedings before the
FCC or any similar state or local regulatory commission or body, (ii)
statutes, rules, regulations or orders by any FCC or any similar state
<PAGE>
or local regulatory commission or (iii) injunctions, restraining orders
or other orders by the FCC or any similar state or local regulatory
commission or body.
(xv) The statements set forth in the Prospectus under
the caption "Risk Factors -- Shares Eligible for Future Sale,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Financing Transactions," insofar as they
purport to describe the Company's Capital Stock or the debt instruments
referred to therein are, when taken together with the other information
included in the Prospectus, accurate in all material respects.
In addition, such counsel shall also state that, during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with officers and other representatives of
the Company, representatives of the certified public accountants of the Company,
the Underwriter's representatives and the Underwriters' counsel, at which
conferences the contents of the Registration Statement and the Prospectus
(including the documents incorporated by reference in the Prospectus) and
related matters were generally discussed and, although such counsel has not
undertaken, except as otherwise indicated in our opinion, to determine
independently, and such counsel is not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus has not made an
independent investigation of facts for the purpose of rendering this opinion,
such counsel advises the Underwriters that, on the basis of the foregoing
(relying as to materiality to the extent we deemed appropriate upon the
statements of officers and other representatives of the Company), no facts have
come to our attention which lead us to believe that the Registration Statement
at the time it became effective, or the Prospectus, as of their respective dates
and as of the Closing Date, in each case including the documents incorporated by
reference in the Prospectus, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated in the Prospectus or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such counsel expresses no opinion as to
financial statements (including the schedules and notes thereto) or any other
financial or statistical data or calculations directly or indirectly contained
or referenced to in, or related to, or omitted from, the Prospectus.
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, the
Commonwealth of Pennsylvania and the federal laws of the United States.
(f) The underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Randall D. Fisher, Esq., General Counsel of the Company, to the
effect that:
(i) Except as set forth in the Prospectus, 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 Underwriters 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;
(ii) 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
<PAGE>
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.
(iii) 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 this Underwriting Agreement where the
failure to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would have a Material Adverse Effect.
(iv) 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.
(v) The statements in the Prospectus under the
headings "Risk Factors -- Regulation in the Telecommunications
Industry," "Risk Factors -- Extensive Regulation" and "Risk Factors --
Competition," insofar as they relate to the Company and its
Subsidiaries operations in each of New York, Virginia, Pennsylvania,
Ohio, New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects.
(vi) Neither the execution and delivery of this
Underwriting Agreement nor the offering of the Shares contemplated
hereby or 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 on the Company and its subsidiaries.
(g) The Underwriters shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters, of Colin H. Higgin, Deputy General Counsel of the Company, to the
effect that:
(i) 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.
(ii) 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
<PAGE>
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
Underwriters and he are justified in relying upon such opinions and
certificates).
(iii) 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 Prospectus) (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
Underwriters and he are justified in relying upon such opinions and
certificates).
(iv) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, 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, shareholder's equity, partners'
equity, or results of operations of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(v) Neither the issuance and sale of the Shares, the
execution, delivery or performance by the Company of this Underwriting
Agreement, or the consummation by the Company of the transactions
herein and therein contemplated, nor the issuance of the Conversion
Shares upon due conversion of the Shares in accordance with the terms
of the Series D Preferred Stock will, 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.
(vi) 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, the
execution, delivery or performance by the Company of this Underwriting
Agreement or the consummation by the Company of the transactions
contemplated herein or therein, 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 Shares by the Underwriters.
<PAGE>
(vii) Except as described in the Prospectus or in
this Underwriting Agreement, all of the outstanding capital stock of
each subsidiary is owned by the Company, free and clear of any security
interest, claim, lien, limitation on voting rights or encumbrance
(other than liens to secure indebtedness under credit facilities
disclosed in the Prospectus). There are not, to my knowledge, other
than as set forth, contemplated or referenced in the Prospectus,
currently, and will not be immediately following the issuance and sale
of the Shares, any material outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or
other equity interest of the Company or any subsidiary.
(viii) The Consummation of the transactions
contemplated in connection with any of the foregoing as set forth in
the Prospectus, will not violate Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
In addition, such counsel shall also state that,
although we have not undertaken, except as otherwise indicated in our
opinion, to determine independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
statements in the Registration Statement, we have participated in the
preparation of the Registration Statement and the Prospectus, including
general review and discussion of the contents thereof but have made no
independent check or verification thereof, and no facts have come to
our attention that would lead us to believe that the Registration
Statement at the time the Registration Statement became effective, or
the Prospectus, as of their respective dates and as of the Closing
Date, in each case including the documents incorporated by reference in
the Prospectus, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
in the Prospectus or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
or that any amendment or supplement to the Prospectus, as of their
respective dates, and as of the Closing Date, as the case may be,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated in the Prospectus or necessary in
order to make the statements in the Prospectus, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements, schedules, pro forma financial statements and
the notes thereto and other financial data included in the Registration
Statement and the Prospectus).
(h) The Underwriters shall have received on the Closing Date,
an opinion of Fleischman & Walsh, L.L.P., special regulatory counsel for the
Company and its subsidiaries, dated the Closing Date, in form and substance
satisfactory to the Underwriters, of, to the effect that:
(i) 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.
(ii) 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
<PAGE>
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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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. 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.
(vii) 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.
(viii) 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
<PAGE>
this Underwriting 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.
(ix) Neither the execution and delivery of the this
Underwriting Agreement nor the offering of the Class A common stock
contemplated thereby 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 the Underwriters'
attention to the following.
(x) 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 the Underwriters 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.
(xi) 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 this Underwriting Agreement and/or
related financing documents purport to grant to the Underwriters a
security interest in any FCC licenses, such security interest may not
be legally enforceable.
(xii) 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.
(xiii) In our opinion, the Statements in the
Prospectus under the headings "Risk Factors -- Regulation in the
Telecommunications Industry," "Risk Factors -- Extensive Regulation"
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.
(i) The Underwriters shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
of Latham & Watkins, counsel to the Underwriters, covering such matters as are
customarily covered in such opinions.
(j) The Company shall have furnished to the Underwriters a
letter from each of Deloitte & Touche LLP and KPMG LLP, addressed to the
Underwriters and dated the Closing Date covering the matters previously
requested by Latham & Watkins, in form and substance satisfactory to Salomon
Smith Barney Inc. and their counsel in their sole discretion.
(k) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock 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 contemplated in the
Registration Statement or the Prospectus; (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as may otherwise be stated in the
Registration Statement, any material adverse change in the condition (financial
<PAGE>
or other), business, prospects, properties, net worth or results of operations
of the Company and the subsidiaries taken as a whole; (iv) there shall not have
been any announcement by either Moody's Investors Service, Inc. or Standard &
Poor's that (a) it is downgrading its rating assigned to any class of securities
of the Company or any of its subsidiaries, or (b) 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 and (v) the
Company and the 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 the subsidiaries, taken as a whole, other than
those reflected in the Registration Statement or the Prospectus.
(l) The Company shall not have failed at or prior to the
Closing Date to have performed or complied 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.
(m) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters and the Underwriters' counsel.
Any certificate or document signed by any officer of the
Company and delivered to the Underwriters or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company to the Underwriters
as to the statements made therein.
The respective obligations of the several Underwriters to
purchase and pay for any Additional Shares shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm Shares,
except that all references to the Firm Shares and the Closing Date shall be
deemed to refer to such Additional Shares and the Option Closing Date,
respectively.
9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, 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 Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this
Underwriting Agreement, the Blue Sky Memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the registration of the Class A Common Stock under the
Exchange Act and the listing of the Shares on the Nasdaq National Market; (vi)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the Blue Sky Memorandum and such registration and qualification);
(vii) the filing fees and the fees and expenses of counsel for the Underwriters
<PAGE>
in connection with any filings required to be made with the National Association
of Securities Dealers, Inc.; (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. Effective Date of Agreement. This Underwriting Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Underwriting Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares may
commence, when notification of the effectiveness of the Registration Statement
or such post-effective amendment has been released by the Commission. Until such
time as this Underwriting Agreement shall have become effective, it may be
terminated by the Company, by notifying the Underwriters, or by the
Underwriters, by notifying the Company.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Underwriting Agreement shall be
subject to termination in the Underwriters' absolute discretion, without
liability on the part of the Underwriters to the Company, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities of the Company on the Nasdaq National Market
or 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
or Philadelphia shall have been declared by either federal or state authorities,
or (iii) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic 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 Underwriters' judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the statements in the fifth, sixth, seventh and eighth paragraphs under the
caption "Underwriting" in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 6(a) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Underwriting Agreement
shall be in writing and shall be delivered (i) if to the Company, at the office
of the Company at Adelphia Communications Corporation, Main at Water Street,
Coudersport, Pennsylvania 16915, Attention: Chief Financial Officer; or (ii) if
to the Underwriters, care of Salomon Smith Barney Inc., 388 Greenwich Street,
New York, New York 10013, Attention:
Registration Department.
This Underwriting Agreement has been and is made solely for
the benefit of the Underwriters, the Company, its directors and officers, and
the other controlling persons referred to in Section 7 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 Underwriting
Agreement. Neither the term "successor" nor the term "successors and assigns" as
<PAGE>
used in this Underwriting Agreement shall include a purchaser from the
Underwriters of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Underwriting 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.
This Underwriting Agreement may be signed in various
counterparts which together constitute one and the same instrument. If signed in
counterparts, this Underwriting Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of
each party hereto.
[signature pages follow]
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: /S/ James Brown
Name: James Brown
Title: Vice-President
Confirmed as of the date first above mentioned.
SALOMON SMITH BARNEY INC., on behalf of itself and the other Underwriters listed
on Schedule I hereto
By: /s/ Christopher Clipper
Authorized Signatory
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE i
Number of Additional Shares to be
Purchased if Maximum Option is
Name of Underwriter Total Number of Firm Shares Exercised
------------------- --------------------------- ---------
<S> <C> <C>
Salomon Smith Barney Inc. 999,760 149,964
Credit Suisse First Boston Corporation 749,820 112,473
Goldman, Sachs & Co. 749,820 112,473
CIBC Oppenheimer Corp. 100 15
Donaldson, Lufkin & Jenrette Securities Corporation 100 15
Lehman Brothers Inc. 100 15
Merrill Lynch, Pierce, Fenner & Smith Incorporated 100 15
Morgan Stanley & Co, Incorporated 100 15
NationsBanc Montgomery Securities LLC 100 15
Total 2,500,000 375,000
</TABLE>
Exhibit 3.01
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
5 1/2% SERIES D CONVERTIBLE PREFERRED STOCK
OF
ADELPHIA COMMUNICATIONS CORPORATION
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
Adelphia Communications Corporation, a Delaware corporation (the
"Company"), 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 "DGCL"), the Series D
Preferred Stock Committee (the "Committee") of the Board of Directors of the
Company (the "Board of Directors") at a meeting held on April 26, 1999, 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 and by the Certificate of Incorporation, the Committee does
hereby designate, create, authorize and provide for the issue of a series of
preferred stock having a par value of $.01 per share, with a liquidation
preference of $200.00 per share subject to adjustment as provided in Section 7
hereof (the "Liquidation Preference") which shall be designated as 5 1/2% Series
D Convertible Preferred Stock (the "Convertible Preferred Stock") consisting of
2,875,000 shares, no shares of which have heretofore been issued by the Company,
having the following powers, designations, preferences and relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions:
1. Ranking. The Convertible Preferred Stock shall rank, with respect to
dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company (i) senior to the Class A Common Stock, par value
$.01 per share, of the Company (the "Class A Common Stock"), the Class B Common
Stock, par value $.01 per share, of the Company (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Common Stock") and to each other
class or series of stock of the Company (including any series of preferred stock
<PAGE>
established after April 26, 1999 by the Board of Directors) the terms of which
do not expressly provide that it ranks senior to or on a parity with the
Convertible Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company (collectively
referred to as "Junior Securities"); (ii) on a parity with the Company's 13%
Series B cumulative exchangeable preferred stock, par value $.01 per share (the
"Series B Exchangeable Preferred Stock") and the Company's 8-1/8% Series C
cumulative convertible preferred stock, par value $.01 per share (the "Series C
Cumulative Preferred Stock" and, together with the Series B Exchangeable
Preferred Stock, the "Preferred Stock"), except that no cash dividend
distributions nor any distributions may be declared or paid on, nor any
redemptions made with respect to the Series B Exchangeable Preferred Stock or
the Convertible Preferred Stock unless full cumulative dividends have been paid
on all outstanding shares of Series C Cumulative Preferred Stock for all prior
dividend periods; and (iii) junior to any equity security, the terms of which
expressly provide that such class or series will rank senior to the Convertible
Preferred Stock as to dividend distributions and distributions upon liquidation,
winding-up and dissolution of the Company (collectively referred to as "Senior
Equity Securities"). The Convertible Preferred Stock shall constitute "Parity
Securities" under the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof for the Series B
Exchangeable Preferred Stock and the Series C Cumulative Preferred Stock as
defined therein.
2. Dividends.
(A) The holders of shares of the Convertible Preferred Stock shall be
entitled to receive, when, as and if dividends are declared by the Board of
Directors out of funds of the Company legally available therefor, cash
dividends, accruing from the date of issuance (the "Convertible Preferred Stock
Issue Date") or the most recent Dividend Payment Date on which dividends have
been paid at the rate per annum of 5 1/2% of the Liquidation Preference per
share (initially equivalent to $11.00 per annum per share of Convertible
Preferred Stock), payable quarterly in arrears on each May 1, August 1, November
1 and February 1, commencing on August 1, 1999 (each a "Dividend Payment Date").
If any such date is not a Business Day, such payment shall be made on the next
succeeding Business Day. In either case such payments shall be made to the
holders of record as of a date preceding the Dividend Payment Date as determined
by the Board of Directors (each, a "Record Date"). Dividends payable on the
Convertible Preferred Stock will be computed on the basis of a 360-day year
consisting of twelve 30-day months and will be deemed to accrue on a daily
basis.
(B) On each Dividend Payment Date all dividends which shall have
accrued on each share of Convertible Preferred Stock outstanding on such
Dividend Payment Date shall accumulate and be deemed to become "due" whether or
not there shall be funds legally available for payment thereof and whether or
not dividends are declared. Any dividend which shall not be paid on the Dividend
Payment Date on which it shall become due (whether because of the absence of
legally available funds for the payment thereof or otherwise) shall be deemed to
be "past due" until such dividend shall be paid or until the share of
Convertible Preferred Stock with respect to which such dividend became due shall
no longer be outstanding, whichever is the earlier to occur. No interest, sum of
money in lieu of interest, or other property or securities shall be payable in
<PAGE>
respect of any dividend payment or payments which are past due. Dividends paid
on shares of Convertible Preferred Stock in an amount less than the total amount
of such dividends at the time accumulated and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding.
(C) If dividends are not paid in full, or declared in full and sums set
aside for the payment thereof, upon the Convertible Preferred Stock and any
equity security, the terms of which expressly provide that such class or series
will rank on a parity with the Convertible Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company (collectively referred to as "Parity Securities"), subject to the
prior rights of holders of any Senior Equity Securities and the Series C
Cumulative Preferred Stock, all dividends declared upon shares of the
Convertible Preferred Stock and such Parity Securities will when, as and if
declared, be declared pro rata so that in all cases the amount of dividends
declared and paid per share on the Convertible Preferred Stock and such Parity
Securities will bear to each other the same ratio that accumulated dividends per
share on the shares of Convertible Preferred Stock and such Parity Securities
bear to each other. Except as set forth above, unless full cumulative dividends
on the Convertible Preferred Stock have been paid, or declared and sums set
aside for the payment thereof, dividends (other than in Common Stock or other
Junior Securities) may not be paid, or declared and sums set aside for payment
thereof, and other distributions may not be made upon the Common Stock or other
Junior Securities; and no shares of Common Stock nor any other Junior Securities
may be redeemed, purchased or otherwise acquired for any consideration by the
Company (except by conversion into or exchange for other Junior Securities and
except for capital stock acquired by the Company in connection with the payment
of any amounts upon the exercise of the Company's stock options).
(D) Dividends on the Convertible Preferred Stock shall accrue without
interest whether or not the Company 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.
(E) Any reference to "distribution" contained in this Section 2 shall
not be deemed to include any distribution made in connection with any
liquidation, winding-up or dissolution of the Company.
3. Conversion.
(A) Subject to and upon compliance with the provisions of this Section
3, each share of Convertible Preferred Stock shall, at the option of the holder
thereof, be convertible at any time (unless such share is called for redemption,
then to and including but not after the close of business on the date
immediately prior to the Redemption Date (as defined herein), unless the Company
shall default in payment due upon redemption thereof), into that number of fully
paid and non-assessable shares of Class A Common Stock (calculated as to each
conversion to the nearest 1/100,000th of a share) obtained by dividing $200.00
by the Conversion Price in effect at such time and by surrender of the
<PAGE>
certificate or certificates representing such shares so to be converted in the
manner provided in Section 3(B).
(B) To convert Convertible Preferred Stock, the holder of one or more
shares of Convertible Preferred Stock to be converted shall surrender the
certificate or certificates representing such shares at any of the offices or
agencies to be maintained for such purpose by the Company accompanied by the
funds, if any, required by the last paragraph of this Section 3(B) and shall
give written notice of conversion in the form provided on such shares of
Convertible Preferred Stock (or such other notice as is acceptable to the
Company) to the Company at such office or agency that the holder elects to
convert the shares of Convertible Preferred Stock specified in said notice. Such
notice shall also state the name or names, together with address or addresses,
in which the certificate or certificates for shares of Class A Common Stock
which shall be issuable in such conversion shall be issued. Each certificate
representing a share of Convertible Preferred Stock surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the name in which such share is registered, be accompanied by
instruments of transfer, in form satisfactory to the Company, duly executed by
the holder or his duly authorized attorney and an amount sufficient to pay any
transfer or similar tax. As promptly as practicable after the surrender of
certificates representing such shares of Convertible Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as aforesaid,
the Company shall issue and shall deliver at such office or agency to such
holder, or as designated in such holder's written instructions, a certificate or
certificates for the number of full shares of Class A Common Stock issuable upon
the conversion of such shares of Convertible Preferred Stock in accordance with
the provisions of this Section 3 and a check or cash in respect of any
fractional interest in a share of Class A Common Stock arising upon such
conversion, as provided in Section 3(C).
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which certificates representing such
shares of Convertible Preferred Stock shall have been surrendered and such
notice (and any applicable instruments of transfer and any required taxes)
received by the Company as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Class A Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
and such conversion shall be at the Conversion Price in effect at such time on
such date, unless the stock transfer books of the Company shall be closed on
that date, in which event such person or persons shall be deemed to have become
such holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall be at
the Conversion Price in effect on the date upon which certificates representing
such shares of Convertible Preferred Stock shall have been surrendered and such
notice received by the Company.
Holders of Convertible Preferred Stock at the close of business on a
Record Date will be entitled to receive an amount equal to the dividend payable
on such shares on the corresponding Dividend Payment Date notwithstanding the
conversion of such shares following such Record Date and prior to such Dividend
Payment Date; provided, however, that Convertible Preferred Stock surrendered
<PAGE>
for conversion during the period between the close of business on any Record
Date and the opening of business on the corresponding Dividend Payment Date
(except shares converted after the issuance of a notice of redemption with
respect to a Redemption Date during such period or coinciding with such Dividend
Payment Date, which will be entitled to such dividend) must be accompanied by
payment of an amount equal to the dividend payable on such shares on such
Dividend Payment Date. A holder of Convertible Preferred Stock on a Record Date
who (or whose transferee) tenders any such shares for conversion into shares of
Class A Common Stock on such Dividend Payment Date will receive the dividend
payable by the Company on such shares of Convertible Preferred Stock on such
date, and the converting holder need not include payment of the amount of such
dividend upon surrender of Convertible Preferred Stock for conversion. Except as
provided herein, the Company will make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the Class A Common Stock issued upon such conversion.
(C) No fractional shares or scrip representing fractions of shares of
Class A Common Stock shall be issued upon conversion of Convertible Preferred
Stock. If more than one share of Convertible Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Class A Common Stock issuable upon conversion thereof shall be
computed on the basis of the Liquidation Preference for each such share so
surrendered. In lieu of any fractional interest in a share of Class A Common
Stock which would otherwise be deliverable upon the conversion of any shares of
Convertible Preferred Stock, the Company shall pay to the holder of such shares
an amount in cash (computed to the nearest cent) equal to the closing price (as
defined in Section 5 hereof) on the Business Day next preceding the day of
conversion multiplied by the fractional interest that otherwise would have been
deliverable upon conversion of such share.
(D) The "Conversion Price" shall mean and be $81.45, subject to
adjustment from time to time by the Company as follows:
(i) In case the Company shall (a) pay a dividend or make a
distribution in shares of Common Stock on its Class A Common Stock, (b)
subdivide its outstanding shares of Class A Common Stock into a greater
number of shares, (c) combine its outstanding shares of Class A Common
Stock into a smaller number of shares, or (d) issue by reclassification
of its Class A Common Stock any shares of capital stock of the Company,
then in each such case the Conversion Price in effect immediately prior
to such action shall be adjusted so that the holder of any share of
Convertible Preferred Stock thereafter surrendered for conversion shall
be entitled to receive the number of shares of Class A Common Stock or
other capital stock of the Company which such holder would have owned
or been entitled to receive immediately following such action had such
share of Convertible Preferred Stock been converted immediately prior
to the occurrence of such event. An adjustment made pursuant to this
subsection (i) shall become effective immediately after the record
date, in the case of a dividend or distribution, or immediately after
the effective date, in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to
this subsection (i), the holder of any share of Convertible Preferred
Stock thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock or shares of
Class A Common Stock and other capital stock of the Company, the Board
<PAGE>
of Directors (whose determination shall be conclusive and shall be
described in a statement filed by the Company with the Transfer Agent)
shall determine the allocation of the adjusted Conversion Price between
or among shares of such classes of capital stock or shares of Class A
Common Stock and other capital stock.
(ii) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Class A Common Stock entitling
them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at
a price per share less than the current market price per share (as
determined pursuant to subsection (iv) of this Section 3(D)) of the
Common Stock (other than pursuant to any stock option, restricted stock
or other incentive or benefit plan or stock ownership or purchase plan
for the benefit of employees, directors or officers or any dividend
reinvestment plan of the Company in effect at the time hereof or any
other similar plan adopted or implemented hereafter), then the
Conversion Price in effect immediately prior thereto shall be adjusted
so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the record date by a
fraction of which the numerator shall be the number of shares of Class
A Common Stock outstanding on the record date plus the number of shares
which the aggregate proceeds to the Company from the exercise of such
rights or warrants would purchase at such current market price, and of
which the denominator shall be the number of shares of Class A Common
Stock outstanding on the record date plus the number of additional
shares of Common Stock offered for subscription or purchase. Such
adjustment shall be made successively whenever any rights or warrants
are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
rights or warrants; provided, however, in the event that all the shares
of Common Stock offered for subscription or purchase are not delivered
upon the exercise of such rights or warrants, upon the expiration of
such rights or warrants the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the numerator and
the denominator of the foregoing fraction and the resulting adjustment
been made based upon the number of shares of Common Stock actually
delivered upon the exercise of such rights or warrants rather than upon
the number of shares of Common Stock offered for subscription or
purchase. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less
than such current market price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights
or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed by the Company
with the Transfer Agent).
(iii) In case the Company shall, by dividend or otherwise,
distribute to all holders of its outstanding Class A Common Stock any
capital stock (other than Common Stock), evidences of its indebtedness
or assets or rights or warrants to subscribe for or purchase securities
of the Company (excluding rights and warrants referred to in subsection
(ii) of this Section 3(D) and dividends or distributions payable in
stock for which adjustment is made pursuant to subsection (i) of this
<PAGE>
Section 3(D) and dividends and distributions paid in cash out of the
retained earnings of the Company and distributions upon mergers or
consolidations to which Section 3(H) applies), then in each such case
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effective
immediately prior to the record date of such distribution by a fraction
of which the numerator shall be the current market price per share as
determined pursuant to subsection (iv) of this Section 3(D) of the
Class A Common Stock less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be
conclusive and shall be described in a statement filed by the Company
with the Transfer Agent) of the portion of the capital stock or assets
or the evidences of indebtedness or assets so distributed to the holder
of one share of Class A Common Stock or of such subscription rights or
warrants applicable to one share of Class A Common Stock, and of which
the denominator shall be such current market price per share of Class A
Common Stock. Such adjustment shall become effective immediately after
the record date for the determination of stockholders entitled to
receive such distribution.
The occurrence of a distribution or the occurrence of any
other event as a result of which holders of Convertible Preferred Stock
shall not be entitled to receive rights, including exchange rights (the
"Rights"), pursuant to any stockholders protective rights agreement
(the "Rights Agreement") that may be adopted by the Company as if such
holders had converted such shares into Class A Common Stock immediately
prior to the occurrence of such distribution or event shall not be
deemed a distribution of securities for the purpose of any Conversion
Price adjustment pursuant to this subparagraph (iii) or otherwise give
rise to any Conversion Price adjustment pursuant to this Section 3;
provided, however, that in lieu of any adjustment to the Conversion
Price as a result of any such a distribution or occurrence, the Company
shall make provision so that Rights, to the extent issuable at the time
of conversion of any shares of Convertible Preferred Stock into shares
of Class A Common Stock, shall issue and attach to such shares of Class
A Common Stock then issued upon conversion in the amount and manner and
to the extent and as provided in the Rights Agreement in respect of
issuances at the time of Class A Common Stock other than upon
conversion.
(iv) For the purpose of any computation under subsections (ii)
and (iii) of this Section 3(D), the current market price per share of
Class A Common Stock on any date shall be deemed to be the average of
the closing price (as defined in Section 5(B) hereof) of the Class A
Common Stock for the shorter of (a) 20 consecutive trading days (as
defined in Section 5) ending on the last full trading day prior to the
Time of Determination or (b) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights
or warrants or such distribution through such last full trading day
prior to the Time of Determination. For purposes of the foregoing, the
term "Time of Determination" shall mean the time and date of the
earlier of (I) the record date for determining stockholders entitled to
receive the rights, warrants or distributions referred to in Section
3(D)(ii) and (iii) or (II) the commencement of "ex-dividend" trading on
the exchange or market referred to in the definition of "closing
price."
<PAGE>
For the purpose of any computation under subsections (ii) and
(iii) of this Section 3(D), the current market price per share of Class
B Common Stock on any date shall be as determined by an independent
investment banking or appraisal firm of recognized national standing.
(v) In any case in which this Section 3(D) shall require that
an adjustment be made immediately following a record date or an
effective date the Company may elect to defer (but only until the
filing by the Company with the Transfer Agent of the certificate
required by subsection (vii) of this Section 3(D)) issuing to the
holder of any share of Convertible Preferred Stock converted after such
record date or effective date the shares of Class A Common Stock
issuable upon such conversion over and above the shares of Class A
Common Stock issuable upon such conversion on the basis of the
Conversion Price prior to adjustment, and paying to such holder any
amount of cash in lieu of a fractional share.
(vi) Notwithstanding anything to the contrary contained in
this Section 3, no adjustment in the Conversion Price shall be required
to be made unless such adjustment would require an increase or decrease
of at least one percent of such price; provided, however, that any
adjustment which by reason of this subsection (vi) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 3(D) shall
be made to the nearest cent or to the nearest 1/100,000th of a share,
as the case may be. Anything in this Section 3(D) to the contrary
notwithstanding, the Company shall be entitled to make such reduction
in the Conversion Price, in addition to those required by this Section
3(D), as it in its discretion shall determine to be advisable in order
that any stock dividend, subdivision of shares, distribution of rights
to purchase stock or securities, or distribution of securities
convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable to the recipients.
Except as set forth in subsections (i), (ii) and (iii) above, the
Conversion Price shall not be adjusted for the issuance of Class A
Common Stock, or any securities convertible into or exchangeable for
Class A Common Stock or carrying the right to purchase any of the
foregoing, in exchange for cash, property or services.
(vii) Whenever the Conversion Price is adjusted as herein
provided, (A) the Company shall promptly file with the Transfer Agent a
certificate setting forth the Conversion Price after such adjustment
and a brief statement of the facts requiring such adjustment and the
manner of computing the same, which certificate shall be conclusive
evidence of the correctness of such adjustment, and (B) the Company
shall also mail or cause to be mailed by first class mail, postage
prepaid, as soon as practicable to each holder of record of shares of
Convertible Preferred Stock a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion Price. The
Transfer Agent shall not be under any duty or responsibility with
respect to the certificate required by this subsection (vii) except to
exhibit the same to any holder of shares of Convertible Preferred Stock
who requests to inspect it.
<PAGE>
(viii) In the event that at any time, as a result of an
adjustment made pursuant to subsection (i) of this Section 3(D), the
holder of any share of Convertible Preferred Stock thereafter
surrendered for conversion shall become entitled to receive any shares
of the Company other than shares of Class A Common Stock, thereafter
the Conversion Price of such other shares so receivable upon conversion
of any share of Convertible Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Class A
Common Stock contained in this Section.
(ix) The Company from time to time may decrease the Conversion
Price by any amount for any period of time if the period is at least 20
days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Company shall mail to holders of
record of shares of Convertible Preferred Stock a notice of the
decrease at least 15 days before the date the decreased Conversion
Price takes effect, and such notice shall state the decreased
Conversion Price and the period it will be in effect.
(E) In Case:
(i) the Company shall take any action which would require an
adjustment in the Conversion Price pursuant to Section 3(D); or
(ii) the Company shall authorize the granting to the holders
of its Class A Common Stock generally of rights or warrants to
subscribe for or purchase any shares of stock of any class or of any
other rights (other than Rights to which the second paragraph of
subparagraph (D)(iii) of this Section 3 applies); or
(iii) there shall be any reorganization or reclassification of
the Class A Common Stock (other than an event to which subparagraph
(D)(i) of this Section 3 applies) or any merger or consolidation to
which the Company is a party or any sale or transfer of all or
substantially all of the property and assets of the Company, in each
case for which approval of any stockholders of the Company is required;
or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then in each such case the Company shall cause to be given to the holders of
shares of Convertible Preferred Stock and the Transfer Agent as promptly as
possible, but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating (i) the date on which a record is to be
taken for the purpose of such action or granting of rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Class A Common
Stock of record to be entitled to such distribution, rights or warrants are to
be determined, or (ii) the date on which such reorganization, reclassification,
merger, consolidation, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it is expected
that holders of Class A Common Stock of record shall be entitled to exchange
their shares of Class A Common Stock for securities, cash or other property
<PAGE>
deliverable upon such reorganization, reclassification, merger, consolidation,
sale, transfer, dissolution, liquidation or winding-up. Failure to give such
notice or any defect therein shall not affect the legality or validity or the
proceedings described in subsection (i), (ii), (iii) or (iv) of this Section
3(E).
(F) The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
shares of Class A Common Stock or its issued shares of Class A Common Stock held
in its treasury, or both, for the purpose of effecting conversions of shares of
Convertible Preferred Stock, the full number of shares of Class A Common Stock
deliverable upon the conversion of all outstanding shares of Convertible
Preferred Stock not theretofore converted and on or before (and as a condition
of) taking any action that would cause an adjustment of the Conversion Price
resulting in an increase in the number of shares of Class A Common Stock
deliverable upon conversion above the number thereof previously reserved and
available therefor, the Company shall take all such action so required. For
purposes of this Section 3(F), the number of shares of Class A Common Stock
which shall be deliverable upon the conversion of all outstanding shares of
Convertible Preferred Stock shall be computed as if at the time of computation
all outstanding shares of Convertible Preferred Stock were held by a single
holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Class A
Common Stock deliverable upon conversion of the shares of Convertible Preferred
Stock, the Company shall take any corporate action (including shareholder
action) which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Class A Common Stock at such adjusted Conversion Price.
(G) The Company shall pay any and all documentary stamp, issue or
transfer taxes, and any other similar taxes payable in respect of the issue or
delivery of shares of Class A Common Stock upon conversion of shares of
Convertible Preferred Stock pursuant hereto; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Class A Common Stock in
a name other than that of the holder of the shares of Convertible Preferred
Stock to be converted and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Company the
amount of any such tax or has established, to the satisfaction of the Company,
that such tax has been paid.
(H) Notwithstanding any other provision herein to the contrary, in case
of any merger or consolidation to which the Company is a party (other than a
merger or consolidation in which the Company is the continuing entity and in
which the Class A Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, or the securities or other property of
another entity), or in the case of any sale or transfer of all or substantially
all of the Company's property and assets to another entity, or in the case of
any statutory exchange of securities with another corporation (other than in
connection with a merger or acquisition), there will be no adjustment of the
Conversion Price, and lawful provision shall be made by the entity formed by
such consolidation or the entity whose securities, cash or other property will
<PAGE>
immediately after the merger or consolidation be owned, by virtue of the merger
or consolidation, by the holders of Class A Common Stock immediately prior to
the merger or consolidation, or the entity which shall have acquired such assets
of the Company, such that each share of Convertible Preferred Stock then
outstanding will, without the consent of the holder thereof become convertible
into the kind and amount of securities, cash or other property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of Class A Common Stock into which such share of Convertible Preferred Stock was
convertible immediately prior to such merger, consolidation, sale or transfer
assuming such holder of Class A Common Stock did not exercise his rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such merger, consolidation, sale or transfer. In the case of a
cash merger of the Company into another entity or any other cash transaction of
the type mentioned in this Section 3(H), each share of Convertible Preferred
Stock will thereafter be convertible at the Conversion Price in effect at such
time into the same amount of cash per share into which each share of Convertible
Preferred Stock would have been convertible had such share been converted into
Class A Common Stock immediately prior to the effective date of such cash merger
or transaction.
The above provisions of this Section 3(H) shall similarly apply to
successive mergers, consolidations, sales or transfers.
(I) The Company covenants that all shares of Class A Common Stock which
may be delivered upon conversion of shares of Convertible Preferred Stock will
upon delivery be duly and validly issued and fully paid and non-assessable.
The Company covenants that if any shares of Class A Common Stock to be
provided for the purpose of conversion of shares of Convertible Preferred Stock
hereunder require registration with or approval of any governmental authority
under any Federal or State law before such shares may be validly issued upon
conversion, the Company will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.
The Company further covenants that so long as the Class A Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or the Nasdaq National Market, the Company will, if permitted by the
rules of such exchange or market, list and keep listed so long as the Class A
Common Stock shall be so listed on such exchange or market, all Class A Common
Stock issuable upon conversion of the shares of Convertible Preferred Stock.
4. Liquidation Rights. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, subject to the rights of the Company's
creditors and holders of Senior Equity Securities, each holder of shares of the
Convertible Preferred Stock will be entitled to payment out of the assets of the
Company available for distribution of an amount equal to the Liquidation
Preference per share of Convertible Preferred Stock held by such holder, plus an
amount equal to accrued and unpaid dividends, if any, to the date fixed for
<PAGE>
liquidation, dissolution or winding-up before any distribution is made on any
Junior Securities, including, without limitation, the Common Stock. After
payment in full of the Liquidation Preference and an amount equal to all accrued
and unpaid dividends, if any, to which holders of Convertible Preferred Stock
are entitled, such holders will not be entitled to any further participation in
any distribution of assets of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to the Convertible Preferred Stock, the Preferred Stock and any Parity
Securities (including the Series B Exchangeable Preferred Stock) are not paid in
full, the holders of the Convertible Preferred Stock, the Preferred Stock and
any Parity Securities (including the Series B Exchangeable Preferred Stock) will
share equally and ratably in any distribution of assets of the Company in
proportion to the full liquidation preference and accumulated and unpaid
dividends, if any, to which each is entitled. However, 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
Company, or the consolidation or merger of the Company with or into one or more
Persons will not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding-up of the Company, unless such sale, conveyance, exchange
or transfer shall be in connection with a liquidation, dissolution or winding-up
of the business of the Company.
The holder of any shares of Convertible Preferred Stock shall not be
entitled to receive any payment owed for such shares under this Section 4 until
such holder shall cause to be delivered to the Company (i) the certificate(s)
representing such shares of Convertible Preferred Stock and (ii) transfer
instrument(s) satisfactory to the Company and sufficient to transfer such shares
of Convertible Preferred Stock to the Company free of any adverse interest. As
in the case of the Redemption Price referred to below, no interest shall accrue
on any payment upon liquidation after the date thereof.
5. Optional Redemption.
(A) The Company may not redeem the Convertible Preferred Stock prior to
May 1, 2002. Subject to the requirement of legally available funds therefor, the
Convertible Preferred Stock may be redeemed, in whole or from time to time in
part, at the option of the Company on or after May 1, 2002, on any date set by
the Board of Directors, for shares of Class A Common Stock at a redemption price
of $206.00 per share, or for cash at redemption price of $200.00 per share (in
each case subject to adjustment as provided for in Section 7 hereof) plus, in
each case, an amount equal to all dividends on the Convertible Preferred Stock
accrued and unpaid thereon, whether or not declared or due, to the date fixed
for redemption, such sum being hereinafter referred to as the "Redemption Price"
(subject to the right of the holder of record of shares of Convertible Preferred
Stock on a Record Date to receive the dividend due on such shares of Convertible
Preferred Stock on the corresponding Dividend Payment Date).
(B) In the event that the Company elects to redeem the Convertible
Preferred Stock with shares of Class A Common Stock, the Company shall issue in
payment of the Redemption Price for each share of Convertible Preferred Stock to
be redeemed such number of shares of Class A Common Stock as equals (x) the
then-current Redemption Price of the Convertible Preferred Stock, divided by (y)
the market price (the "Market Price") of the Class A Common Stock. The Market
Price shall be equal to the lower of (i) the average of the daily closing prices
of the Class A Common Stock for the 20 consecutive trading days immediately
preceding the first Business Day immediately preceding the date of the
<PAGE>
applicable redemption notice, and (ii) the closing price of the Class A Common
Stock on the trading day immediately preceding the first Business Day
immediately preceding the date of the applicable redemption notice.
The "closing price" for each day shall be the last reported sale price
regular way of the Class A Common Stock on the New York Stock Exchange or, if
the Class A Common Stock is not listed on The New York Stock Exchange, the
average of the closing sale prices on such day of the Class A Common Stock on
all domestic exchanges on which the shares of Class A Common Stock may at the
time be listed, or if there have been no sales on any such exchange on such day,
the average of the highest bid and lowest asked prices of the Class A Common
Stock on all such exchanges or, if on such day such shares of Class A Common
Stock shall not be so listed, the average of the comparative bid and asked
prices quoted for the Class A Common Stock in the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System as of 4:00 P.M.,
New York City time on such day, or if such shares shall not be quoted in the
NASDAQ System, the average of the high and low bid and asked price of the Class
A Common Stock on such day in the domestic over-the-counter market as reported
by the National Quotation Bureau, Incorporated, or any other successor
organization. If at any time such shares of Class A Common Stock are not listed
on any domestic exchange or quoted in the NASDAQ System or the domestic
over-the-counter market, the Market Price shall be the fair market value thereof
determined by the Board of Directors in good faith. For the purposes of this
Section 5, "trading day" shall mean a day on which the securities exchange
specified for purposes of this Section 5 shall be open for business or, if the
shares of Class A Common Stock shall not be listed on such exchange for such
period, a day with respect to which quotations of the character referred to in
the next preceding sentence shall be reported. In lieu of any fractional share
of Class A Common Stock which would otherwise be issued upon any redemption of
Convertible Preferred Stock, the Company shall pay a cash adjustment in respect
of such fractional interest in an amount in cash (computed to the nearest cent)
equal to the Market Price multiplied by the fractional interest to the nearest
1/1,000th of a percent that otherwise would have been deliverable upon such
redemption of such Convertible Preferred Stock.
(C) In case of the redemption of less than all of the then outstanding
Convertible Preferred Stock, the shares of Convertible Preferred Stock to be
redeemed shall be redeemed pro rata or by lot or in such other manner as the
Board of Directors may determine. Notwithstanding the foregoing, the Company
shall not redeem less than all of the Convertible Preferred Stock at any time
outstanding until all dividends accrued and in arrears upon all Convertible
Preferred Stock then outstanding shall have been paid for the current and all
past dividend periods.
(D) Not more than 60 nor less than 30 days prior to the date specified
therein for redemption (the "Redemption Date"), notice by first class mail,
postage prepaid, shall be given to each holder of record of the Convertible
Preferred Stock to be redeemed, at such holder's address as it shall appear upon
the stock transfer books of the Company. Each such notice of redemption shall
specify the date fixed for redemption, the Redemption Price, whether the
Convertible Preferred Stock will be redeemed for cash or Class A Common Stock,
the place or places of payment, that delivery of cash or shares of Class A
Common Stock will be made upon presentation and surrender of the certificate(s)
evidencing the shares of Convertible Preferred Stock to be redeemed, that on and
after the redemption date, dividends will cease to accrue on such shares, the
<PAGE>
then effective Conversion Price pursuant to Section 3 and that the right of
holders to convert shall terminate at the close of business on the date
immediately prior to the redemption date (unless the Company defaults in the
payment of the Redemption Price).
(E) Any funds deposited with a bank or trust company for the purpose of
redeeming Convertible Preferred Stock shall be irrevocable except that:
(i) the Company 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 Company and
unclaimed by the holders of the Convertible 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 thereto, to the Company, and after such repayment, the holders
of the shares entitled to the funds so repaid to the Company shall look
only to the Company for payment without interest or other earnings.
(F) Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Convertible
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Convertible Preferred Stock. On or after the date fixed
for redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate evidencing such shares to the Company
at the place designated in such notice and shall thereupon be entitled to
receive delivery of cash or shares of Class A Common Stock as herein provided.
If less than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.
If, on the date fixed for redemption, shares of Class A Common Stock and funds
necessary for the redemption shall be available therefor and shall have been
irrecoverably deposited or set aside, then, notwithstanding that the
certificates evidencing any shares so called for redemption shall not have been
surrendered the dividends with respect to the shares so called shall cease to
accrue after the date fixed for redemption, the shares shall no longer be deemed
outstanding, the holders thereof shall cease to be holders of Convertible
Preferred Stock, and all rights whatsoever with respect to the shares so called
for redemption (except the right of the holders to receive delivery of cash or
shares of Class A Common Stock as herein provided without interest or adjustment
upon surrender of their certificates representing shares of Convertible
Preferred Stock) shall terminate. At the close of business on the redemption
date, each holder of Convertible Preferred Stock so redeemed (unless the Company
defaults on its obligations to deliver cash or shares of Class A Common Stock)
shall be, without any further action, deemed a holder of cash or the number of
shares of Class A Common Stock for which such Convertible Preferred Stock is
redeemable.
(G) The shares of Convertible Preferred Stock shall not be subject to
the operation of any purchase, retirement, mandatory redemption or sinking fund.
<PAGE>
(H) The holder of any shares of Convertible Preferred Stock redeemed
upon any exercise of the Company's redemption right shall not be entitled to
receive cash or shares of Class A Common Stock for such shares until such holder
shall cause to be delivered to the place specified in the notice given with
respect to such redemption (i) the certificate(s) representing such shares of
Convertible Preferred Stock redeemed and (ii) transfer instrument(s)
satisfactory to the Company and sufficient to transfer such shares of
Convertible Preferred Stock to the Company free of any adverse interest.
(I) All shares of Class A Common Stock which may be delivered upon
redemption of the Convertible Preferred Stock will upon delivery be duly and
validly issued and fully paid and non-assessable, and prior to giving any notice
of redemption the Company shall take any corporate action necessary therefor.
(J) In the event that any shares of Convertible Preferred Stock shall
be converted into Class A Common Stock prior to any Redemption Date pursuant to
Section 3, then (i) the Company shall not have the right to redeem such shares
and (ii) shares of Class A Common Stock and any funds which shall have been
deposited for the payment of the Redemption Price for such shares of Convertible
Preferred Stock shall be returned to the Company immediately after such
conversion (subject to declared dividends payable pursuant to Section 3(B)
hereof).
6. Voting Rights
(A) The holders of record of shares of the Convertible Preferred Stock
shall have no voting rights, except as required by law and as hereinafter
provided in this Section 6. In exercising any such voting rights, each
outstanding share of Convertible Preferred Stock will be entitled to one vote,
excluding shares of its own capital stock belonging to the Company or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
Company, which shares will have no voting rights.
(B) Whenever dividends on the Convertible Preferred Stock shall be in
arrears in an amount equal to at least six quarterly dividends (whether or not
consecutive), (i) the number of members of the Board of Directors shall be
increased by two, effective as of the time of election of such directors as
hereinafter provided, and (ii) the holders of the Convertible Preferred Stock
(voting separately as a class with all other affected classes or series of
outstanding stock on a parity as to dividends with the Convertible Preferred
Stock upon which like voting rights have been conferred and are exercisable, but
expressly excluding the Preferred Stock) will have the exclusive right to vote
for and elect such two additional directors of the Company at any meeting of
stockholders of the Company at which directors are to be elected held during the
period such dividends remain in arrears. The right of the holders of the
Convertible Preferred Stock to vote for such two additional directors shall
terminate when all accrued and unpaid dividends on the Convertible Preferred
Stock have been declared and paid or set aside for payment. The term of office
of all directors so elected shall terminate immediately upon the termination of
the right of the holders of the Convertible Preferred Stock and such parity
securities to vote for such two additional directors.
<PAGE>
The foregoing right of the holders of the Convertible Preferred Stock
with respect to the election of two directors may be exercised at any annual
meeting of stockholders or at any special meeting of stockholders held for the
purpose of electing directors. If the right to elect directors shall have
accrued to the holders of the Convertible Preferred Stock more than 90 days
preceding the date established for the next annual meeting of stockholders, the
Board of Directors shall, within 20 days after the delivery to the Company at
its principal office of a written request for a special meeting signed by the
holders of at least 25% of the Convertible Preferred Stock then outstanding,
call a special meeting of the holders of the Convertible Preferred Stock to be
held within 60 days after the delivery of such request for the purpose of
electing such additional directors.
The holders of the Convertible Preferred Stock and any parity
securities referred to above voting as a class shall have the right to remove
without cause at any time and replace any directors such holders have elected
pursuant to this Section 6, and such directors shall not be removed without
cause except by such holders.
(C) So long as the Convertible Preferred Stock is outstanding, the
Company shall not, without the affirmative vote of the holders of at least
66-2/3 percent of all outstanding Convertible Preferred Stock (unless the vote
of a greater percentage is required by applicable law or the Certificate of
Incorporation), voting separately as a class, amend, alter or repeal (by merger,
consolidation or otherwise) any provision of the Certificate of Incorporation or
the By-laws of the Company, as amended, so as to affect materially and adversely
the relative rights, preferences, qualifications, limitations or restrictions of
the Convertible Preferred Stock. Except as otherwise set forth herein or in the
Certificate of Incorporation or as otherwise required by law, (i) the creation,
authorization or issuance of any shares or series of preferred stock or (ii) the
increase or decrease in the amount of authorized capital stock of any class or
series, including any preferred stock, shall not require the consent of the
holders of Convertible Preferred Stock and shall not be deemed to affect
adversely the rights, preferences, privileges or voting rights of the
Convertible Preferred Stock.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Convertible Preferred Stock shall
have been redeemed or called for redemption upon proper notice and sufficient
shares of Class A Common Stock, if needed, shall have been reserved by the
Company to effect such redemption.
7. Adjustments. The Liquidation Preference and the Redemption Price set
forth herein shall each be subject to equitable adjustment whenever there shall
occur a stock split, combination, reclassification or other similar event
involving the Convertible Preferred Stock. Such adjustments shall be determined
in good faith by the Board of Directors and submitted by the Board of Directors
to the Transfer Agent.
8. Exclusion of Other Rights. Except as may otherwise be required by
law, the shares of Convertible 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 Designation or the
<PAGE>
Certificate of Incorporation. The shares of Convertible Preferred Stock shall
have no preemptive or subscription rights.
9. 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.
10. Severability of Provisions. If any of the voting powers,
preferences and relative, participating, optional and other special rights of
the Convertible Preferred Stock and qualifications, limitations and restrictions
thereof set forth herein 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 Convertible
Preferred Stock and qualifications, limitations and restrictions thereof set
forth herein which can be given effect without the invalid, unlawful or
unenforceable voting powers, preferences and relative, participating, optional
and other special rights of Convertible 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 Convertible 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 Convertible Preferred Stock
and qualifications, limitations and restrictions thereof unless so expressed
herein.
11. Reissuance of Convertible Preferred Stock. Shares of Convertible
Preferred Stock that (i) have not been issued on or before June 15, 1999 or (ii)
have been issued and reacquired in any manner, including shares purchased or
redeemed or exchanged or converted, shall (upon compliance with any applicable
provisions of the laws of Delaware) have the status of authorized but unissued
shares of preferred stock of the Company undesignated as to series and may be
designated or redesignated and issued or reissued, as the case may be, as part
of any series of preferred stock of the Company, provided that any issuance of
such shares as Convertible Preferred Stock must be in compliance with the terms
hereof.
12. Mutilated or Missing Convertible Preferred Stock Certificates. If
any of the Convertible Preferred Stock certificates shall be mutilated, lost,
stolen or destroyed, the Company shall issue, in exchange and in substitution
for and upon cancellation of the mutilated Convertible Preferred Stock
certificate, or in lieu of and substitution for the Convertible Preferred Stock
certificate lost, stolen or destroyed, a new Convertible Preferred Stock
certificate of like tenor and representing an equivalent amount of shares of
Convertible Preferred Stock, but only upon receipt of evidence of such loss,
theft or destruction of such Convertible Preferred Stock certificate and
indemnity, if requested, satisfactory to the Company and the Transfer Agent.
13. Certain Definitions. As used in this Certificate of Designation,
the following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:
<PAGE>
"Business Day" means any day except a Saturday, a Sunday, or any day on
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Transfer Agent" shall be the American Stock Transfer & Trust Company
unless and until a successor is selected by the Company, and then such
successor.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed by James Brown, Vice President of the Company, and attested by Colin
Higgin, its Assistant Secretary, this 30th day of April, 1999.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James Brown
Name: James Brown
Title: Vice President
ATTEST:
By: /s/ Colin Higgin
Name: Colin Higgin
Title: Assistant Secretary
Exhibit 4.01
ADELPHIA COMMUNICATIONS CORPORATION,
AS ISSUER
TO
BANK OF MONTREAL TRUST COMPANY,
AS TRUSTEE
Senior Debt
Indenture
DATED AS OF APRIL 28, 1999
<PAGE>
<TABLE>
<CAPTION>
ADELPHIA COMMUNICATIONS CORPORATION
RECONCILIATION AND TIE BETWEEN TRUST
INDENTURE ACT OF 1939, AS AMENDED
AND INDENTURE, DATED AS OF APRIL 28, 1999
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
<S> <C>
Section 310 (a) (1)....................................................6.9
(a) (2)....................................................6.9
(a) (3).........................................Not Applicable
(a) (4).........................................Not Applicable
(b)..................................................6.8, 6.10
Section 311 (a).......................................................6.13
(b).......................................................6.13
Section 312 (a)...............................................7.1, 7.2 (a)
(b)....................................................7.2 (b)
(c)....................................................7.2 (c)
Section 313 (a)....................................................7.3 (a)
(b).............................................Not Applicable
(c)...........................................7.3 (a), 7.3 (b)
(d)....................................................7.3 (b)
Section 314 (a)........................................................7.4
(b).............................................Not Applicable
(c) (1)....................................................1.2
(c) (2)....................................................1.2
(c) (3).........................................Not Applicable
(d).............................................Not Applicable
(e)........................................................1.2
Section 315 (a)....................................................6.1 (a)
(b)........................................................6.2
(c)....................................................6.1 (b)
(d)....................................................6.1 (c)
(d) (1).......................................6.1 (a), 6.1 (c)
(d) (2)................................................6.1 (c)
(d) (3)................................................6.1 (c)
(e).......................................................5.14
Section 316 (a) (1) (A)...............................................5.12
(a) (1) (B)..........................................5.2, 5.13
(a) (2).........................................Not Applicable
(b)........................................................5.8
Section 317 (a) (1)....................................................5.3
(a) (2)....................................................5.4
(b).......................................................10.9
Section 318 (a)........................................................1.7
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART OF THIS INDENTURE.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.......................................1
SECTION1.1.....Definitions...............................................................................1
Act.............................................................................................2
Affiliate.......................................................................................2
Authenticating Agent............................................................................2
Bankruptcy Law..................................................................................2
Board of Directors..............................................................................2
Board Resolution................................................................................2
Business Day....................................................................................2
Capitalized Lease Obligation....................................................................2
Capital Stock...................................................................................3
Commission......................................................................................3
Common Depositary...............................................................................3
Company.........................................................................................3
Company Request.................................................................................3
Company Order...................................................................................3
Corporate Trust Office..........................................................................3
Covenant Defeasance.............................................................................3
Currency Agreement..............................................................................3
Custodian.......................................................................................3
Default.........................................................................................3
Defaulted Interest..............................................................................3
Defeasance......................................................................................3
Dollars.........................................................................................3
Event of Default................................................................................4
Exchange Act....................................................................................4
GAAP............................................................................................4
Holder..........................................................................................4
Security holder.................................................................................4
Indebtedness....................................................................................4
Indenture.......................................................................................4
Interest........................................................................................4
Interest Payment Date...........................................................................5
Interest Swap Obligations.......................................................................5
Lien............................................................................................5
Maturity........................................................................................5
Officer.........................................................................................5
Officer's Certificate...........................................................................5
Original Issue Discount Security................................................................5
<PAGE>
Outstanding.....................................................................................5
Paying Agent....................................................................................6
Person..........................................................................................6
Place of Payment................................................................................6
Redemption Date.................................................................................6
Redemption Price................................................................................6
Registered Security.............................................................................6
Regular Record Date.............................................................................6
Responsible Officer.............................................................................7
Securities......................................................................................7
Significant Subsidiary..........................................................................7
Special Record Date.............................................................................7
Stated Maturity.................................................................................7
Subsidiary......................................................................................7
Trust Indenture Act.............................................................................7
Trustee.........................................................................................7
U.S. Depositary.................................................................................8
U.S. Government Obligations.....................................................................8
Vice President..................................................................................8
SECTION1.2. Compliance Certificates and Opinions.........................................................8
SECTION1.3. Form of Documents Delivered to Trustee.......................................................9
SECTION1.4. Acts of Holders..............................................................................9
SECTION1.5. Notices, Etc., to Trustee and Company.......................................................11
SECTION1.6. Notice to Holders; Waiver...................................................................11
SECTION1.7. Conflict with Trust Indenture Act...........................................................12
SECTION1.8. Effect of Headings and Table of Contents....................................................12
SECTION1.9. Successors and Assigns......................................................................12
SECTION1.10. Separability Clause........................................................................12
SECTION1.11. Benefits of Indenture......................................................................12
SECTION1.12. Governing Law..............................................................................12
SECTION1.13. Legal Holidays.............................................................................12
SECTION1.14. No Recourse Against Others.................................................................13
ARTICLE 2 SECURITY FORMS................................................................................13
SECTION2.1. Forms Generally.............................................................................13
SECTION2.2. Form of Face of Security....................................................................13
SECTION2.3. Form of Reverse of Security.................................................................16
SECTION2.4. Form of Trustee's Certificate of Authentication.............................................21
SECTION2.5. Securities in Global Form...................................................................22
SECTION2.6. CUSIP Number................................................................................22
SECTION2.7. Form of Legend for the Securities in Global Form............................................23
ARTICLE 3 THE SECURITIES................................................................................23
SECTION3.1. Amount Unlimited; Issuable in Series........................................................23
<PAGE>
SECTION3.2. Denominations...............................................................................26
SECTION3.3. Execution, Authentication, Delivery and Dating..............................................26
SECTION3.4. Temporary Securities........................................................................28
SECTION3.5. Registration, Registration of Transfer and Exchange.........................................29
SECTION3.6. Mutilated, Destroyed, Lost and Stolen Securities............................................31
SECTION3.7. Payment of Interest; Interest Rights Preserved..............................................31
SECTION3.8. Persons Deemed Owners.......................................................................33
SECTION3.9. Cancellation................................................................................33
SECTION3.10. Computation of Interest....................................................................34
ARTICLE 4 SATISFACTION AND DISCHARGE....................................................................34
SECTION4.1. Satisfaction and Discharge of Indenture.....................................................34
SECTION4.2. Application of Trust Money..................................................................35
ARTICLE 5 REMEDIES.....................................................................................35
SECTION5.1. Events of Default...........................................................................35
SECTION5.2. Acceleration of Maturity; Rescission and Annulment..........................................37
SECTION5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.............................38
SECTION5.4. Trustee May File Proofs of Claim............................................................39
SECTION5.5. Trustee May Enforce Claims Without Possession of Securities.................................39
SECTION5.6. Application of Money Collected..............................................................40
SECTION5.7. Limitation on Suits.........................................................................40
SECTION5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest...................41
SECTION5.9. Restoration of Rights and Remedies..........................................................41
SECTION5.10. Rights and Remedies Cumulative.............................................................41
SECTION5.11. Delay or Omission Not Waiver...............................................................42
SECTION5.12. Control by Holders.........................................................................42
SECTION5.13. Waiver of Past Defaults....................................................................42
SECTION5.14. Undertaking for Costs......................................................................43
ARTICLE 6 THE TRUSTEE..................................................................................43
SECTION6.1. Certain Duties and Responsibilities of the Trustee..........................................43
SECTION6.2. Notice of Defaults..........................................................................43
SECTION6.3. Certain Rights of Trustee...................................................................44
SECTION6.4. Not Responsible for Recitals or Issuance of Securities......................................45
SECTION6.5. May Hold Securities.........................................................................45
SECTION6.6. Money Held in Trust.........................................................................45
SECTION6.7. Compensation and Reimbursement..............................................................45
SECTION6.8. Disqualification; Conflicting Interests.....................................................46
SECTION6.9. Corporate Trustee Required; Eligibility.....................................................46
SECTION6.10. Resignation and Removal; Appointment of Successor..........................................47
SECTION6.11. Acceptance of Appointment by Successor or Additional Trustees..............................48
SECTION6.12. Merger, Conversion, Consolidation or Succession to Business................................49
<PAGE>
SECTION6.13. Preferential Collection of Claims Against Company..........................................50
SECTION6.14. Appointment of Authenticating Agent........................................................50
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............................................52
SECTION7.1. Company to Furnish Trustee Names and Addresses of Holders...................................52
SECTION7.2. Preservation of Information; Communications to Holders......................................52
SECTION7.3. Reports by Trustee..........................................................................53
SECTION7.4. Reports by Company..........................................................................53
ARTICLE 8 CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER...............................................54
SECTION8.1. When Company May Merge, Etc.................................................................54
SECTION8.2. Opinion of Counsel..........................................................................55
SECTION8.3. Successor Corporation Substituted...........................................................55
ARTICLE 9 SUPPLEMENTAL INDENTURES......................................................................55
SECTION9.1. Supplemental Indentures Without Consent of Holders..........................................55
SECTION9.2. Supplemental Indentures with Consent of Holders.............................................56
SECTION9.3. Execution of Supplemental Indentures........................................................58
SECTION9.4. Effect of Supplemental Indentures...........................................................58
SECTION9.5. Conformity with Trust Indenture Act.........................................................58
SECTION9.6. Reference in Securities to Supplemental Indentures..........................................58
ARTICLE 10 COVENANTS...................................................................................58
SECTION10.1. Payments of Securities.....................................................................58
SECTION10.2. Maintenance of Office or Agency............................................................59
SECTION10.3. Corporate Existence........................................................................59
SECTION10.4. Payment of Taxes and Other Claims..........................................................59
SECTION10.5. Compliance Certificates....................................................................60
SECTION10.6. Commission Reports.........................................................................60
SECTION10.7. Waiver of Stay, Extension or Usury Laws....................................................60
SECTION10.8. Money for Securities Payments to Be Held in Trust..........................................61
ARTICLE 11 REDEMPTION OF SECURITIES....................................................................62
SECTION11.1. Applicability of Article...................................................................62
SECTION11.2. Election to Redeem; Notice to Trustee......................................................62
SECTION11.3. Selection by Trustee of Securities to Be Redeemed..........................................63
SECTION11.4. Notice of Redemption.......................................................................63
SECTION11.5. Deposit of Redemption Price................................................................64
SECTION11.6. Securities Payable on Redemption Date......................................................64
SECTION11.7. Securities Redeemed in Part................................................................65
ARTICLE 12 SINKING FUNDS...............................................................................65
<PAGE>
SECTION12.1. Applicability of Article...................................................................65
SECTION12.2. Satisfaction of Sinking Fund Payments with Securities......................................65
SECTION12.3. Redemption of Securities for Sinking Fund..................................................66
ARTICLE 13 DEFEASANCE AND COVENANT DEFEASANCE..........................................................66
SECTION13.1. Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance.....66
SECTION13.2. Defeasance and Discharge...................................................................66
SECTION13.3. Covenant Defeasance........................................................................67
SECTION13.4. Conditions to Defeasance or Covenant Defeasance............................................67
SECTION13.5. Deposited Money and Government Obligations To Be Held In Trust.............................69
ARTICLE 14 MISCELLANEOUS...............................................................................69
SECTION14.1. Miscellaneous..............................................................................69
</TABLE>
<PAGE>
Senior Debt Indenture (the "Indenture"), dated as of April 28, 1999,
between ADELPHIA COMMUNICATIONS CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company"),
having its principal office at Main at Water Street, Coudersport, Pennsylvania
16915 and BANK OF MONTREAL TRUST COMPANY, a New York banking corporation (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with GAAP;
(4) the word "Including" (and with the correlative meaning "Include") means
including, without limiting the generality of, any description following such
term; and
<PAGE>
(5) the words "Herein," "Hereof" and "Hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" means another Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such first Person.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities or by contract
or otherwise.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company;
provided, however, that when the context refers to actions or resolutions of the
Board of Directors, then the term "Board of Directors" shall also mean any duly
authorized committee of the Board of Directors of the Company or Officer
authorized to act with respect to any particular matter to exercise the power of
the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or regulation to close.
"Capitalized Lease Obligation" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with generally accepted accounting principles, and the
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with such principles; and the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
<PAGE>
"Capital Stock" of any Person shall mean any and all shares, interests,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any preferred stock, but excluding any debt
securities convertible into such equity.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Depositary" has the meaning specified in Section 3.4.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller,
an Assistant Controller, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at Wall Street
Plaza, 88 Pine Street, New York, New York.
"Covenant Defeasance" has the meaning specified in Section 13.3.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
such Person or any of its Restricted Subsidiaries against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 13.2.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 5.1.
<PAGE>
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
"GAAP" means such accounting principles that are generally accepted in
the United States of America as of the date of any computation required
hereunder.
"Holder" or "Security holder" means a Person in whose name a Security
is registered in the Security Register.
"Indebtedness" means, with respect to any Person, at any date, any of
the following, without duplication, (i) any liability, contingent or otherwise,
of such Person (A) 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), (B)
evidenced by a note, bond, debenture or similar instrument or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property), but excluding trade accounts payable arising in the ordinary course
of business; (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
entered into in the ordinary course of business; (iv) all indebtedness of others
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on any asset or property
(including, without limitation, leasehold interests and any other tangible or
intangible property) of such Person, whether or not such indebtedness is assumed
by such Person or is not otherwise such Person's legal liability; provided, that
if the obligations so secured have not been assumed in full by such Person or
are otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien; (v) all indebtedness of
others (including all interest and dividends on any Indebtedness or preferred
stock of any other Person for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed contingently to supply or advance funds; and (vi)
obligations in respect of Currency Agreements and Interest Swap Obligations.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 3.1.
"Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
<PAGE>
"Interest Swap Obligations" shall mean the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries against fluctuations in interest rates.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge or adverse claim affecting title or resulting in an encumbrance
against real or personal property or a security interest of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof other than a lease which is not a Capitalized Lease
Obligation.)
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the Vice Chairman of the
Board, the President, any Senior or Executive Vice President, any Vice
President, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by an Officer and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except: (i)
Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation; (ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; (iii)
Securities which have been paid pursuant to Section 3.6 or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and (iv) Securities which have been defeased
pursuant to Section 13.2; provided, however, that in determining whether the
<PAGE>
Holders of the requisite principal amount of the Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be that portion of the
principal amount thereof that could be declared to be due and payable upon the
occurrence of an Event of Default and the continuation thereof pursuant to the
terms of such Original Issue Discount Security as of the date of such
determination and (b) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company may act as Paying Agent with respect to any Securities
issued hereunder.
"Person" means any individual, corporation, partnership, limited
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.
"Redemption Date," when used with respect to any Security of any series
to be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security of any
series to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Registered Security" means any Security issued hereunder and
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee in its Corporate Trust Office and also means, with
respect to a particular corporate trust matter, any other officer to whom such
<PAGE>
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Significant Subsidiary" means a Subsidiary or Subsidiaries of the
Company possessing assets (including the assets of its own Subsidiaries but
without regard to the Company or any other Subsidiary) having a book value, in
the aggregate, equal to not less than 10% of the book value of the aggregate
assets of the Company and its Subsidiaries calculated on a consolidated basis.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any Person means (i) any Person of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Restricted Subsidiaries of that
Person or a combination thereof, and (ii) any partnership, joint venture or
other Person in which such Person or one or more of the Restricted Subsidiaries
of that Person or a combination thereof has the power to control by contract or
otherwise the board of directors or equivalent governing body or otherwise
controls such entity.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed;
provided, however, that in the event that such Act is amended after such date,
"Trust Indenture Act" means the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
global Securities, the Person designated as U.S. Depositary by the Company
<PAGE>
pursuant to Section 3.1, which must be a clearing agency registered under the
Exchange Act until a successor U.S. Depositary shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "U.S. Depositary"
shall mean or include each Person who is then a U.S. Depositary hereunder, and
if at any time there is more than one such Person, "U.S. Depositary" shall mean
the U.S. Depositary with respect to the Securities of that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America which, in either case, are not
callable or redeemable at the option of the issuer thereof or otherwise subject
to prepayment, and shall also include a depository receipt issued by a New York
Clearing House bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment or interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a 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 or from any amount held by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, other than an action permitted
by Sections 2.5 and 7.4 hereof, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
<PAGE>
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(e) 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 agents 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
<PAGE>
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(f) The fact and date of the execution by any Person of any such instrument or
writing 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.
(g) The ownership of Registered Securities shall be proved by the Security
Register.
(h) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, 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
Security.
(i) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
<PAGE>
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee and received by the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(b) the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
Indenture, attention: Secretary, or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to Holders of
any event, such notice shall be deemed sufficiently given (unless otherwise
herein or in such Security expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders or the validity of the proceedings to which such notice relates.
Where this Indenture or any Security provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or shall be
excluded, as the case may be.
<PAGE>
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws (other than the choice of law provisions) of the State
of New York.
SECTION 1.13. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day or on such other day as may be set out in the Officer's
Certificate pursuant to Section 3.1 at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
SECTION 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Security holder, by accepting
<PAGE>
a Security, waives and releases all such liability. Such waivers and releases
are part of the consideration for the issuance of the Securities.
ARTICLE 2
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be photocopied, printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the Officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 2.2. Form of Face of Security.
(If the Security is an Original Issue Discount Security, insert--FOR
PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION 1273 (a)
(1) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-l(a) WITH RESPECT TO THIS
SECURITY IS _______, THE ISSUE PRICE (AS DEFINED IN TREASURY REGULATION SECTION
1.1273-2) OF THIS SECURITY IS _______, THE ISSUE DATE (AS DEFINED IN SECTION
1275(a)(2) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-2) OF THIS
SECURITY IS _______ AND THE YIELD TO MATURITY OF THIS SECURITY IS _______).
<PAGE>
Adelphia Communications Corporation
-----------------------
No. ________ ($)________
Adelphia Communications Corporation, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or registered
assigns, the principal sum of $_______ on ________. (If the Security is to bear
interest prior to Maturity, insert --, and to pay interest thereon from
_______________ or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, (semi-annually) (quarterly) (monthly) in
arrears on ________ and in each year, commencing _________, at the rate of
_______% per annum, until the principal hereof is paid or made available for
payment (If applicable insert--, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of ________% per annum on any
overdue principal and premium and on any overdue installment of interest). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ________ of (whether or not a Business Day), as the case maybe, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.)
(If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _______% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of _______% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.)
<PAGE>
Payment of the principal of, and premium, if any, and (if applicable,
insert--any such) interest on this Security will be made at the office or agency
of the Company maintained for that purpose in _______, in Dollars (if
applicable, insert--; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_____________________
Adelphia Communications Corporation
By:
Attest:
(SEAL)
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________, 1998 (herein called the
"Indenture"), between the Company and __________________________, (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof (limited in aggregate principal amount to $______). (If
applicable, insert--The Securities of this series are subject to redemption upon
not less than 30 nor more than 45 days' notice by first class mail, (if
applicable, insert--(1) on _______ in any year commencing with the year _______
and ending with the year _______ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, and (2)) at
<PAGE>
any time (on or after _______,), as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount):
If redeemed (on or before _______, _______%, and if redeemed) during
the 12-month period beginning _______ of the years indicated, Year _______
Redemption Price _______ Year _______ Redemption Price and thereafter at a
Redemption Price equal to _______ of the principal amount, together in the case
of any such redemption (if applicable, insert -- (whether through operation of
the sinking fund or otherwise)) with accrued and unpaid interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.)
(If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 45 days' notice by first class
mail, (1) on _______ in any year commencing with the year _______ and ending
with the year through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time (on or after _______), as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below:
If redeemed during a 12-month period beginning _______ of the years
indicated, Redemption Price for Redemption Price for Redemption Through
Redemption Otherwise Operation of the Than Through Operation Year Sinking Fund
of the Sinking Fund and thereafter at a Redemption Price equal to _______ % of
the principal amount, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.)
(Notwithstanding the foregoing, the Company may not, prior to _______
redeem any Securities of this series as contemplated by (clause (2) of) the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than _______% per annum.)
(The sinking fund for this series provides for the redemption on in
each year beginning with the year _______ and ending with the year _______ of
(not less than) $ _______ (("mandatory sinking fund") and not more than $
aggregate principal amount of Securities of this series.) (Securities of this
series acquired or redeemed by the Company otherwise than through (mandatory)
sinking fund payments may be credited against subsequent (mandatory) sinking
fund payments otherwise required to be made--in the (inverse) order in which
<PAGE>
they become due.)
(In the event of redemption of this Security in part only a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.)
(If the Security is not an Original Issue Discount Security, insert --
If any Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.) (If the Security is an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal -- insert formula for determining the
amount.) Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.
This Security is a senior unsecured obligation of the Company and will
rank pari passu in right of payment with all other senior unsecured obligations
of the Company.
This Security is subject to Defeasance as described in the Indenture.
The Indenture may be modified by the Company and the Trustee without consent of
any Holder with respect to certain matters as described in the Indenture. In
addition, the Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall bind such Holder and all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, and premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of authorized denominations and for the same Stated Maturity and
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of ($1,000) and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture imposes certain limitations on the ability of the Company
to, among other things, merge or consolidate with any other Person or sell,
assign, transfer or lease all or substantially all of its properties or assets
(If other covenants are applicable pursuant to the provisions of Section 3.1,
insert here). All such covenants and limitations are subject to a number of
important qualifications and exceptions. The Company must report periodically to
the Trustee on compliance with the covenants in the Indenture.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under this
Security 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 Security,
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
(If applicable, insert -- Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures ("CUSIP"), the
Company has caused CUSIP numbers to be printed on the Securities of this series
as a convenience to the Holders of the Securities of this series. No
representation is made as to the correctness or accuracy of such numbers as
printed on the Securities of this series and reliance may be placed only on the
other identification numbers printed hereon.)
<PAGE>
All capitalized terms used in this Security without definition which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
(Insert assignee's social security or tax I.D. number)
- - ---------
- - ---------
- - ---------
- - ---------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Your Signature:
---------------------- -------------------------
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranty:
---------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Transfer
Agent, which requirements will include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Transfer Agent in
addition to, or in substitution for, STAMP all in
accordance with the Exchange Act.)
Social Security Number or Taxpayer Identification Number:
----------------------
SECTION 2.4. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
as Trustee
By:
Authorized Signature
<PAGE>
SECTION 2.5. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated
by Section 3.1, then, notwithstanding the provisions of Section 3.2, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 3.3 or
Section 3.4. Subject to the provisions of Section 3.3 and, if applicable,
Section 3.4, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel.
The provisions of Section 3.9 shall apply to any Security represented
by a Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of,
premium, if any, and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security.
SECTION 2.6. CUSIP Number.
The Company in issuing Securities of any series may use a "CUSIP"
number, and, if so, the Trustee may use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such series; provided,
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed on the notice or on the
Securities of such series, and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
<PAGE>
promptly notify the Trustee of any change in the CUSIP number of any series of
Securities.
SECTION 2.7. Form of Legend for the Securities in Global Form.
Any Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Common Depositary or
a U.S. Depositary. Unless and until it is exchanged in whole or in part for
Securities in certificated form, this Security may not be transferred except as
a whole by the Common Depositary or a U.S. Depositary or by a nominee of the
Common Depositary or a nominee of the U.S. Depositary as the case may be."
ARTICLE 3
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Sections
3.4, 3.5, 3.6, 9.6 or 11.7);
(3) whether any Securities of the series are to be issuable in permanent global
form with or without coupons and, if so, (i) whether beneficial owners of
interests in any such permanent global security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided in Section 3.5, and (ii) the name of the
Common Depositary (as defined in Section 3.4) or the U.S. Depositary, as the
case may be, with respect to any global security;
<PAGE>
(4) the date or dates on which the principal of the Securities of the series is
payable;
(5) the rate or rates at which the Securities of the series shall bear interest
(including reset rates, if any, and the method by which such rate will be
determined), if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable and the
Regular Record Date for the interest payable on any Interest Payment Date and,
if applicable to such series of Securities, the basis points and United States
Treasury rate(s) and any other rates or other methods to be used in calculating
the reset rate;
(6) the place or places where the principal of (and premium, if any) and
interest on Securities of the series shall be payable and where the Company will
maintain an office or agency where Securities may be presented for registration
of transfer or exchange and the place or places where notices and demands to or
upon the Company in respect of Securities and the Indenture may be made;
(7) the right of the Company, if any, to defer any payment of principal of,
premium, or interest on the Securities of the series, and the maximum length of
any such deferral period which shall not exceed the Stated Maturity for the
final installment of principal on the Securities of such series;
(8) the period or periods within which, the price or prices at which the
currency or currency units and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase Securities of
the series pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or prices
at which, the currency or currency units and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and, where applicable, the obligation of the
Company to select the Securities to be redeemed;
(10) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the portion of the principal
amount of Securities of the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 5.2;
(12) any additions, modifications or deletions in the Events of Default with
respect to Securities of the series, if any, other than those set forth herein;
(13) if either or both of Section 13.2 and Section 13.3 shall be inapplicable to
the Securities of the series (provided that if no such inapplicability shall be
specified, then both Section 13.2 and Section 13.3 shall be applicable to the
<PAGE>
Securities of the series);
(14) if other than U.S. dollars, the currency or currencies or units based on or
related to currencies in which the Securities of such series shall be
denominated and in which payments or principal of, and any premium and interest
on, such Securities shall or may by payable;
(15) additions, modifications or deletions of the Company's covenants with
respect to Securities of the series, if any, other than those set forth herein;
(16) any index or indices used to determine the amount of payments of principal
of any premium, if any, on such securities and the manner in which such amounts
will be determined;
(17) if other than the Trustee, the identity of the Registrar and any Paying
Agent;
(18) the appointment of a Person as a Trustee which meets the requirements of
Section 6.9 with respect to Securities of the series;
(19) any index or indices used to determine the amounts of payments of principal
of an premium, if any, on the Securities and the manner in which such amounts
will be determined;
(20) the terms and conditions of any obligation or right of the Company or a
Holder to exchange or convert Securities into other securities;
(21) any other terms of the series (which terms shall not be inconsistent with
the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officer's Certificate or in any
such Indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series.
SECTION 3.2. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 3.1. In the absence of any such provisions with respect to the
<PAGE>
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any security that
has been duly authenticated and delivered by the Trustee.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through (d) of the Trust Indenture Act) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board
Resolution as permitted by Section 2.1, that such form has been established in
conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 3.1, that such terms have been
established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
<PAGE>
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law); and
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body having
jurisdiction over the Company is required for the execution and delivery of such
Securities by the Company, except such as have been obtained (except that no
opinion need be expressed as to state securities or Blue Sky laws).
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 3.1 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 3.1 or the Company Order and
Opinion of Counsel otherwise required pursuant to the immediately preceding
paragraph at or prior to the time of authentication of each security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first security of such series to be issued.
If the Company shall establish pursuant to Section 3.1 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Company shall execute and the Trustee shall, in accordance
with this Section and the Company Order with respect to the authentication and
delivery of such series, authenticate and deliver one or more global Securities
that (i) shall be in an aggregate amount equal to the aggregate principal amount
specified in such Company Order, (ii) shall be registered in the name of the
Common Depositary or U.S. Depositary, as the case may be, therefor or its
nominee, and (iii) shall be made available for delivery by the Trustee to such
depositary or pursuant to such depositary's instruction.
Each depositary designated pursuant to Section 3.1 must, at the time of
its designation and at all times while it serves as depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
Unless otherwise provided for in the form of security, each security
shall be dated the date of its authentication.
No security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
security shall be conclusive evidence, and the only evidence, that such security
<PAGE>
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary Securities may
be in global form, representing all or a portion of the Outstanding Securities
of such series.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of Section 3.5), if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the office of a depositary or common depositary (the "COMMON
DEPOSITARY") for credit to the respective accounts of the beneficial owners of
such Securities (or to such other accounts as they may direct).
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of registration of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
<PAGE>
Upon surrender for registration of transfer of any security of any
series at the office or agency of the Company in Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified and as subject to the conditions contemplated by
Section 3.1, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that series in aggregate
principal amount equal to the principal amount of such permanent global
security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the Common Depositary or the U.S. Depositary,
as the case may be, and in accordance with instructions given to the Trustee and
the Common Depositary or the U.S. Depositary, as the case may be (which
instructions shall be in writing but need not comply with Section 1.2 or be
accompanied by an Opinion of Counsel), as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or in part, for definitive Securities of the
same series without charge. The Trustee shall authenticate and make available
for delivery, in exchange for each portion of such surrendered permanent global
security, a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
permanent global security to be exchanged which shall be in the form of the
Securities of such series; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Securities of that series selected for
redemption under Section 11.3 and ending at the close of business on the day of
such mailing. Promptly following any such exchange in part, such permanent
global Security shall be returned by the Trustee to the Common Depositary or the
U.S. Depositary, as the case may be, or such other Common Depositary or U.S.
<PAGE>
Depositary referred to above in accordance with the written instructions of the
Company referred to above. If a Security in the form specified for such series
is issued in exchange for any portion of a permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of interest or Defaulted Interest, as the case may be, such
interest or Defaulted Interest will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such security in
the form specified for such series, but will be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the Person to
whom interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligation, of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any security so selected for redemption in whole or in
part, except the unredeemed portion of any security being redeemed in part.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
<PAGE>
Company or the Trustee that such Security has been acquired by a protected
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid at the Place of
Payment to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, except that at the option of the Company payment may be made
(i) except in the case of a global Security by check mailed to the address of
the Person entitled thereto as such address appears in the Securities Registrar
or (ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Securities Registrar provided that proper transfer instructions
have been received by the Regular Record Date.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
<PAGE>
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Section
3.7 provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of such series
at his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of
any series in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Section 3.7,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
<PAGE>
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by any U.S. Depositary or Common Depositary (or its nominee), as a
Holder, with respect to such Security in global form or impair, as between such
U.S. Depositary or Common Depositary and owners of beneficial interests in such
Security in global form, the operation of customary practices governing the
exercise of the right of such U.S. Depositary or Common Depositary (or its
nominee) as holder of such Security in global form.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities shall be held by the Trustee and may
be destroyed (and, if so destroyed, certification of their destruction shall be
delivered to the Company upon its request, unless, by a Company Order, the
Company shall direct that cancelled Securities be returned to it).
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of Security for such series), when the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
<PAGE>
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.8) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.8 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.8, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
<PAGE>
any) and interest for whose payment such money has been deposited with or
received by the Trustee.
ARTICLE 5
REMEDIES
SECTION 5.1. Events of Default.
"EVENT OF DEFAULT," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or to be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) the Company defaults in the payment of interest or any sinking fund payment
on any Security of that series when such interest becomes due and payable and
the default continues for a period of 60 days; provided, however, that if the
Company is permitted by the terms of the Securities of the applicable series to
defer the payment in question, the date on which such payment is due and payable
shall be the date on which the Company is required to make payment following
such deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(2) the Company defaults in the payment of the principal of (or premium, if any,
on) any Security of that series when the same becomes due and payable at
Maturity, upon redemption (including redemptions under Article 11), by
declaration or otherwise; provided, however, that if the Company is permitted by
the terms of the Securities of the applicable series to defer the payment in
question, the date on which such payment is due and payable shall be the date on
which the Company is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities; or
(3) the Company fails to observe or perform in any material respect any of its
other covenants, warranties or agreements in the Securities of that series or in
this Indenture (other than a covenant, agreement or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt with
or which has expressly been included in this Indenture solely for the benefit of
series of Securities other than that series), and the failure to observe or
perform continues for the period and after the notice specified in the last
paragraph of this Section; or
(4) any event of default, as defined in any other indenture, mortgage, or
instrument under which there may be issued, or by which there may be secured or
evidenced, any Indebtedness of the Company (whether such Indebtedness now exists
or shall hereafter be created or incurred) shall occur and shall consist of
default in the payment of such Indebtedness at the maturity thereof (after
giving effect to any applicable grace period) or shall result in Indebtedness
becoming or being declared due and payable prior to the date on which it would
<PAGE>
otherwise become due and payable, and such default in payment is not cured or
such acceleration shall not be rescinded or annulled within 30 days after
written notice to the Company from the Trustee or to the Company and to the
Trustee from the Holders of at least 25% in aggregate principal amount of the
Securities of that series at the time outstanding; provided that it shall not be
an Event of Default if the principal amount of Indebtedness (other than
Indebtedness represented by Securities issued pursuant to this Indenture) which
is not paid at maturity or the maturity of which is accelerated is less than or
equal to $25 million provided further that if, prior to a declaration of
acceleration of the maturity of the Securities of that series or the entry of
judgment in favor of the Trustee in a suit pursuant to Section 5.3, such default
shall be remedied or cured by the Company or waived by the holders of such
Indebtedness, then the Event of Default hereunder by reason thereof shall be
deemed likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any of the Holders of the
Securities of that series, and provided further, that, subject to Sections 6.1
and 6.2, the Trustee shall not be charged with knowledge of any such default
unless written notice of such default shall have been given to the Trustee by
the Company, by a holder or an agent of a holder of any such Indebtedness, by
the trustee then acting under any indenture or other instrument under which such
default shall have occurred, or by the Holders of at least five percent in
aggregate principal amount of the Securities of that series at the time
Outstanding; or
(5) the Company pursuant to or within the meaning of any Bankruptcy Law (A)
commences a voluntary case or proceeding under any Bankruptcy Law with respect
to itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law, (C)
consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (D) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the Company or for any
material part of its property, (E) makes a general assignment for the benefit of
its creditors or (F) takes any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(6) (i) a court of competent jurisdiction enters a judgment, decree or order for
relief in respect of the Company in an involuntary case or proceeding under any
Bankruptcy Law which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company, (B) appoint a Custodian of the Company or for any material part of its
property, or (C) order the winding-up or liquidation of its affairs, and such
judgment, decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (ii) any bankruptcy or insolvency petition or application
is filed, or any bankruptcy or insolvency proceeding is commenced against the
Company and such petition, application or proceeding is not dismissed within 60
days; or (iii) a warrant of attachment is issued against any material portion of
the property of the Company which is not released within 60 days of service; or
(7) any other Event of Default provided with respect to Securities of that
series.
<PAGE>
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and the
Company does not cure the Default within 90 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." When a Default under clause (3) above is
cured within such 90-day period, it ceases.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series (other
than an Event of Default specified in clause (5) or (6) of Section 5.1) occurs
and is continuing, the Trustee by notice in writing to the Company, or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by notice in writing to the Company and the Trustee,
may declare the unpaid principal of and accrued interest to the date of
acceleration (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) on all the Outstanding Securities of that series to be due
and payable immediately and, upon any such declaration, the Outstanding
Securities of that series (or specified principal amount) shall become and be
immediately due and payable.
If an Event of Default specified in clause (5) or (6) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or specified principal amount) shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder of any Security of that series.
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, except obligations
under Section 6.7.
The Holders of a majority in principal amount of the Outstanding
Securities of that series by notice to the Trustee may rescind an acceleration
and its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal and interest of the Securities of that series that
has become due solely by such declaration of acceleration, have been cured or
waived, (ii) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal that has become due
otherwise than by such declaration of acceleration have been paid, (iii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iv) all payments due to the Trustee and any
predecessor Trustee under Section 6.7 have been made.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
<PAGE>
(1) default is made in the payment of any interest on any Security of any series
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on)
any Security of any series at the Maturity thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal (and premium, if any) and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to secure any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and premium, if
any) and interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel) and
<PAGE>
of the Holders allowed in such judicial proceedings, and
(ii) to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in respect
of the Securities of any series shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities in respect of which moneys have been collected
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 6.7
applicable to such series;
Second: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Securities of such series in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities of such series for principal (and premium, if
any) and interest, respectively; and
<PAGE>
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 5.6. At least fifteen (15) days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 5.7. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity has failed to institute any such proceeding; 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 principal
amount of the Outstanding Securities of that series; it being understood and
intended that no one or more of Holders of Securities of any series shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all Holders
of Securities of the affected series.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
<PAGE>
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding has been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with this
Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction; and
(3) subject to Section 6.1, the Trustee need not take any action which might
involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.
<PAGE>
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all the Securities of such series waive any Default or
Event of Default with respect to such series and its consequences, except a
Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or other provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
(3) Upon any such waiver, such Default or Event of Default shall cease to exist
and shall be deemed to have been cured, for every purpose of this Indenture and
the Securities of such series; but no such waiver shall extend to any subsequent
or other Default or Event of Default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE 6
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default, the Trustee's duties
and responsibilities under this Indenture shall be governed by Section 3.15(a)
of the Trust Indenture Act.
<PAGE>
(b) In case an Event of Default has occurred and is continuing, and is known to
the Trustee, the Trustee shall exercise the rights and powers vested in it by
this Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) None of the provisions of Section 315(d) of the Trust Indenture Act shall be
excluded from this Indenture.
SECTION 6.2. Notice of Defaults.
Within 90 days after the occurrence of any Default or Event of Default
with respect to the Securities of any series, the Trustee shall give to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any) or interest on
any Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
<PAGE>
(e) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity to its reasonable satisfaction against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal amount of the Outstanding Securities of any series; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the Trustee, reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding; the reasonable expense of every
such investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder; and
(h) the Trustee shall not be required 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 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.
(i) except in connection with compliance with Section 3.10 or Section 3.11 of
the Trust Indenture Act, the Trustee shall only be charged with knowledge of
Responsible Officers.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
<PAGE>
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder (including amounts held by
the Trustee as Paying Agent) need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed upon in writing
with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability, damage, claim or expense, including taxes (other than taxes based
upon or determined or measured by the income of the Trustee), incurred without
gross negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(5) or Section 5.1(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section 6.7 shall survive this Indenture and the
resignation or removal of any Trustee hereunder.
<PAGE>
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under Section 310(a)(1) of the Trust Indenture Act having a
combined capital and surplus of at least $5,000,000 subject to supervision or
examination by federal or State authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. Neither the Company nor any Person directly or indirectly
controlling, controlled by, or under common control with the Company may serve
as Trustee. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.11 shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust Indenture
Act after written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months; or
<PAGE>
(2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to
resign after written request here for by the Company or by any such Holder of a
Security who has been a bona fide Holder of a Security for at least six months;
or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt
or insolvent or a receiver of the Trustee or of its property shall be appointed
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of a security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company with respect to
such Securities. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 6.11, any Holder who has been a
bona fide Holder of a security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
<PAGE>
SECTION 6.11. Acceptance of Appointment by Successor or Additional Trustees.
(a) In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a Trustee or a successor with
respect to the Securities of one or more (but not all) series, the Company, any
retiring Trustee and each Trustee or a successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each Trustee or a successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each Trustee
or a successor Trustee all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such Trustee or a successor Trustee relates, (2) if any retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of any retiring Trustee with respect to the
Securities of that or those series as to which any retiring Trustee is not
retiring shall continue to be vested in any retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental Indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such Trustee or a successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of any retiring Trustee with respect to the Securities
of that or those series to which the appointment of such Trustee or a successor
Trustee relates; but, on request of the Company or any Trustee or a successor
Trustee, any such retiring Trustee shall duly assign, transfer and deliver to
such Trustee or a successor Trustee all property and money held by any such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of any such Trustee or successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
<PAGE>
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under the
Trust Indenture Act.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 6.14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of, and subject to the
direction of, the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.6, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
<PAGE>
Agent, having a combined capital and surplus of not less than $5,000,000 and
subject to supervision or examination by federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
lieu of the Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
Form of Authenticating Agent's
Certificate of Authentication
<PAGE>
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
As Trustee
By:
As Authenticating Agent
By:
Authorized Signatory
<PAGE>
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than January 1 and July 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of the preceding December 15 or June 15, as the case may be; and
(b) at such other times as the Trustee may request in writing, within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished; provided, however,
that so long as the Trustee is the Security Registrar, no such list shall be
required to be furnished.
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit
then the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the time
by the Trustee in accordance with Section 7.2(a); or
(ii) inform such applicants as to the approximate number of Holders whose names
and addresses appear in the information preserved at the time by the Trustee in
accordance with Section 7.2(a), and as to the approximate cost of mailing to
such Holders the form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
<PAGE>
mail to each Holder whose name and address appears in the information preserved
at the time by the Trustee in accordance with Section 7.2(a) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with Section 702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 7.2(b).
SECTION 7.3. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year 1999, the
Trustee shall transmit by mail to all Holders of Securities as provided in
Section 313(c) of the Trust Indenture Act, a brief report dated as of May 15, if
required by and in compliance with Section 313(a) of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is required to file
the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
<PAGE>
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations;
(3) furnish to the Trustee, on or before May 1 of each year, a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this
paragraph, such compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture. Such certificate
need not comply with Section 1.2.
ARTICLE 8
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 8.1. When Company May Merge, Etc.
The Company shall not consolidate, or merge with or into any other
corporation (whether or not the Company shall be the surviving corporation), or
sell, assign, transfer or lease or otherwise dispose of all or substantially all
of its properties and assets as an entirety or substantially as an entirety to
any Person or group of affiliated Persons, in one transaction or a series of
related transactions, unless:
(1) either the Company shall be the continuing Person or the Person (if other
than the Company) formed by such consolidation or with which or into which the
Company is merged or the Person (or group of affiliated Persons) to which all or
substantially all the properties and assets of the Company as an entirety or
substantially as an entirety are sold, assigned, transferred or leased shall be
a corporation, partnership or trust or other entity organized and existing under
the laws of the United States of America or any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Securities and this Indenture; and
<PAGE>
(2) immediately before and after giving effect to such transaction or series of
related transactions, no Event of Default, and no Default, and no event which,
after notice or lapse of time or both, would become and Event of Default, shall
have occurred and be continuing.
SECTION 8.2. Opinion of Counsel.
The Company shall deliver to the Trustee prior to the proposed
transaction(s) covered by Section 8.1 an Officer's Certificate and an Opinion of
Counsel stating that the transaction(s) and such supplemental indenture comply
with this Indenture and that all conditions precedent to the consummation of the
transaction(s) under this Indenture have been met.
SECTION 8.3. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into an other corporation or any lease, sale, assignment, or transfer of all or
substantially all of the property and assets of the Company in accordance with
Section 8.1, the successor corporation formed by such consolidation or into
which the Company is merged or the successor corporation or affiliated group of
corporations to which such lease, sale, assignment, or 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 or corporations had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation or
corporations shall be relieved of all obligations and covenants under this
Indenture and the Securities and in the event of such conveyance or transfer,
except in the case of a lease, any such predecessor corporation may be dissolved
and liquidated.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without notice to or the consent of any Holders of a series of
Securities, the Company, when authorized by a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of all
or any series of Securities (and if such covenants are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of series) or to surrender any right or
<PAGE>
power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any series of
Securities; or
(4) to add or change any of the provisions of this Indenture to such extent as
shall be necessary to permit or facilitate the issuance of Securities in bearer
form, registrable or not registrable as to principal, and with or without
interest coupons; or
(5) to change or eliminate any of the provisions of this Indenture, provided
that any such change or elimination shall become effective only when there is no
Security Outstanding of any series created prior to the execution of such
supplemental Indenture which is entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by
Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of appointment hereunder by a
Trustee or a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(9) to cure any ambiguity, defect or inconsistency or to correct or supplement
any provision herein which may be inconsistent with any other provision herein;
or
(10) to make any change that does not materially adversely affect the interests
of the Holders of Securities of such series; or
(11) to qualify, or maintain the qualification of the Indenture under the Trust
Indenture Act.
Upon request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in (and subject to the last sentence
of) Section 9.3, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
<PAGE>
shall, subject to Section 9.3, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding security affected
thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or extend the time for payment thereof, or reduce the amount
of the principal of an Original Issue Discount security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2, or change any Place of Payment where, or the coin or currency in
which, any security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding Securities of
any series, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or Defaults or Events of
Default hereunder and their consequences provided for in this Indenture; or
(3) change the redemption provisions (including Article Eleven) hereof in a
manner adverse to such Holder; or
(4) modify any of the provisions of this Section or Section 5.13, except to
increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of Sections
6.11(b) and 9.1(8).
A supplemental indenture which changes or eliminates any covenant or
other provisions of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
<PAGE>
SECTION 9.3. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant
to this Article, subject to the last sentence of this Section 9.3. In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
Indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticate and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
SECTION 10.1. Payments of Securities.
With respect to each series of Securities, the Company will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture.
<PAGE>
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of Payment
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment, where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee as set forth in Section 1.5
hereof.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates the Corporate Trust Office as such office of
the Company.
SECTION 10.3. Corporate Existence.
Subject to Article 8 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and that of each of its Subsidiaries and the rights (charter and
statutory) of the Company and its Subsidiaries; provided, however, that (a) the
Company shall not be required to preserve any such right, license or franchise
or the corporate existence of any of its Subsidiaries if the Board of Directors,
or the board of directors of the Subsidiary concerned, as the case may be, shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company or any of its Subsidiaries and that the loss thereof
is not materially disadvantageous to the Holders, and (b) nothing herein
contained shall prevent any Subsidiary of the Company from liquidating or
dissolving, or merging into, or consolidating with the Company (provided that
the Company shall be the continuing or surviving corporation) or with any one or
more Subsidiaries if the Board of Directors or the board of directors of the
Subsidiary concerned, as the case may be, shall so determine.
SECTION 10.4. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary material
to the Company and its Subsidiaries taken as a whole, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a
material lien upon the property of the Company or any Subsidiary material to the
Company and its Subsidiaries taken as a whole; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
<PAGE>
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which adequate provision has been made.
SECTION 10.5. Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 10 days after the
occurrence thereof, notice of any acceleration which with the giving of notice
and the lapse of time would be an Event of Default within the meaning of Section
5.1(4) hereof.
(b) The Company shall deliver to the Trustee forthwith upon becoming aware of a
Default or Event of Default (but in no event later than 10 days after the
occurrence of each Default or Event of Default that is continuing), an Officer's
Certificate setting forth the details of such Default or Event of Default and
the action that the Company proposes to take with respect thereto and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred.
SECTION 10.6. Commission Reports.
(a) So long as the Securities remain outstanding, the Company shall cause its
annual report to shareholders and any other financial reports furnished by it to
shareholders generally, to be mailed to the Holders at their addresses appearing
in the register of Securities maintained by the Security Registrar in each case
at the time of such mailing or furnishing to shareholders. If the Company is not
required to furnish annual reports to its shareholders pursuant to the Exchange
Act, the Company shall cause its financial statements, including any notes
thereto and, with respect to annual reports, an auditors' report by an
accounting firm of established national reputation and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," to be
so filed with the Trustee and mailed to the Holders within 90 days after the end
of each of the Company's fiscal years and within 45 days after the end of each
of the first three quarters of each fiscal year.
(b) The Company shall provide the Trustee with a sufficient number of copies of
all reports and other documents and information that the Company may be required
to deliver to the Holders under this Section 10.6.
SECTION 10.7. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim, and will actively resist any and all efforts to be compelled to 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 Securities as contemplated herein,
<PAGE>
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 10.8. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of the principal of (and premium,
if any) or interest on Securities of that series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment of principal
(and premium, if any) or interest on the Securities of that series; and
(iii) at any time during the continuance of any such default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
<PAGE>
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, unless an abandoned property law designates another Person, 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 of such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York,
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 publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
ARTICLE 11
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms in whole or in part
(provided Securities issued in denominations larger than $1,000 may be redeemed
in part only in integral multiples of $1,000) and (except as otherwise specified
as contemplated by Section 3.1 for Securities of any series) in accordance with
this Article.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all the Securities of any series, the Company shall, at least 45
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction.
<PAGE>
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, substantially pro rata, by lot
or by any other method as the Trustee considers fair and appropriate and that
complies with the requirements of the principal national securities exchange, if
any, on which such Securities are listed, and which may provide for the
selection for redemption of portions (equal to the lesser of the minimum
authorized denomination for Securities of that series or $50 per Security, and
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series; provided that in case the Securities of such series
have different terms and maturities, the Securities to be redeemed shall be
selected by the Company and the Company shall give notice thereof to the
Trustee.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of the Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at this address appearing in
the security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(4) that on the Redemption Date, the Redemption Price will become due and
payable upon each such security to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be surrendered for payment
of the Redemption Price;
<PAGE>
(6) that the redemption is for a sinking fund, if such is the case;
(7) the CUSIP number, if any, of the Securities to be redeemed; and
(8) unless otherwise provided as to a particular series of Securities, if at the
time of publication or mailing of any notice of redemption the Company shall not
have deposited with the Trustee or Paying Agent and/or irrevocably directed the
Trustee or Paying Agent to apply, from money held by it available to be used for
the redemption of Securities, an amount in cash sufficient to redeem all of the
Securities called for redemption, including accrued interest to the Redemption
Date, such notice shall state that it is subject to the receipt of the
redemption moneys by the Trustee or Paying Agent before the Redemption Date
(unless such redemption is mandatory) and such notice shall be of no effect
unless such moneys are so received before such date.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.5. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.8) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 11.6. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such security for redemption in accordance with said notice, such security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular or Special Record Dates
according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed in the
Security.
<PAGE>
SECTION 11.7. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such security without service charge, a new Security or Securities of
the same series and Stated Maturity, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the security so surrendered.
ARTICLE 12
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "Mandatory Sinking
Fund Payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "Optional
Sinking Fund Payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to redemption as
provided in Section 12.2. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been (i) previously cancelled pursuant to
Section 3.9 or delivered for cancellation or (ii) redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted Optional Sinking Fund Payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
Mandatory Sinking Fund Payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been previously
so credited. Such Securities shall be received and credited at the principal
amount for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
<PAGE>
of such Mandatory Sinking Fund Payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.1. Applicability of Article; Company's Option to Effect Defeasance
or Covenant Defeasance.
Unless pursuant to Section 3.1 provision is made for the
inapplicability of either or both of (a) Defeasance of the Securities of a
series under Section 13.2 or (b) Covenant Defeasance of the Securities of a
series under Section 13.3, then the provisions of such Section or Sections, as
the case may be, together with the other provisions of this Article, shall be
applicable to the Securities of such series, and the Company may at its option
by Board Resolution, at any time, with respect to the Securities of such series,
elect to have either Section 13.2 (unless inapplicable) or Section 13.3 (unless
inapplicable) be applied to the Outstanding Securities of such series upon
compliance with the applicable conditions set forth below in this Article.
SECTION 13.2. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 13.1 to
defease the Outstanding Securities of a particular series, the Company shall be
discharged from its obligations with respect to the Outstanding Securities of
such series on the date the applicable conditions set forth in Section 13.4 are
satisfied (hereinafter, "Defeasance"). Defeasance shall mean that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
<PAGE>
proper instruments acknowledging the same); provided, however, that the
following rights, obligations, powers, trusts, duties and immunities shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities of such series to receive, solely from the
trust fund provided for in Section 13.4, payments in respect of the principal of
(and premium, if any) and interest on such Securities when such payments are
due, (B) the Company's obligations with respect to such Securities under
Sections 3.4, 3.5, 3.6, 10.2 and 10.8, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article, the Company may exercise its option with respect
to Defeasance under this Section 13.2 notwithstanding the prior exercise of its
option with respect to Covenant Defeasance under Section 13.3 in regard to the
Securities of such series.
SECTION 13.3. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 13.1 to
obtain a Covenant Defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under this
Indenture (except its obligations under Sections 3.4, 3.5, 3.6, 5.6, 5.9, 6.10,
10.1, 10.2, 10.5, 10.7 and 10.8) with respect to the Outstanding Securities of
such series on and after the date the applicable conditions set forth in Section
1304 are satisfied (hereinafter, "Covenant Defeasance"). Covenant Defeasance
shall mean that, with respect to the Outstanding Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in this Indenture (except its
obligations under Sections 3.4, 3.5, 3.6, 5.6, 5.9, 6.10, 10.1, 10.2, 10.5, 10.7
and 10.8), whether directly or indirectly by reason of any reference elsewhere
herein or by reason of any reference to any other provision herein or in any
other document, and such omission to comply shall not constitute an Event of
Default under Section 5.1(4) with respect to Outstanding Securities of such
series, and the remainder of this Indenture and of the Securities of such series
shall be unaffected thereby.
SECTION 13.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance under Section 13.2
and Covenant Defeasance under Section 13.3 with respect to the Outstanding
Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to be deposited (and
in the case of Defeasance such deposit shall have been made 121 days prior to
Defeasance with the Trustee (or another trustee satisfying the requirements of
Section 6.9 who shall agree to comply with the provisions of this Article
applicable to it), under the terms of an irrevocable trust agreement in form and
substance reasonably satisfactory to such Trustee, as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (A)
Dollars in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than the due date of any payment, money
<PAGE>
in an amount, or (C) a combination thereof, in each case sufficient, after
payment of all federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal of (and premium, if any, on) and each installment
of principal of (and premium, if any) and interest on the Outstanding Securities
of such series on the Stated Maturity of such principal or installment of
principal or interest and (ii) any mandatory sinking fund payments or analogous
payments applicable to the Outstanding Securities of such series on the day on
which such payments are due and payable in accordance with the terms of this
Indenture and of such Securities.
(2) No Default or Event of Default with respect to the Securities of such series
shall have occurred and be continuing on the date of such deposit or shall occur
as a result of such deposit, and no Default or Event of Default under clause (5)
or (6) of Section 5.1 hereof shall occur and be continuing, at any time during
the period ending on the 31st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such deposit, Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(4) In the case of an election with respect to Section 13.2, the Company shall
have delivered to the Trustee either (A) a ruling directed to the Trustee
received from the Internal Revenue Service to the effect that the Holders of the
Outstanding Securities of such series 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 or
(B) an Opinion of Counsel, based on a ruling published by the Internal Revenue
Service or on a change in the applicable federal income tax law since the date
of this Indenture, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Outstanding Securities of such
series 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.
(5) In the case of an election with respect to Section 13.3, the Company shall
have delivered to the Trustee an Opinion of Counsel or a ruling directed to the
Trustee received from the Internal Revenue Service to the effect that the
Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred.
<PAGE>
(6) Such Defeasance or Covenant Defeasance shall be effected in compliance with
any additional terms, conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section 3.1.
(7) The Company shall have delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
relating to either the Defeasance under Section 13.2 or the Covenant Defeasance
under Section 13.3 (as the case may be) have been complied with.
SECTION 13.5. Deposited Money and Government Obligations To Be Held In Trust.
Subject to the provisions of the last paragraph of Section 10.8, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee--collectively for purposes of this
Section 13.5, the "Trustee") pursuant to Section 13.4 in respect of the
Outstanding Securities of a particular series shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal (and premium, if any) and 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 Government Obligations deposited
pursuant to Section 13.4 or the principal and interest received in respect
thereof, other than any such tax, fee or other charge which by law is for the
account of the Holders of the Outstanding Securities of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver to pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 13.4 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 for
the purpose for which such money or Government Obligations were deposited.
ARTICLE 14
MISCELLANEOUS
SECTION 14.1. Miscellaneous.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
ADELPHIA COMMUNICATIONS CORPORATION,
as Issuer
By: /s/ James Brown
Name: James Brown
Title: Vice President
BANK OF MONTREAL TRUST COMPANY,
By: /s/ Peter Morse
Name: Peter Morse
Title: Vice President
Exhibit 4.02
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
ADELPHIA COMMUNICATIONS CORPORATION
AND
BANK OF MONTREAL TRUST COMPANY,
Trustee
Up to $700,000,000
$350,000,000 7-7/8% Senior Notes due 2009
FIRST SUPPLEMENTAL INDENTURE
Dated as of April 28, 1999
TO
INDENTURE
Dated as of April 28, 1999
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS
<S> <C>
ss.1.1. Definitions..............................................................................................1
ARTICLE 2 FORM AND TERMS OF THE NOTES
ss.2.1. Form and Dating..........................................................................................9
ss.2.2. Execution and Authentication............................................................................10
ss.2.3. Depository and Paying Agent for Notes...................................................................11
ss.2.4. Transfer and Exchange of Notes..........................................................................11
ss.2.5. Change of Control Offer.................................................................................13
ss.2.6. Events of Default.......................................................................................15
ss.2.7. Acceleration............................................................................................16
ss.2.8. Mergers and Consolidations..............................................................................17
ss.2.9. Supplemental Indentures.................................................................................18
ss.2.10. Covenants..............................................................................................18
ss.2.11. Defeasance and Covenant Defeasance.....................................................................23
ARTICLE 3 MISCELLANEOUS
ss.3.1. Effect of Headings......................................................................................24
ss.3.2. Succesors and Assigns...................................................................................24
ss.3.3. Separability Clause.....................................................................................24
ss.3.4. Governing Law...........................................................................................24
EXHIBITS
Exhibit A FORM OF NOTES
</TABLE>
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of April 28, 1999
("Supplemental Indenture"), is by and between ADELPHIA COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"), having its principal office
at Main at Water Street, Coudersport, PA 16195, and BANK OF MONTREAL TRUST
COMPANY, a trust company organized under the laws of the State of New York, as
trustee (the "Trustee"), having its principal office at Wall Street Plaza, 88
Pine Street, 19th Floor, New York, NY 10005.
WITNESSETH:
WHEREAS, the Company and the Trustee executed and delivered an
Indenture, dated as of April 28, 1999 (the "Indenture"), to provide for the
issuance by the Company from time to time of Securities to be issued in one or
more series as provided in the Indenture;
WHEREAS, the issuance and sale of up to $700,000,000 aggregate
principal amount of a series of the Company's Securities (the "Notes") have been
authorized by resolutions adopted by the Board of Directors of the Company on
April 22, 1999 and by the 1999 Public Offering Commitee of the Board of
Directors of the Company on April 23, 1999, with such terms as have been
established by resolutions adopted by the 1999 Public Offering Committee of the
Board of Directors of the Company dated April 23, 1999;
WHEREAS, the Company desires to issue and sell $350,000,000
aggregate principal amount of the Notes on the date hereof;
WHEREAS, the Company desires to enter into a supplemental
indenture pursuant to Section 9.1 of the Indenture to supplement the Indenture
to establish the form and terms of the Notes; and
NOW, THEREFORE, for and in consideration of the premises
stated herein and the purchase of the Notes by the Holders thereof, the parties
hereto hereby enter into this Indenture, for the equal and proportionate benefit
of all Holders of Notes, as follows:
ARTICLE 1
DEFINITIONS
ss. 1.1. Definitions.
(a) All of the terms used in this Supplemental Indenture which
are defined in the Indenture shall have the meanings specified in the Indenture,
unless otherwise provided herein or unless the context otherwise requires, and
for the purposes of this Supplemental Indenture, the following terms have the
meanings set forth in this Section:
"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
<PAGE>
officer of the Company. As used herein, "Affiliate" shall not include a
Restricted Subsidiary.
"Agent" means any Security Registrar, Paying Agent,
co-registrar or agent for service of notices and demands. See Section 2.3
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.
"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.
2
<PAGE>
"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.
"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.
"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.
"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.
3
<PAGE>
"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.
"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 Security 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
4
<PAGE>
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.
"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 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.
5
<PAGE>
"Notes" means the 7-7/8% Senior Notes Due 2009 that are issued
under this Supplemental Indenture, as amended or supplemented from time to time
pursuant to the Indenture.
"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.
"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 10.6; 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 10.5.
"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.
"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
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<PAGE>
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.
"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.
"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
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<PAGE>
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 May 1, 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.
"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.
"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.
"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
8
<PAGE>
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.
(b) 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>
"Change of Control Offer".............................................2.5
"Change of Control Purchase Price"....................................2.5
"DTC".................................................................2.3
"Event of Default"....................................................2.7
"Proposed Change of Control Response Date"............................2.5
"Reclassification"....................................................2.11
</TABLE>
ARTICLE 2
FORM AND TERMS OF THE NOTES
ss. 2.1. 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 Notes. Notes shall be issued initially in the form
of the Global Notes, 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 Notes 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 Notes 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 Notes to reflect the amount of any
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<PAGE>
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 2.4 hereof.
Except as set forth in Section 2.4 hereof, the Global Notes
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 2.1(b) shall
apply only to the Global Notes deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver the Global Notes 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 Notes held on their behalf by the Depository or by
the Note Custodian or under such Global Notes, 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 Notes 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 Notes.
(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 2.4, owners of beneficial interests in the Global Notes will not be
entitled to receive physical delivery of certificated Securities.
ss. 2.2. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or
facsimile signature. 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 up to $700,000,000 aggregate principal amount of
Notes for original issue. The aggregate principal amount of Notes outstanding at
any time may not exceed such amounts except as provided in Section 3.6 of the
Indenture.
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.
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<PAGE>
ss. 2.3. Depository and Paying Agent for Notes.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Security Registrar and Paying Agent respect to the Global Notes.
ss. 2.4. Transfer and Exchange of Notes.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of beneficial interests in the Global Notes 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 Notes may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the Global Notes.
(b) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Security 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
Security 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 shall
be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory
to the Security Registrar duly executed by
such Holder or by his attorney, duly
authorized in writing.
(c) Intentionally omitted.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.4), the Global Notes 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) Intentionally omitted.
(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 Notes and a successor Depository for
the Global Notes is not appointed by the
Company within 90 days after delivery of
such notice; or
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(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 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Intentionally omitted.
(h) Cancellation and/or Adjustment of the Global Notes. At
such time as all beneficial interests in the Global Notes have been exchanged
for Definitive Notes, redeemed, repurchased or canceled, the Global Notes shall
be returned to or retained and canceled by the Trustee in accordance with
Section 3.9 of the Indenture. At any time prior to such cancellation, if any
beneficial interest in the Global Notes is exchanged for Definitive Notes,
redeemed, repurchased or canceled, the principal amount of Notes represented by
the Global Notes shall be reduced accordingly and an endorsement shall be made
on the Global Notes, 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 Notes at the Security
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 Section 2.4 hereto).
(iii) All Definitive Notes and the Global Notes
issued upon any registration of transfer or
exchange of Definitive Notes or the Global
Notes 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 Notes 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 Notes in accordance
with the provisions of Section 2.2 hereof.
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ss. 2.5. 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 Security 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
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<PAGE>
(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 Section 2.5, 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.
ss. 2.6. Events of Default.
With respect to the Notes issued under this Supplemental
Indenture, Section 5.1 of the Indenture is hereby replaced in its entirety as
follows:
An "Event of Default" occurs with respect to the Notes if:
(1) the Company defaults in the payment of any
principal of such series of Notes when the same becomes due
and payable at maturity, upon acceleration or otherwise;
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<PAGE>
(2) the Company defaults in the payment of any
interest on such series of Notes 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 such series of 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 such series of 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
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<PAGE>
(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.
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 a series of Notes notifies 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 a series of outstanding Notes request the Trustee to give
such notice on their behalf, the Trustee shall do so.
ss. 2.7. Acceleration.
With respect to the Notes issued under this Supplemental
Indenture, Section 5.2 of the Indenture is hereby replaced in its entirety as
follows:
If an Event of Default with respect to the Notes (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
affected thereby then outstanding may declare to be immediately due and payable
the principal amount of 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 the 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 2.6(6) or
(7) of the Supplemental Indenture 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.
ss. 2.8. Mergers and Consolidations.
With respect to the Notes issued under this Supplemental
Indenture, Section 8.1 of the Indenture is replaced in its entirety as follows:
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
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<PAGE>
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:
<TABLE>
<CAPTION>
A B C
<S> <C> <C>
1.1111:1 to 1.4999:1 90% 1.00:1
1.5 and higher 80% 1.35:1
</TABLE>
and provided, further, that if the pro forma Consolidated Fixed Charge Ratio of
the surviving entity is 2:1 or more, the calculation in the preceding proviso
shall be inapplicable and such transaction shall be deemed to have complied with
the requirements of such proviso.
In connection with any consolidation, merger or transfer
contemplated by this Section 8.1, 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 8.1 and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
ss. 2.9. Supplemental Indentures.
With respect to the Notes issued under this Supplemental
Indenture, the following Section supplements Article 9 of the Indenture:
ss.9.7 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.
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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 (4) of Section 9.2 of the Indenture. 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.
ss. 2.10. Covenants.
<TABLE>
<CAPTION>
With respect to the Notes issued under this Supplemental Indenture,
(1) references in the Indenture to the following sections are modified as follows:
<S> <C>
Reference in the Indenture to: Refers to:
----------------------------- ---------
Section 10.1 of the Indenture Section 10.1 of the Supplemental Indenture
Section 10.2 of the Indenture Not applicable
Section 10.5 of the Indenture Section 10.10 of the Supplemental Indenture
Section 10.7 of the Indenture Section 10.3 of the Supplemental Indenture
Section 10.8 of the Indenture Section 10.8 of the Supplemental Indenture
and (2) Article 10 of the Indenture is hereby replaced in its entirety as follows:
</TABLE>
ARTICLE 10
COVENANTS
ss. 10.1 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.
ss. 10.2 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
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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).
ss. 10.3 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.
ss. 10.4 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.
ss. 10.5 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 unless, after giving effect to such incurrence on a pro forma
basis, Indebtedness of the Company and its Restricted Subsidiaries, on a
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<PAGE>
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 10.6.
ss. 10.6 Limitation 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.
ss. 10.7 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.
ss. 10.8 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
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<PAGE>
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of
(and premium, if any) or interest on any Securities of that series, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure to so act.
The Company will cause each Paying Agent for any series of
Securities (other than the Trustee) to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities
of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities of that
series) in the making of any payment of principal (and
premium, if any) or interest on the Securities of that series;
and
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, unless an abandoned property law
designates another Person, 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 of such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, 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 publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
ss. 10.9 Notice of Defaults Or Events of Default.
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<PAGE>
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.
ss. 10.10 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.
ss.10.11 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 10.11 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.
ss.10.11 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.
ss.10.12 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
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<PAGE>
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.
ss. 2.11. Defeasance and Covenant Defeasance.
With respect to the Notes issued under this Supplemental
Indenture, the following Section supplements Article 13 of the Indenture:
ss. 13.6. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 13.1 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 13 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 13.1;
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 3
MISCELLANEOUS
ss. 3.1. Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the constructino hereof.
ss. 3.2. Succesors and Assigns.
All covenants and agreements in this Supplemental Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.
ss. 3.3. Separability Clause.
In case any provision in this Supplemental Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
ss. 3.4. Governing Law.
This Supplemental Indenture and the Notes created hereby shall
be governed by and construed in accordance with the laws (other than the choice
of law provisions) of the State of New York.
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24
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IN WITNESS WHEREOF, the parties have caused this Supplemental
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: Vice President
BANK OF MONTREAL TRUST COMPANY,
as Trustee
By: /s/ Peter Morse
Name: Peter Morse
Title: Vice President
<PAGE>
Exhibit A
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
[Face of Note]
7-7/8% Senior Notes due 2009
CUSIP No. 006848BD6 $350,000,000
ADELPHIA COMMUNICATIONS CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of Three
Hundred and Fifty Dollars on May 1, 2009.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Dated: April 28, 1999
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>
[Back of Note]
7-7/8% Senior Notes due 2009
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
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 7-7/8% per annum from April 28, 1999 until May 1, 2009. The Company
shall pay interest, semi-annually in arrears on May 1 and November 1 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 November 1,
1999. 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 (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 Notes (including principal and
interest) 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 and interest 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 Notes are expected
to be eligible to trade in DTC's Same-Day Funds Settlement System, and any
permitted secondary market trading activity in such notes will, therefore, be
required by DTC to be settled in immediately available funds. The Company
expects that secondary trading in the Definitive Notes also will be settled in
immediately available funds.
<PAGE>
3. PAYING AGENT AND SECURITY REGISTRAR. Initially, Bank of
Montreal Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Security Registrar. The Notes may be presented for registration of
transfer and exchange at the offices of the Security Registrar. The Company may
change any Paying Agent or Security 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 April 28, 1999 (the "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 issued under the Indenture are senior unsecured
obligations of the Company limited to $700 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 with respect to the Notes or the Notes may be amended
or supplemented with the written consent of the Holders of a majority in
principal amount of the Notes, and any existing default or compliance with any
provision of the Indenture with respect to the Notes or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the Notes.
Without the consent of any Holder of the Notes, the Indenture with respect to
the Notes or the Notes may be amended or supplemented to, in addition to other
events more fully described in the Indenture, cure any ambiguity, defect or
inconsistency, to establish the form or terms of the Notes as permitted by
Sections 2.1 and 3.1 of the Indenture, to evidence the succession of another
corporation to the Company and the assumption by any such successor of the the
covenants of the Company contained in the Indenture, to secure the Notes, to
make any change that does not materially adversely affect the interests of any
Holder under the Indenture, or to qualify, or maintain the qualification of the
Indenture under the Trust Indenture Act.
<PAGE>
10. DEFAULTS AND REMEDIES. An Event of Default with respect to
the Notes occurs if: (i) the Company defaults in the payment when due of any
interest on, or Liquidated Damages with respect to, any such series of Notes and
such default continues for a period of 30 days; (ii) the Company defaults in the
payment of the principal of any such series of Notes 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 such series of 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 series of Notes may declare all of such
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 5.1 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 series of Notes will become due and
payable without further action or notice. Holders of such series of Notes may
not enforce the Indenture with respect to such series of Notes or such series of
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding series of
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of such series of 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 such series of 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, such series of Notes (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding series of 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,
<PAGE>
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), TEN ENT
(= 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. 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. 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 Section 2.5 of the Supplemental Indenture, check the box
below:
____ Section 2.5
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 2.5 of the Supplemental 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>
SCHEDULE OF EXCHANGES OF NOTES 2
The following exchanges of a part of this Global Note for
other Notes have been made:
<CAPTION>
Principal Amount of Signature of
Amount of decrease Amount of increase in this Global Note authorized office
in Principal Amount Principal Amount of following such of Trustee or Note
Date of Exchange of this Global Note this Global Note decrease (or increase) Custodian
- - -------------------------
<S> <C> <C> <C> <C>
<FN>
- - --------
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.
</FN>
</TABLE>
