-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PM6iGvG/hQuCMTAaDafLsw4GvSdybrSevgQQ8QWCiAgs+3B5qrHljeY9LcYqcJgx DELKb3a3VxgQIU6YhRNLxA== 0000950123-01-501264.txt : 20010430 0000950123-01-501264.hdr.sgml : 20010430 ACCESSION NUMBER: 0000950123-01-501264 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSC HOLDINGS INC CENTRAL INDEX KEY: 0000784681 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 112776686 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-59626 FILM NUMBER: 1612356 BUSINESS ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAGE STATE: NY ZIP: 11714 BUSINESS PHONE: 5138032300 MAIL ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAHE STATE: NY ZIP: 11714 S-4 1 y48336s-4.txt CSC HOLDINGS INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 27, 2001 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CSC HOLDINGS, INC. (Exact name of registrant as specified in its charter) DELAWARE 4841 11-2776686 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification No.)
1111 STEWART AVENUE BETHPAGE, NEW YORK 11714 (516) 803-2300 (Address, including zip code, and telephone number, including area code, of the registrant's principal executive offices) ROBERT S. LEMLE, ESQ. VICE CHAIRMAN, GENERAL COUNSEL AND SECRETARY 1111 STEWART AVENUE BETHPAGE, NEW YORK 11714 (516) 803-2300 (Name, address, including zip code, and telephone number, including area code, of agent for service) COPY TO: JOHN P. MEAD, ESQ. SULLIVAN & CROMWELL 125 BROAD STREET NEW YORK, NEW YORK 10004 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC: As soon as practicable after the effective date of this registration statement. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / CALCULATION OF REGISTRATION FEE
================================================================================================================================== PROPOSED PROPOSED TITLE OF EACH CLASS MAXIMUM OFFERING MAXIMUM OF SECURITIES TO AMOUNT TO BE PRICE AGGREGATE OFFERING AMOUNT OF BE REGISTERED REGISTERED PER UNIT (1) PRICE (1) REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------------------- 7 5/8% Series B Senior Notes $1,000,000,000 100% $1,000,000,000 $250,000 ==================================================================================================================================
(1) Estimated in accordance with Rule 457(f) under the Securities Act of 1933 solely for purposes of calculating the registration fee. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- 2 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS (Subject to Completion) Dated May ___, 2001 CSC HOLDINGS, INC. OFFER TO EXCHANGE $1,000,000,000 7 5/8% SERIES B SENIOR NOTES DUE 2011 WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ALL OUTSTANDING UNREGISTERED 7 5/8% SENIOR NOTES DUE 2011 We are offering to exchange $1,000,000,000 aggregate principal amount of the outstanding, unregistered CSC Holdings 7 5/8% Senior Notes due 2011 that you now hold for new, substantially identical 7 5/8% Series B Senior Notes due 2011 that will be free of the transfer restrictions of the old notes. THIS OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [DATE], 2001, UNLESS WE EXTEND THE DEADLINE. You must tender your old, unregistered notes by the deadline to obtain new, registered notes and the liquidity benefits the new notes offer. We agreed with the initial purchasers of the old notes to make this offer and to register the issuance of the new notes after the initial sale of the old notes. This offer applies to any and all old notes tendered by the deadline. We will not list the new notes on any established exchange. The new notes will have the same financial terms and covenants as the old notes, and are subject to the same business and financial risks. SEE "RISK FACTORS", BEGINNING ON PAGE 15 FOR A DISCUSSION OF THE FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN EXCHANGE OF OLD NOTES FOR NEW NOTES. Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. It is illegal for anyone to tell you otherwise. The date of this prospectus is May___, 2001 3 TABLE OF CONTENTS
PAGE ---- Additional Information About CSC Holdings.................................................................... 4 Summary...................................................................................................... 5 Risk Factors................................................................................................. 15 Use of Proceeds.............................................................................................. 22 CSC Holdings, Inc............................................................................................ 22 The Exchange Offer........................................................................................... 24 How to Tender Your Old Notes................................................................................. 30 Description of the New Notes................................................................................. 40 Material U.S. Federal Income Tax Considerations.............................................................. 58 Plan of Distribution......................................................................................... 58 Validity of the New Notes.................................................................................... 60 Experts...................................................................................................... 60 Available Information........................................................................................ 60 Where You Can Find More Information.......................................................................... 61
FORWARD-LOOKING STATEMENTS This registration statement contains or incorporates by reference statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to: - - the level of our revenues, - - subscriber demand, competition, the cost of programming and industry conditions, - - the regulatory environment in which we operate, - - the level of our capital expenditures and whether our expenses increase as expected, - - pending and future acquisitions and dispositions of assets, - - market demand for new services, - - whether any pending unconsummated transactions are consummated on the terms and at the times set forth, if at all, - - new competitors entering our franchise areas, - - financial community and rating agency perceptions of our business, operations, financial condition, and the industry in which we operate, and - - other risks and uncertainties inherent in the cable television business and our other businesses. -2- 4 We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this registration statement might not occur. See "Risk Factors" below for more information on the uncertainty of forward-looking statements. -3- 5 ADDITIONAL INFORMATION ABOUT CSC HOLDINGS This document incorporates important business and financial information about CSC Holdings from documents that are not included in or delivered with this document. You can obtain documents incorporated by reference in this document, other than some exhibits to those documents, by requesting them in writing or by telephone from us at the following: CSC HOLDINGS, INC. 1111 STEWART AVENUE BETHPAGE, NEW YORK 11714 ATTENTION: SECRETARY (516) 803-2300 YOU WILL NOT BE CHARGED FOR ANY OF THE DOCUMENTS THAT YOU REQUEST. IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY [DATE], 2001 IN ORDER TO RECEIVE THEM BEFORE THE EXCHANGE OFFER EXPIRES ON [DATE], 2001. Financial and other information relating to our business is contained in this document including "Selected Financial Data" below. See "Where You Can Find More Information" below to learn how you can obtain this additional information. WE ARE NOT MAKING THIS EXCHANGE OFFER TO, NOR WILL WE ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER WOULD VIOLATE SECURITIES OR BLUE SKY LAWS. -4- 6 SUMMARY This brief summary highlights selected information contained in this document and documents we have incorporated in this document by reference. It does not contain all of the information that is important to you. We urge you to read carefully the entire document, the documents incorporated in this document by reference and the other documents to which this document refers, including our consolidated financial statements and the notes to those financial statements, which are incorporated in this document by reference. CSC HOLDINGS, INC. We served approximately 3,193,000 cable television subscribers as of December 31, 2000. Giving effect to the consummation of our transactions with AT&T Corp. on January 5, 2001 we would have served approximately 2,961,000 cable television subscribers as of December 31, 2000. Through Rainbow Media Holdings, Inc., a company owned 74% by us and 26% by a subsidiary of National Broadcasting Company, Inc., we own interests in and manage numerous national and regional programming networks, the Madison Square Garden sports and entertainment business and cable television advertising sales companies. Through Cablevision Lightpath, Inc., our wholly owned subsidiary, we provide switched telephone service. We also own Cablevision Electronics Investments, Inc., doing business as The Wiz, an electronics retailer operating 42 retail locations in the New York City metropolitan area, and CCG Holdings, Inc., doing business as Clearview Cinemas, an owner and operator of motion picture theaters in the New York City metropolitan area. Our cable television systems serve subscribers in and around metropolitan New York City, including in the boroughs of Brooklyn and the Bronx, on Long Island, in Fairfield County, Connecticut, in New Jersey and in Westchester, Rockland, Putnam, Orange, Ulster and Dutchess Counties, New York. Our cable television systems have generally been characterized by relatively high revenues per subscribers, which were $47.38 for December 2000, and a high ratio of premium service units to basic subscribers, which was 2.6:1 as of December 31, 2000 for the cable television systems in the New York metropolitan area. In calculating revenues per subscriber, we include only recurring service revenues and exclude installation charges and certain other revenues such as advertising, pay-per-view and home shopping revenues. For financing purposes, we are structured as a Restricted Group, which includes all of our cable television systems and the commercial telephone operations of Cablevision Lightpath on Long Island, and an Unrestricted Group, which includes, among other subsidiaries and investments, Rainbow Media, Cablevision Electronics and CCG Holdings. Our Restricted Group and our Unrestricted Group are described more fully below under "CSC Holdings, Inc." Our principal executive offices are located at 1111 Stewart Avenue, Bethpage, New York 11714, and our main telephone number is (516) 803-2300. For a further discussion of our businesses, we urge you to read our Form 10-K incorporated by reference herewith. See "Where You Can Find More Information" below. -5- 7 THE EXCHANGE OFFER THE EXCHANGE OFFER We are offering to exchange $1,000 principal amount of our 7 5/8 Series B Senior Notes due 2011 registered under the Securities Act of 1933, which we refer to as "new notes", for each $1,000 principal amount of our outstanding 7 5/8% Senior Notes due 2011 issued on March 22, 2001 in a private offering, which we refer to as "old notes". In order to exchange an old note, you must follow the required procedures and we must accept the old note for exchange. We will exchange all notes validly offered for exchange, or "tendered", and not validly withdrawn. As of the date of this document, there is $1 billion aggregate principal amount of old notes outstanding. EXPIRATION AND EXCHANGE DATES Our offer expires at 5:00 p.m., New York City time, on [DATE], 2001, unless we extend the deadline. We will complete the exchange and issue the new notes as soon as possible after that date. ACCRUED INTEREST ON THE NEW NOTES AND THE OLD NOTES The new notes will bear interest from March 22, 2001, the date we issued the old notes. If you hold old notes and they are accepted for exchange: - - you will waive your right to receive any interest on your old notes accrued from March 22, 2001 to the date the new notes are issued - - you will receive the same interest payment on October 1, 2001, which is the first interest payment date with respect to the old notes and the new notes, that you would have received had you not accepted the exchange offer. REGISTRATION RIGHTS You have the right to exchange old notes that you now hold for new notes. We intend to satisfy this right by this exchange offer. The new notes will have substantially identical terms to the old notes, except the new notes will be registered under the Securities Act and will not have any registration rights. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your notes. CONDITIONS The only condition to this offer is that the exchange offer does not violate the securities laws. This offer applies to any and all notes validly tendered by the deadline. RESALE WITHOUT FURTHER REGISTRATION We believe that you may offer for resale, resell and otherwise transfer the new notes without complying with the registration and prospectus delivery provisions of the Securities Act if the following is true: - - you acquire the new notes issued in the exchange offer in the ordinary course of your business, - - you are not an "affiliate", as defined under Rule 405 of the Securities Act, of CSC Holdings, -6- 8 - - you are not participating, and do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the new notes issued to you in the exchange offer. By signing the letter of transmittal and exchanging your notes as described below, you will be making representations to this effect. If you are a broker-dealer that acquired old notes as a result of market-making or other trading activities, you must deliver a prospectus in connection with any resale of the new notes as described in this summary under "Restrictions on Sale by Broker-Dealers" below. We base our belief on interpretations by the SEC staff in no-action letters issued to other issuers in exchange offers like ours. We cannot guarantee that the SEC would make a similar decision about our exchange offer. If our belief is wrong, you could incur liability under the Securities Act. We will not protect you against any loss incurred as a result of this liability under the Securities Act. LIABILITY UNDER THE SECURITIES ACT You also may incur liability under the Securities Act if: (1) any of the representations listed above are not true and (2) you transfer any new note issued to you in the exchange offer without: - delivering a prospectus meeting the requirements of the Securities Act or - an exemption from the requirements of the Securities Act to register your new notes. We will not protect you against any loss incurred as a result of this liability under the Securities Act. RESTRICTIONS ON SALE BY BROKER-DEALERS If you are a broker-dealer that has received new notes for your own account in exchange for old notes that were acquired as a result of market-making or other trading activities, you must acknowledge in a letter of transmittal that you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. A broker-dealer may use this prospectus for 90 days after the last exchange date for an offer to resell, a resale or other retransfer of the new notes issued to it in the exchange offer. PROCEDURES FOR TENDERING OLD NOTES If you hold old notes and want to accept the exchange offer, you must either: -7- 9 - - complete, sign and date the accompanying letter of transmittal, and deliver it, together with your old notes and any other required documents, to the exchange agent or - - if you hold old notes registered in the name of a broker-dealer, arrange for The Depository Trust Company to give the exchange agent the required information for a book-entry transfer. You must mail or otherwise deliver this documentation or information to The Bank of New York, as exchange agent, or The Depository Trust Company at the address under "How to Tender Your Old Notes--Exchange Agent" below. SPECIAL PROCEDURES FOR BENEFICIAL OWNERS If you hold old notes registered in the name of a broker-dealer, commercial bank, trust company or other nominee and you wish to exchange your old notes in the exchange offer, you should promptly contact the registered holder of the old notes and instruct it to tender on your behalf. If you wish to tender on your own behalf, you must, before completing and executing the letter of transmittal for the exchange offer and delivering your old notes, either arrange to have your old notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take a long time. FAILURE TO EXCHANGE WILL AFFECT YOU ADVERSELY If you are eligible to participate in the exchange offer and you do not tender your old notes, you will not have any further registration or exchange rights and your old notes will continue to be subject to transfer restrictions. These transfer restrictions and the availability of new notes could adversely affect the trading market for your old notes. GUARANTEED DELIVERY PROCEDURES If you wish to exchange your old notes and: - - you cannot send the required documents to the exchange agent by the expiration date of the exchange offer or - - you cannot complete the procedure for book-entry transfer on time or - - your old notes are not immediately available then you must follow the procedures described under "How to Tender Your Old Notes--Guaranteed Delivery Procedures" below. -8- 10 WITHDRAWAL RIGHTS You may withdraw your tender at any time before 5:00 p.m., New York City time, on [DATE - THE BUSINESS DAY BEFORE THE DAY THE OFFER EXPIRES], 2001, unless we have already accepted your offer to exchange your old notes. ACCOUNTING TREATMENT We will not recognize a gain or loss for accounting purposes as a result of the exchange. FEDERAL INCOME TAX CONSEQUENCES The exchange will not be a taxable event for U.S. federal income tax purposes. This means you will not recognize any taxable gain or loss or any interest income as a result of the exchange. EXCHANGE AGENT The Bank of New York is the exchange agent for the exchange offer. The Bank of New York is also the trustee under the indenture governing the notes. ABSENCE OF APPRAISAL RIGHTS As a holder of old notes you are not entitled to appraisal or dissenters' rights under Delaware law, the indenture governing the old notes or the indenture that will govern the new notes. See "The Exchange Offer - Terms of the Exchange Offer - No Appraisal or Dissenters' Rights" for more information. THE NEW NOTES The new notes have the same financial terms and covenants as the old notes. In this document we sometimes refer to the old notes and the new notes together as the "notes". The terms of the new notes are as follows: ISSUER CSC Holdings, Inc. SECURITIES OFFERED $1,000,000,000 principal amount of 7 5/8% Series B Senior Notes due 2011. MATURITY April 1, 2011. INTEREST RATE 7 5/8% per year. INTEREST PAYMENT DATES Interest on the old notes began accruing on March 22, 2001, the date we issued the old notes. Interest is payable on the old notes, and will be payable on the new notes, on April 1 and October 1 of each year. Before the date of this document no interest payments have been made on the old notes. The first interest payment date for the new notes will be October 1, 2001. RANKING The new notes will be senior unsecured obligations and will rank equally in right of payment with all of our other existing and future unsubordinated indebtedness. All of our secured indebtedness will have a prior claim with respect to the assets securing that indebtedness. The liabilities, including trade payables, of our subsidiaries will have a prior
-9- 11 claim with respect to the assets of those subsidiaries. In that regard, certain of our subsidiaries have guaranteed our indebtedness under our principal bank credit agreement, but these subsidiaries will not be guarantors of the new notes. As of December 31, 2000, as adjusted to reflect the AT&T exchange, the impact of the MGM transaction (including the repayment of the loan from Rainbow Media to CSC Holdings) and the monetization of our shares of Charter, Adelphia and AT&T common stock (assuming $1,384 million of net proceeds based on current stock prices), in each case as described in our Form 10-K, as well as the sale of the old notes and the application of the net proceeds thereof on March 22, 2001, - we would have had no borrowings under our credit agreement, $3,690 million of senior unsecured indebtedness, $1,049 million of senior subordinated indebtedness, $54 million of capitalized leases and $1,006 million in cash, - our Restricted Subsidiaries would have had no debt or capital leases but, in accordance with the terms of our credit agreement, certain of the subsidiaries would be guarantors of any borrowings thereunder, and - our Unrestricted subsidiaries would have had $437 million of indebtedness and capitalized leases, and $1,384 million in collateralized indebtedness reflecting monetization activity. We have guaranteed the indebtedness of certain Restricted Subsidiaries under their existing credit facility on a senior basis. We have also guaranteed certain obligations of Unrestricted Subsidiaries that are parties to the monetization transactions. RESTRICTIONS The indenture for the notes, among other things, contains restrictions on our ability and the ability of our Restricted Subsidiaries to: - incur additional indebtedness, - make certain dividend payments or payments to redeem or retire capital stock, - invest in unrestricted subsidiaries or affiliates, - engage in certain transactions with affiliates, - incur liens and - merge or consolidate with or transfer all or substantially all of our assets to another entity.
-10- 12 These covenants are described in greater detail under "Description of the New Notes" below. These covenants are subject to important exceptions and qualifications, which are also described under "Description of the New Notes" below.
-11- 13 SELECTED FINANCIAL DATA CSC HOLDINGS, INC. The historical consolidated statement of operations data, except for the deficiency of earnings available to cover fixed charges and the ratio of earnings to fixed charges, and consolidated balance sheet data for each year ended and as of December 31 in each year in the five-year period ended December 31, 2000, included in the following selected financial data, have been derived from our consolidated financial statements, which were audited by KPMG LLP, independent certified public accountants.
YEARS ENDED DECEMBER 31, ------------------------------------------------------------------------------------ 2000 1999 1998 1997 1996 ---------- ---------- ---------- ---------- ---------- DOLLARS IN THOUSANDS CONSOLIDATED STATEMENT OF OPERATIONS DATA(1): Revenues, net......................... $4,411,048 $3,942,985 $3,265,143 $1,949,358 $1,315,142 Operating expenses: Technical and operating........... 1,696,907 1,535,423 1,268,786 853,800 538,272 Retail electronics cost of sales(2) 549,978 484,760 367,102 -- -- Selling, general and administrative.................. 1,178,934 1,203,119 906,465 514,574 313,476 Depreciation and amortization..... 1,018,246 893,797 734,107 499,809 388,982 ---------- ---------- ---------- ---------- ---------- Operating income (loss)............... (33,017) (174,114) (11,317) 81,175 74,412 Other income (expense): Interest expense, net............. (562,615) (465,740) (402,374) (363,208) (265,015) Provision for preferential payment to related party............. -- -- (980) (10,083) (5,600) Write-off of deferred interest and financing costs(3)........... (5,209) (4,425) (23,482) (24,547) (37,784) Gain on redemption of subsidiary preferred stock.............. -- -- -- 181,738 (4) -- Equity in net loss of affiliates.. (16,685) (19,234) (37,368) (27,165) (82,028) Gain on sale of programming interests and cable assets, net........ 1,209,865 -- 170,912 372,053 -- Impairment charges on investments. (146,429) (15,100) -- -- -- Minority interests................ 625 49,563 37,195 (60,694) (9,417) Miscellaneous, net................ (51,978) (1,470) (19,218) (12,606) (6,647) ---------- ---------- ---------- ---------- ---------- Net income (loss)..................... 394,557 (630,520) (286,632) 136,663 (332,079) Dividend requirements applicable to preferred stock................... (165,304) (170,087) (161,872) (148,767) (127,780) ---------- ---------- ---------- ---------- ---------- Net income (loss) applicable to common stockholder....................... 229,253 $(800,607) $(448,504) $(12,104) (459,859) ========== ========== ========== ========== ========== Deficiency of earnings available to cover fixed charges..................... -- $(630,520) $(286,632) -- $(332,079) ========== ========== ========== ========== ========== Ratio of earnings to fixed charges.... 1.65x -- -- 1.36x -- ========== ========== ========== ========== ==========
-12- 14
AS OF DECEMBER 31, ------------------------------------------------------------------------------------ 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- (DOLLARS IN THOUSANDS) CONSOLIDATED BALANCE SHEET DATA(1): Total assets........................ $8,273,290 $7,130,308 $7,061,025 $5,614,788 $3,034,725 Total debt.......................... 6,539,461 6,094,701 5,357,608 4,694,062 3,334,701 Redeemable preferred stock.......... 1,544,294 1,404,511 1,256,339 1,123,808 1,005,265 Stockholder's deficiency............ (2,566,803) (3,078,413) (2,286,744) (2,711,514) (2,707,026)
AS OF DECEMBER 31, ---------------------------------------------------------------------------------------- 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- (DOLLARS IN THOUSANDS) STATISTICAL DATA (UNAUDITED)(1): Homes passed by cable(5).......... 4,698,000 5,200,000 5,115,000 4,398,000 3,858,000 Basic service subscribers......... 3,193,000 3,492,000 3,412,000 2,844,000 2,445,000 Basic penetration(6).............. 68.0% 67.2% 66.7% 64.7% 63.4% Number of premium television units 7,767,000 7,715,000 6,754,000 4,471,000 4,221,000 Average number of premium units per basic subscriber............. 2.4 2.2 2.0 1.6 1.7 Average monthly revenue per basic subscriber(7)................ $46.57 $44.38 $42.56 $38.53 $36.71 FINANCIAL RATIO AND OTHER DATA (UNAUDITED)(1): Operating profit before depreciation and amortization to revenues. 22.3% 18.3% 22.1% 29.8% 35.2% Total debt to operating profit before depreciation and amortization................. 6.6x 8.5x 7.4x 8.1x 7.2x Operating profit before depreciation and amortization to interest expense...................... 1.7x 1.5x 1.8x 1.6x 1.7x
- -------------------------- (1) The consolidated statement operations, balance sheet, statistical, financial ratio and other data reflect various acquisitions and dispositions of cable television systems and other businesses during the periods presented from the time of acquisition. Acquisitions during the periods presented were accounted for under the purchase method of accounting and, accordingly, the acquisition costs were allocated to the net assets acquired based on their fair value, except for assets previously owned by Mr. Dolan or affiliates of Mr. Dolan which were recorded at historical cost. (2) Beginning with the acquisition of the assets associated with The Wiz consumer electronics store locations in February 1998, we record costs of sales related to these operations, which includes the costs of merchandise sold , including associated freight costs, as well as store occupancy and buying costs. (3) In April 1996, we wrote off approximately $24.0 million of deferred interest and financing costs in connection with the refinancing of all indebtedness of V Cable and VC Holding, Inc. and the formation of Cablevision of Ohio. In September 1996, we wrote off approximately $10.7 million of deferred financing costs in connection with the refinancing of our credit agreement, and in the fourth quarter of 1996, an additional $3.1 million of deferred financing costs relating to our MFR subsidiary were written off in connection with a reorganization and refinancing of Cablevision MFR, Inc. In July 1997, we paid a premium of approximately $8.4 million to redeem our 10% Senior Subordinated Debentures due 2004 and wrote off deferred financing costs of approximately $5.3 million in connection therewith. Also in 1997, we wrote off deferred financing costs of $4.1 million in connection with the repayment of Cablevision of Ohio's bank debt and $6.5 million in connection with the amendment to and repayment of the terms loans under the Madison Square Garden credit facility. In 1998, we paid a premium of $14.9 million to -13- 15 redeem the senior notes assumed by our CCG Holdings subsidiary in the Clearview Cinemas acquisition and wrote off deferred financing costs of $4.7 million in connection with the refinancing of our credit agreement. In 1999, we wrote off $4.4 million of deferred financing costs in connection with amendments to our credit agreement. In 2000, we wrote off $5.2 million of deferred financing costs in connection with amendments to, or termination of, our credit agreements. (4) In July 1997, we redeemed the Series A preferred stock of A-R Cable and recognized a gain principally representing the reversal of accrued preferred dividends in excess of amounts paid. (5) Homes passed is based upon homes passed by cable actually marketed and does not include multiple dwelling units passed by the cable plant that are not connected to it. (6) Basic penetration represents basic service subscribers at the end of the period as a percentage of homes passed at the end of the period. (7) Based on recurring service revenues, excluding installation charges and certain other revenues such as advertising, pay-per-view and home shopping revenues, for the month of December divided by the average number of basic subscribers for that month. -14- 16 RISK FACTORS You should consider carefully the risk factors described below, together with the other matters described in this document or incorporated by reference, before deciding to exchange your old notes for new notes. The risk factors below apply to both the old notes and the new notes. RISK FACTORS RELATING TO THE NOTES WE HAVE SUBSTANTIAL INDEBTEDNESS AND WE ARE HIGHLY LEVERAGED AS A RESULT We have incurred, and we will continue to incur in the future, substantial amounts of indebtedness to finance operations, expand and upgrade cable operations and acquire other cable television systems, programming networks, sources of programming and other businesses. We also have incurred, and we will continue to incur, indebtedness in order to offer new services such as high-speed Internet access, digital video service and commercial telephone service to present and potential customers. In addition, we have borrowed, and we will continue to borrow, money from time to time to refinance existing indebtedness and redeem our mandatorily redeemable preferred stock. At December 31, 2000, our consolidated debt plus the amount of our two series of mandatorily redeemable preferred stock totaled $8.1 billion. We urge you to read carefully our consolidated financial statements contained in our Form 10-K which provides more information about our indebtedness and our mandatorily redeemable preferred stock. Because of our substantial indebtedness and mandatorily redeemable preferred stock, we are highly leveraged. This means that our payments on our borrowings and our mandatorily redeemable preferred stock are significant in relation to our revenues and cash flow. This leverage exposes us to significant risk in the event of downturns in our businesses, in our industries or in the economy generally, since our cash flows could decrease in this scenario, but our required payments in respect of indebtedness and preferred stock will not decrease. THE NEW NOTES WILL BE EFFECTIVELY SUBORDINATED TO ALL EXISTING AND FUTURE INDEBTEDNESS OF OUR SUBSIDIARIES We are a holding company whose assets consist primarily of investments in subsidiaries. Our principal subsidiaries are various entities that own cable television systems, own interests in programming networks and own or operate retail electronics stores and motion picture theaters. Our ability to pay interest on and repay principal of our indebtedness and to make dividend payments on and redemptions of our preferred stock is dependent primarily upon the earnings of our subsidiaries and the distribution or other payment of these earnings to us in the form of dividends, loans or advances. Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay amounts due on our public indebtedness or preferred stock or to make any funds available to us to do so. Certain subsidiaries of Rainbow Media Holdings, Inc. are parties to credit agreements that contain various financial and operating covenants that restrict the payment of dividends or other distributions. -15- 17 In addition, our subsidiaries' creditors would be entitled to a claim on the assets of such subsidiaries prior to any of our claims as a stockholder. Consequently, in the event of a liquidation or reorganization of any subsidiary, creditors of that subsidiary are likely to be paid in full before any distribution is made to us. To the extent that we are a creditor of such subsidiary, our claims would be subordinated to any security interest in the assets of such subsidiary and/or any indebtedness of such subsidiary senior to that held by us. SIGNIFICANT RESTRICTIVE COVENANTS IN OUR FINANCING AGREEMENTS LIMIT OUR FLEXIBILITY Our credit agreement and some of our debt instruments contain various financial and operating covenants which, among other things, require the maintenance of some financial ratios and restrict our ability to incur debt from other sources and to use funds for various purposes, including investments in some subsidiaries. Violation of these covenants could result in a default which would permit the parties who have lent money under our credit agreement and other debt instruments to: - restrict our ability to borrow undrawn funds under our credit agreement and - require the immediate repayment of the borrowings under our credit agreement and other debt instruments. IF YOU DO NOT PARTICIPATE IN THE EXCHANGE OFFER, IT MAY BE HARDER FOR YOU TO RESELL AND TRANSFER YOUR OLD NOTES The old notes were not registered under the Securities Act or under the securities laws of any state. Thus, you may not resell the old notes, offer them for resale or otherwise transfer them unless they are subsequently registered or resold under an exemption from the registration requirements of the Securities Act and applicable state securities laws. If you do not exchange your old notes for new notes by this exchange offer, or if you do not properly tender your old notes in this exchange offer, you will not be able to resell, offer to resell or otherwise transfer your old notes unless they are registered under the Securities Act or unless you resell them, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act. In addition, you will no longer be able to obligate us to register your old notes under the Securities Act. RISKS RELATING SPECIFICALLY TO CSC HOLDINGS OUR FINANCIAL STATEMENTS REFLECT NET LOSSES AND A STOCKHOLDER'S DEFICIENCY We have reported recent net losses applicable to our common stockholder as follows:
FOR THE YEAR ENDED: December 31, 1999.................................................... $800.6 million December 31, 1998.................................................... $448.5 million
-16- 18 Net losses applicable to common stockholder are calculated by subtracting (1) operating expenses, including depreciation and amortization, (2) interest expense, (3) preferred stock dividends, (4) other income and expenses, and (5) net profit or loss from affiliate operations from gross revenues. As a result of $1.2 billion in gains from the exchange of our cable television systems with Charter Communications, Inc. and Adelphia Communications Corporation for common stock and cash, we had net income applicable to our common stockholder of $229.3 million in 2000. The net losses applicable to common stockholder described above primarily reflect our high interest expense, preferred stock dividends and depreciation and amortization charges, which we expect to continue. As a result of these net losses applicable to common stockholder, at December 31, 2000, we had a stockholder's deficiency of $2.6 billion. We urge you to read carefully our consolidated financial statements contained in our Form 10-K, which provide more detailed information about these net losses. We expect our net losses to continue and to remain substantial for the foreseeable future because: - interest expense, preferred stock dividends and depreciation and amortization charges relating to our existing indebtedness and preferred stock and completed acquisitions and capital expenditures will remain high for the foreseeable future, - we expect that future indebtedness incurred to fund the development of our existing and new businesses, including, but not limited to, capital expenditures and additional investments in our cable television plant and programming operations, as well as potential future acquisitions, will result in higher levels of interest expense, and - we expect expenses and depreciation relating to each new service we offer to be particularly high in relation to the amount of revenues the new service will generate in its first years of operations, resulting in significant net losses each time we begin offering a new service or supporting a new business we acquire. WE WILL NEED SIGNIFICANT ADDITIONAL BORROWINGS AND WE HAVE COMMITTED TO SIGNIFICANT FUTURE CAPITAL EXPENDITURES AND OTHER CAPITAL COMMITMENTS. Our business is very capital-intensive. Operating, maintaining and upgrading our cable television plant require significant amounts of cash payments to third parties. In addition, we are incurring, and will continue to incur, significant expenses to start up and operate new businesses, like high-speed Internet access, digital video service and residential telephone service, and to roll out the non-Long Island based commercial telephone businesses. Capital expenditures for our cable, commercial telephone and New Media businesses were $598 million in 1999 and $1,033 million in 2000 and, as previously announced, are forecasted to be between $1.0 billion and $1.1 billion in 2001. We expect these expenses to continue to grow over the next several years, as we continue to introduce these and possibly other new services to our customers. -17- 19 Some of our subsidiaries have substantial future capital commitments in the form of long-term contracts that require substantial payments over a long period of time. For example, rights agreements with sports teams under which their games are carried on the networks of certain of our programming subsidiaries almost always involve multi-year contracts that are difficult and expensive to terminate. Accordingly, if we are forced to cancel or scale back current and future spending programs as described above, our choice of which spending programs to cancel or scale back may be limited. We also incur significant start-up costs in funding new cable programming services before they have positive cash flow, typically during their start-up and development. Our acquisition and development of programming, entertainment facilities and other businesses, like electronics retailing and movie theaters, also result in significant expenditures. We also pay a significant amount of interest in respect of our outstanding indebtedness, and significant amounts of cash will be required to repay our existing indebtedness and redeem our mandatorily redeemable preferred stock. We will not be able to generate sufficient cash internally to finance these projects, to repay our indebtedness at maturity and to redeem our mandatorily redeemable preferred stock at the mandatory redemption date. Because we will be unable to generate sufficient cash internally for these purposes, we will have to do one of the following: - raise additional capital, through debt or equity issuances or both, - expand credit availability under our existing credit agreement, - cancel or scale back current and future spending programs, or - sell or monetize assets. However, you should not assume that we will be able to raise any additional capital. Moreover, if we are unable to pursue our current and future spending programs, we may not be able to compete effectively. A SIGNIFICANT AMOUNT OF OUR BOOK VALUE CONSISTS OF INTANGIBLE ASSETS At December 31, 2000 we reported $8.3 billion of consolidated total assets, of which $2.4 billion were intangible. Intangible assets include assets like franchises from city and county governments to operate cable television systems, affiliation agreements, amounts representing the cost of some acquired assets in excess of their fair value and some deferred costs associated with past financings, acquisitions and other transactions. You should not assume that we would receive any cash from the voluntary or involuntary sale of these intangible assets. We urge you to read carefully our consolidated financial statements contained in our Form 10-K, which provide more detailed information about these intangible assets. WE ARE CONTROLLED BY THE DOLAN FAMILY -18- 20 We are a wholly owned subsidiary of Cablevision. Cablevision has two classes of common stock: - Class B common stock, which is generally entitled to ten votes per share and is entitled collectively to elect 75% of the Cablevision board of directors, and - Class A common stock, which is entitled to one vote per share and is entitled collectively to elect the remaining 25% of the Cablevision board of directors. Cablevision's two classes of common stock each consist of two series, the Cablevision NY Group and the Rainbow Media Group, and both series within a class generally vote together. Our chairman, Charles F. Dolan, as of January 1, 2001, owned less than 1% of the Class A common stock, 54.2% of the Class B common stock and 41.4% of the total voting power of both classes of common stock. In addition, certain trusts for the benefit of members of his family, as of January 1, 2001, owned 2.4% of the Class A common stock, 45.8% of the Class B common stock and 35.4% of the total voting power of both classes of common stock. The Dolan family is therefore able to prevent or cause a change in control of Cablevision and no person interested in acquiring Cablevision or CSC Holdings will be able to do so without obtaining the consent of the Dolan family. As a result of Mr. Dolan's stock ownership and the stock ownership of his family members, Mr. Dolan has the power to elect all the directors of Cablevision subject to election by holders of Class B stock. In addition, Dolan family members may control stockholder decisions on matters in which holders of Cablevision common stock vote together as a class. These matters include the amendment of some provisions of Cablevision's certificate of incorporation and the approval of fundamental corporate transactions, including mergers. Because the tracking stock distribution, described under "CSC Holdings, Inc.", was a pro rata distribution, the tracking stock distribution will not alter the control rights of Mr. Dolan and his family members. In addition, because the affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Class B stock, voting separately as a class, is required to approve: - the authorization or issuance of any additional shares of Class B stock and - any amendment, alteration or repeal of any of the provisions of Cablevision's certificate of incorporation that adversely affects the powers, preferences or rights of the Class B stock. Dolan family members also have the power to prevent such issuance or amendment. The voting rights of the Class B stock beneficially owned by Mr. Dolan and his spouse will not be modified as a result of any transfer of legal or beneficial ownership of the Class B stock. REGULATORY RISKS ARE INHERENT AND SUBSTANTIAL IN OUR BUSINESSES -19- 21 General. The FCC and state and local governments extensively regulate the basic rates we may charge our customers for video services. They also regulate us in other ways that affect the daily conduct of our video delivery and video programming businesses, our telephone business and possibly in the future, our high-speed Internet access business. Any action by the FCC, the states of New York, New Jersey or Connecticut, or concerted action by local regulators, the likelihood or extent of which we cannot predict, could have a material financial effect on us. For example, in 1992, Congress enacted the Cable Television Protection and Competition Act of 1992 (the "1992 Cable Act"), which was a significant change in the regulatory framework under which cable television systems operate. In 1993 and 1994, the FCC ordered reductions in cable television rates based on the 1992 Cable Act. Congress subsequently enacted the Telecommunications Act of 1996, which relaxed the regulation of higher tier cable television rates. This higher tier rate deregulation went into effect on March 31, 1999. The regulation by local governments of basic cable rates will continue in most communities in which we operate. Recent FCC and Congressional issues may affect our businesses. A federal appellate court recently held unconstitutional the FCC's national 30% limit on the number of households that any cable company can serve. This ruling could affect us because of AT&T's investment in Cablevision through its acquisition of TCI. Some parties have proposed statutory and regulatory requirements that would force cable systems to provide carriage to third-party Internet service providers. The FCC thus far has rejected these requests, but legislation has been introduced in Congress and several state legislatures that would effectively require that this access be provided. We cannot predict at this time whether or to what extent this legislation might be successful or whether the FCC might reevaluate its initial conclusion not to impose such regulation. Several federal court decisions have invalidated local franchising authority requirements that the cable system in the community provide access to all third-party Internet service providers. Some local franchising authorities where we operate might attempt to impose a similar requirement on us. These local franchising authority actions, and the subsequent court decisions, have led the FCC to open an inquiry into how to classify the provision of this service by a cable system or other multichannel video provider, and whether to impose any regulatory obligations on such a service. Our current franchises are generally non-exclusive, and our franchisors need not renew our franchises. Our cable television systems are operated primarily under non-exclusive franchise agreements with local government franchising authorities, in some cases with the approval of state cable television authorities. Consequently, our business is dependent on our ability to obtain and renew our franchises. Although we have never lost a franchise as a result of a failure to obtain a renewal, our franchises are subject to non-renewal or termination under some circumstances. In some cases, franchises have not been renewed at expiration, and we operate under either temporary operating agreements or without a license while negotiating renewal terms with the franchising authorities. WE ARE EXPOSED TO A SIGNIFICANT AND CREDIBLE RISK OF COMPETITION. -20- 22 General. Cable operators compete with a variety of television programming distribution systems, including: - broadcast television stations, - direct broadcasting satellite systems, - multichannel multipoint distribution services, - satellite master antenna systems and - private home dish earth stations. For example, two direct broadcasting satellite systems are now operational in the United States. Companies with substantial resources like Hughes Electronics Corp. have invested in direct broadcast satellite systems. Cable systems also compete with the entities that make videotaped movies and programs available for home rental. The Telecommunications Act of 1996 gives telephone companies and other video providers the option of providing video programming to subscribers through "open video systems," a wired video delivery system similar to a cable television system that may not require a local cable franchise. RCN, an open video system operator that teams with electric utilities, is currently operating systems in parts of New York City and New Jersey that compete with us. Additional video competition to cable systems is possible from new wireless local multipoint distribution services authorized by the FCC, for which spectrum was recently auctioned by the FCC. The 1992 Cable Act prohibits a cable programmer that is owned by or affiliated with a cable operator, like our subsidiary Rainbow Media, from: - unreasonably discriminating among or between cable operators and other multichannel video distribution systems with respect to the price, terms and conditions of sale or distribution of the programmer's service and - unreasonably refusing to sell service to any multichannel video programming distributor. Competition from telephone companies. The Cable Communications Policy Act of 1984 barred co-ownership of telephone companies and cable television systems operating in the same service areas. The Telecommunications Act of 1996 repealed this restriction and permits a telephone company to provide video programming directly to subscribers in its telephone service territory, subject to some regulatory requirements. Southern New England Telephone Co. in Connecticut has obtained a statewide franchise to construct and operate cable television systems in several communities in which we currently hold cable franchises, and began offering service in competition with us, but has now petitioned the state to discontinue its video operations. In addition to now -21- 23 being able to compete with us for video customers, telephone companies are substantial competitors to our high-speed Internet access and switched telephone businesses. USE OF PROCEEDS We will not receive any cash proceeds from the issuance of the new notes as described in this document. We will receive in exchange old notes in like principal amount. The old notes surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. Therefore, the issuance of the new notes will not result in any change in our indebtedness. We used the cash proceeds from the issuance of the old notes to repay borrowings under our credit agreement and for general corporate purposes. The borrowings under our credit agreement bear interest at floating rates, and the amount of commitment available under the credit agreement begins to decrease in June 2001. The average effective annual interest rate on all borrowings under our credit agreement as of December 31, 2000 was 8.03%. For more information about our credit agreement, see "Management's Discussion and Analysis--Liquidity and Capital Resources" in our Form 10-K. CSC HOLDINGS, INC. We are one of the largest operators of cable television systems in the United States, with approximately 2,831,000 subscribers as of December 31, 2000 in the New York metropolitan area, based on the number of basic subscribers in systems that we majority own and manage. We also have ownership interests in companies that produce and distribute national and regional programming services and provide advertising sales services for the cable television industry and in the Madison Square Garden sports and entertainment business, also known as "MSG". Through Cablevision Lightpath, Inc., our wholly owned subsidiary, we provide switched telephone service. We also own Cablevision Electronics Investments, Inc., doing business as The Wiz, an electronics retailer operating 42 retail locations in the New York City metropolitan area, and CCG Holdings, Inc., doing business as Clearview Cinemas, an owner and operator of motion picture theaters in the New York City metropolitan area. For financing purposes, we are structured as a Restricted Group and an Unrestricted Group. Our Restricted Group includes (1) all of our cable operations, which are located primarily in and around metropolitan New York City, including Long Island, and (2) the commercial telephone operations of our subsidiary, Cablevision Lightpath, on Long Island, New York. Our Unrestricted Group includes primarily: - Rainbow Media, our 74%-owned subsidiary that conducts our programming and entertainment activities and includes an 80% interest in each of AMC, Bravo, The Independent Film Channel and WE: Women's Entertainment; a 60% general partnership interest in Regional Programming Partners; a 50% general partnership interest in National Sports Partners; and a 50% general partnership interest in National Advertising Partners, -22- 24 - Rainbow Advertising, which sells advertising time on behalf of our cable television systems, certain of Rainbow Media's programming networks and some unaffiliated cable television systems, - CSC Technology, Inc., our subsidiary engaged in research and development of new technology, - Cablevision Electronics Investments, Inc., doing business as The Wiz, - CSC At Home Holding Corporation, our subsidiary that holds warrants to acquire approximately 20.4 million shares of common stock of At Home Corporation, - CCG Holdings, doing business as Clearview Cinemas, - our interest in Northcoast Communications, LLC, an entity that holds certain licenses to conduct a personal communications service business, and - our shares of common stock of AT&T, Adelphia and Charter. Our Restricted Group and certain members of our Unrestricted Group are individually and separately financed. The indebtedness of each entity in our Unrestricted Group is non-recourse to us, except that, in certain cases, we have pledged our capital stock in such entities to the relevant lenders or provided guarantees of certain obligations. Rainbow Media's historical cash requirements have been financed by sales of equity interests in its programming businesses and through separate external debt financing of AMC and MSG, which are, as to the assets of Rainbow Media and such subsidiaries, structurally senior to the notes offered by this registration statement and our other indebtedness. We refer you to "Management's Discussion and Analysis--Liquidity and Capital Resources" in our Form 10-K for a discussion of the restrictions on investments by the Restricted Group and certain other matters. See "Where You Can Find More Information" below. In February 2001, Cablevision's shareholders approved amendments to Cablevision's charter to allow the creation of a series of Cablevision stock called the Rainbow Media Group tracking stock. On March 29, 2001, we made a pro rata distribution of the Rainbow Media Group tracking stock to holders of Cablevision common stock, which was redesignated as Cablevision NY Group common stock. The Rainbow Media Group tracking stock is a separate class of Cablevision common stock. The Rainbow Media Group is not a separate legal entity. All of the businesses and assets included in the Rainbow Media Group are held by Unrestricted Subsidiaries of CSC Holdings and those subsidiaries will continue to be Unrestricted Subsidiaries following the tracking stock distribution. -23- 25 STRATEGY Our strategy is to concentrate our cable television systems in and around the New York metropolitan area with a view to being a significant cable provider in this market, to maximize our revenue per subscriber by marketing premium services, to develop and promote niche programming and entertainment services, and to remain an industry leader in upgrading the technological capabilities of our systems. We believe that our cable television systems on Long Island, New York comprise the largest contiguous group of cable television systems under common ownership in the United States as measured by number of subscribers. By developing systems in and around the New York metropolitan area, including expansion through acquisitions in areas in which we have existing systems, we have been able to realize economies of scale in the operation and management of our systems and to capitalize on opportunities to create and market programming of regional interest. Through the current and planned upgrade of our cable plant, including the utilization of fiber optic cable and associated electronics, we are seeking to significantly increase our analog channel capacity and add new digital channel capacity that will facilitate the startup of such adjunct businesses as information services, interactive services, including Internet access, near video on demand, video on demand, residential telephone and commercial telephone. To successfully roll out these adjunct new businesses significantly beyond the initial development phases, we will require additional capital. For more information regarding the capital needed for our future expenditures, see "Risk Factors--We Will Need Significant Additional Borrowings and We Have Committed to Significant Future Capital Expenditures and Other Capital Commitments". THE EXCHANGE OFFER WHY WE ARE OFFERING TO EXCHANGE YOUR OLD NOTES FOR NEW NOTES We originally sold the outstanding 7 5/8% Senior Notes due 2011 on March 22, 2001, in a transaction exempt from the registration requirements of the Securities Act. Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc. as the initial purchasers, then resold the notes to qualified institutional buyers under Rule 144A and to persons in offshore transactions under Regulation S under the Securities Act. As of the date of this document, $1 billion aggregate principal amount of old notes is outstanding. As a condition to the initial sale of the old notes, we entered into a registration rights agreement with the initial purchasers under which we agreed that we would, at our own cost: (1) file an exchange offer registration statement under the Securities Act with the SEC by May 21, 2001 -24- 26 and (2) use our reasonable best efforts to: - cause the exchange offer registration statement to be declared effective under the Securities Act by September 18, 2001, and - keep the exchange offer open for no less than 30 days, and - complete the exchange 30-40 days after notice of the exchange is mailed to holders of old notes. We agreed to issue and exchange the new notes for all old notes tendered and not withdrawn before the exchange offer expires. THE SUMMARY IN THIS DOCUMENT OF THE REGISTRATION RIGHTS AGREEMENT IS NOT COMPLETE AND IS SUBJECT TO, AND IS QUALIFIED IN ITS ENTIRETY BY, ALL THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT. WE URGE YOU TO READ THE ENTIRE REGISTRATION RIGHTS AGREEMENT CAREFULLY. We filed a copy of the registration rights agreement as an exhibit to the registration statement of which this document is a part. We intend to satisfy some of our obligations under the registration rights agreement with the registration statement. TERMS OF THE EXCHANGE OFFER TIMING OF THE EXCHANGE OFFER. We are offering the new notes in exchange for your old notes. We will keep the exchange offer open for at least 30 days, or longer if required by applicable law, after the date notice of the exchange offer is mailed to the holders of the old notes. YOU MAY TENDER YOUR OLD NOTES ONLY IN MULTIPLES OF $1,000. On the terms and subject to the conditions in this document and in the accompanying letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn before 5:00 p.m., New York City time, on [EXCHANGE DATE]. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of outstanding old notes accepted in the exchange offer. You may tender some or all of your old notes under the exchange offer. However, you may tender old notes only in multiples of $1,000. FORM AND TERMS OF THE NEW NOTES. The form and terms of the new notes will be the same as the form and terms of the old notes except that: - the new notes will have a different CUSIP number from the old notes, -25- 27 - the new notes will be registered under the Securities Act and will not have legends restricting their transfer, - the new notes will not contain terms providing for payment of liquidated damages under circumstances relating to the timing of the exchange offer, as described under "Liquidated Damages" below and - holders of the new notes will not be entitled to any registration rights under the registration rights agreement because these rights will terminate when the exchange offer is completed. The new notes will evidence the same debt as the old notes and will be issued under, and be entitled to the benefits of, the indenture governing the old notes. We will treat both series of notes as a single class of debt securities under the indenture. WHO WILL RECEIVE THIS DOCUMENT. We will mail this document and the letter of transmittal to all registered holders of the old notes as of [RECORD DATE]. NO APPRAISAL OR DISSENTERS' RIGHTS. In connection with the exchange offer, you do not have any appraisal or dissenters' rights under the General Corporation Law of the State of Delaware or the indenture governing the old notes. We intend to conduct the exchange offer in accordance with the registration rights agreement, the applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations of the SEC related to exchange offers. ACCEPTANCE OF TENDERED OLD NOTES. We will be deemed to have accepted validly tendered old notes when, as and if we have given oral or written notice of acceptance to The Bank of New York, as the exchange agent for the exchange offer. The exchange agent will act as agent for the tendering holders for the purpose of receiving the new notes from us. If we do not accept your old notes tendered for exchange because you: - invalidly tendered your old notes or - some other events specified in this document have occurred or - you submitted your old notes for a greater principal amount than you wanted to exchange, we will return the certificates for the unaccepted old notes, without expense, to you. If you tender old notes by book-entry transfer in the exchange agent account at The Depository Trust Company in accordance with the book-entry transfer procedures described below, any non-exchanged old notes -26- 28 will be credited to an account maintained with The Depositary Trust Company as soon as possible after the expiration date of the exchange offer. EXPIRATION DATE The exchange offer will expire at 5:00 p.m., New York City time, on [DATE], 2001, unless we extend the exchange offer in our sole discretion. If we extend the exchange offer, the expiration date is the latest date and time to which we extend the exchange offer. WE CAN AMEND OR EXTEND THE EXCHANGE OFFER We can extend the exchange offer. To do so we must: - notify the exchange agent of any extension either orally or in writing and - make an announcement of the extension before 9:00 a.m., New York City time, on the next business day after the previous date the exchange offer was scheduled to expire. We also reserve the right to: - delay accepting any old notes or - terminate the exchange offer and refuse to accept any old notes not previously accepted if any of the conditions described below under "How to Tender Your Old Notes-- Conditions" shall have occurred and we have not waived them. If we delay, extend or terminate the exchange offer we must give oral or written notice to the exchange agent. We may also amend the terms of the exchange offer in any way we determine is advantageous to holders of the old notes. If this change is material, we will promptly disclose that amendment in a manner reasonably calculated to inform holders of the old notes. We do not have to publish, advertise or otherwise communicate any public announcement of any delay, extension, amendment or termination that we may choose to make, other than by making a timely release to the Dow Jones News Service. -27- 29 INTEREST ON THE NEW NOTES Interest is payable on the old notes, and will be payable on the new notes, on April 1 and October 1 of each year. The new notes will accrue interest on the same terms as the old notes, at the rate of 7 5/8% per year from March 22, 2001, the date we issued the old notes. If you hold old notes and they are accepted for exchange you will waive your right to receive any payment in respect of interest on your old notes accrued from March 22, 2001 to the date the new notes are issued. Thus, if you exchange your old notes for new notes you will receive the same interest payment on October 1, 2001, which is the first interest payment date with respect to the old notes and the new notes, that you would have received had you not accepted the exchange offer. RESALE OF THE NEW NOTES We believe that you will be allowed to resell the new notes to the public without registration under the Securities Act and without delivering a prospectus that satisfies the requirements of the Securities Act, if you can make the representations set forth in the letter of transmittal, described in "How To Tender Your Old Notes--Representations on Tendering Old Notes". If you intend to participate in a distribution of the new notes, however, you must comply with the registration requirements of the Securities Act and deliver a prospectus, unless an exemption from registration is otherwise available. In addition, you cannot be an "affiliate" of CSC Holdings as defined in Rule 405 under the Securities Act. You must represent to us in the letter of transmittal accompanying this document that you meet these conditions exempting you from the registration requirements. We base our view on interpretations by the staff of the SEC in no-action letters issued to other issuers in exchange offers like ours. We have not, however, asked the SEC to consider this particular exchange offer in the context of a no-action letter. Therefore, you cannot be sure that the SEC will treat this exchange offer in the same way it has treated other exchange offers in the past. If our belief is wrong, you could incur liability under the Securities Act. We will not protect you against any loss incurred as a result of this liability under the Securities Act. A broker-dealer that has bought old notes for market-making or other trading activities must deliver a prospectus in order to resell any new notes it has received for its own account in the exchange. A broker-dealer may use this prospectus to resell any of its new notes. We agreed in the registration rights agreement to make this prospectus, and any amendment or supplement to this prospectus, available to any broker-dealer that requests copies until 90 days after the last exchange date. See "Plan of Distribution" below for more information regarding broker-dealers. SHELF REGISTRATION STATEMENT We will file a shelf registration statement with the SEC if: (1) applicable law or SEC policy does not permit the exchange offer or -28- 30 (2) the exchange offer is not completed by September 18, 2001. The shelf registration statement will register the old notes for public resale. We will use our best efforts to cause the shelf registration statement to become effective and to keep the shelf registration statement effective until March 22, 2003. LIQUIDATED DAMAGES We will have to pay higher annual interest rates on the notes if: - we do not file the exchange offer registration statement by May 21, 2001 or the exchange offer is not completed by September 18, 2001 or - the shelf registration statement is not declared effective by September 18, 2001 The interest rates will increase as follows:
MAXIMUM INTEREST RATE EVENT INTEREST RATE INCREASE INCREASE ----- ---------------------- ------------- The exchange offer registration - 1/4% per year each day 1% per year statement is not filed by for the first 30 days after May 21, 2001 May 21, 2001 that the exchange offer registration statement is not filed - An additional 1/4% per year each day at the beginning of each subsequent 30-day period that the exchange offer registration statement is not filed The exchange offer is not - 1/4% per year each day 1% per year completed by for the first 180 days September 18, 2001 after September 18, 2001 that the exchange offer is not completed
-29- 31
MAXIMUM INTEREST RATE EVENT INTEREST RATE INCREASE INCREASE ----- ---------------------- ------------- - An additional 1/4% per year each day at the beginning of each subsequent 90-day period that the exchange offer is not completed The shelf registration statement - 1/4% per year each day 1% per year is not declared effective by for the first 180 days September 18, 2001 after September 18, 2001 that the shelf registration statement is not declared effective - An additional 1/4% per year each day at the beginning of each subsequent 90-day period that the shelf registration statement is not declared effective
The interest rate will be reduced to the original rate once we: - file the exchange offer registration statement or - complete the exchange offer or - the shelf registration statement is declared effective. HOW TO TENDER YOUR OLD NOTES PROCEDURES FOR TENDERING To tender your old notes in the exchange offer, you must do the following: - properly complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal, -30- 32 - if the letter of transmittal so requires, have the signatures on the letter of transmittal or facsimile of the letter of transmittal guaranteed and - mail or otherwise deliver the letter of transmittal, or facsimile, together with your old notes and any other required documents, to the exchange agent before 5:00 p.m., New York City time, on the expiration date of the exchange offer. In order for the tender to be effective, the exchange agent must receive the old notes, a completed letter of transmittal and all other required documents before 5:00 p.m., New York City time, on the expiration date. You may also deliver your old notes by using the book-entry transfer procedures described below. DTC authorizes its participants that hold old notes on behalf of beneficial owners of old notes through DTC to tender their old notes as if they were holders. To effect a tender of old notes, DTC participants should: - complete and sign the letter of transmittal or a manually signed facsimile of the letter, - have the signature on the letter of transmittal or facsimile of the letter of transmittal guaranteed if the instructions to the letter of transmittal so require, - mail or deliver the letter of transmittal, or the manually signed facsimile, to the exchange agent according to the procedure described under "Procedures for Tendering" above and - transmit their acceptance to DTC through its automated tender offer program for which the transaction will be eligible and follow the procedure for book-entry transfer described below under "Book-Entry Transfer". YOU MUST FOLLOW ALL PROCEDURES TO EFFECT A VALID TENDER. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. By tendering, you will make the representations described under the heading "Representations on Tendering Old Notes". In addition, each participating broker-dealer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. See "Plan of Distribution". Your tender and our acceptance of the tender will constitute the agreement between you and us set forth in this document and in the letter of transmittal. YOU HAVE THE SOLE RISK OF THE METHOD YOU CHOOSE TO HAVE THE OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS DELIVERED TO THE EXCHANGE AGENT. As an alternative to delivery by mail, holders may wish to consider overnight or hand delivery service. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE -31- 33 AGENT BEFORE THE EXPIRATION DATE. No letter of transmittal, old notes or book-entry confirmation should be sent to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions on their behalf. BENEFICIAL OWNERS If you hold old notes and your old notes are registered in the name of a broker-dealer, commercial bank, trust company or other nominee and you wish to tender your old notes, you should contact the registered holder promptly and instruct it to tender on your behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal. If you hold old notes that are registered as described above and you want to tender on your own behalf, you must, before completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take a long time. SIGNATURES ON LETTER OF TRANSMITTAL Generally, an eligible guarantor institution must guarantee signatures on a letter of transmittal or a notice of withdrawal unless the old notes are tendered: - by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal or - for the account of an eligible guarantor institution. An "eligible guarantor institution" is: - a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., - a commercial bank or trust company having an office or correspondent in the U.S. or - an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act which is a member of one of the recognized signature guarantee programs identified in the letter of transmittal. If a person other than the registered holder of any old notes listed in the letter of transmittal signed the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power. The bond power must authorize this person to tender the old notes on behalf of the registered holder and must be signed by the registered holder as the registered holder's name appears on the old notes. -32- 34 If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity sign the letter of transmittal or any old notes or bond powers, these persons should so indicate when signing, and unless waived by us, submit with the letter of transmittal evidence satisfactory to us of their authority to so act. BOOK-ENTRY TRANSFER Within two business days after the date of this prospectus the exchange agent will establish a new account or utilize an existing account with respect to the old notes at the book-entry transfer facility, The Depository Trust Company, for the purpose of facilitating the exchange offer. Subject to the establishment of the accounts, any financial institution that is a participant in DTC's system may make book-entry delivery of old notes by causing DTC to transfer the old notes into the exchange agent's account with respect to the old notes in accordance with DTC's procedures. Although delivery of the old notes may be effected through book-entry transfer into the exchange agent's account at DTC, the exchange agent must receive an appropriate letter of transmittal properly completed and duly executed with any required signature guarantee or an agent's message and all other required documents at its address listed below under " Exchange Agent" on or before the expiration date of the exchange offer, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under those procedures. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent, which states that DTC has received an express acknowledgment from the participant in DTC tendering the old notes stating: - the aggregate principal amount of old notes which have been tendered by the participant, - that the participant has received, and agrees to be bound by, the terms of the letter of transmittal and - that we may enforce this agreement against the participant. Delivery of an agent's message will also constitute an acknowledgment from the tendering DTC participant that the representations contained in the letter of transmittal and described below in this document are true and correct. ACCEPTANCE OF TENDERED NOTES We will determine, in our sole discretion, all questions as to the validity, form, acceptance, withdrawal and eligibility, including time of receipt, of tendered old notes. We reserve the absolute right: - to reject any and all old notes not properly tendered, -33- 35 - to reject any old notes if our acceptance would, in the opinion of our counsel, be unlawful and - to waive any irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, you must cure any defects or irregularities in connection with tenders of old notes within a period of time that we will determine. Neither we, nor the exchange agent, nor any other person will be liable for failure to give notice of any defect or irregularity with respect to any tender of old notes. We will not deem a tender of an old note to have been made until the defects or irregularities mentioned above have been cured or waived. The exchange agent will return to the tendering holders any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived, unless otherwise provided in the letter of transmittal, as soon as practicable after the exchange offer expires. REPRESENTATIONS ON TENDERING OLD NOTES By surrendering old notes in the exchange offer, you will be telling us that, among other things: - you are acquiring the new notes issued in the exchange offer in the ordinary course of your business, - you are not an "affiliate", as defined in Rule 405 under the Securities Act, of CSC Holdings, - you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in the distribution of the new notes issued to you in the exchange offer, - you have full power and authority to tender, sell, assign and transfer the old notes tendered, - we will acquire good, marketable and unencumbered title to the old notes being tendered, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sale agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim when the old notes are accepted by us and - you acknowledge and agree that if you are a broker-dealer registered under the Exchange Act or you are participating in the exchange offer for the purposes of -34- 36 distributing the new notes, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale of the new notes, and you cannot rely on the position of the SEC's staff in their no-action letters. If you are a broker-dealer and you will receive new notes for your own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities, you will be required to acknowledge in the letter of transmittal that you will deliver a prospectus in connection with any resale of the new notes. GUARANTEED DELIVERY PROCEDURES If you wish to tender your old notes and: - you cannot deliver your old notes, the letter of transmittal or any other required documents to the exchange agent before the expiration date, - you cannot complete the procedure for book-entry transfer before the expiration date or - your old notes are not immediately available in order for you to meet the expiration date deadline, then you may participate in the exchange offer if: (1) the tender is made through an eligible institution, (2) before the expiration date, the exchange agent receives from the eligible guarantor institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us, by facsimile transmission, mail or hand delivery, containing: - the name and address of the holder of the old notes, the certificate number or numbers of the old notes and the principal amount of old notes tendered, - a statement that the tender is being made thereby and - a guarantee that, within five business days after the expiration date, the eligible guarantor institution will deposit the letter of transmittal or facsimiles of the letter of transmittal, together with the certificate or certificates representing the old notes in proper form for transfer or an agent's message and a confirmation of book-entry transfer of the old notes into the exchange agent's account at DTC, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent and -35- 37 (3) the exchange agent receives, within five business days after the expiration date: - a properly completed and executed letter of transmittal or facsimile or an agent's message in the case of a book-entry transfer, - the certificate or certificates representing all tendered old notes in proper form for transfer or a confirmation of book-entry transfer of the old notes into the exchange agent's account at the book-entry transfer facility, and - all other documents required by the letter of transmittal. WITHDRAWAL OF TENDERS Except as otherwise provided in this document, you may withdraw your tender of old notes at any time before 5:00 p.m., New York City time, on the date the exchange offer expires. To withdraw a tender of old notes in the exchange offer, the exchange agent must receive a letter or facsimile notice of withdrawal at its address set forth below under "Exchange Agent" before 5:00 p.m., New York City time, on the expiration date. Any notice of withdrawal must: - specify the name of the person who deposited the old notes to be withdrawn, - identify the old notes to be withdrawn including the certificate number or numbers and aggregate principal amount of old notes to be withdrawn or, in the case of old notes transferred by book-entry transfer, the name and number of the account at DTC to be credited and otherwise comply with the procedures of the transfer agent, - be signed by the holder in the same manner as the original signature on the letter of transmittal by which the old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indenture governing the old notes register the transfer of the old notes into the name of the person withdrawing the tender; and - specify the name in which the old notes being withdrawn are to be registered, if different from that of the person who deposited the notes. We will determine in our sole discretion all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal. Our determination will be final and binding on all parties. Any old notes withdrawn in this manner will be deemed not to have been validly tendered for purposes of the exchange offer. We will not issue new notes unless the old notes withdrawn in this manner are validly retendered. We will return to you any old notes that you have tendered but that we have not accepted for exchange without cost as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn old notes by following one of the procedures described above under "Procedures for Tendering" at any time before the expiration date. -36- 38 CONDITIONS Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange new notes for, any old notes and we may terminate the exchange offer as provided in this document before the old notes are accepted, if: - any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or - any law, statute, rule or regulation is proposed, adopted or enacted, or the staff of the SEC interprets any existing law, statute, rule or regulation in a manner, which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or - we deem it advisable to terminate the exchange offer. The conditions listed above are for our sole benefit and we may assert these rights regardless of the circumstances giving rise to any of these conditions. We may waive these conditions in our reasonable discretion in whole or in part at any time and from time to time. If we fail at any time to exercise any of the above rights, the failure will not be deemed a waiver of those rights, and those rights will be deemed ongoing rights which may be asserted at any time and from time to time. If we determine in our reasonable discretion that we may terminate the exchange offer, we may: - refuse to accept any old notes and return all tendered old notes to the tendering holders or - extend the exchange offer and retain all old notes tendered before the exchange offer expires, subject, however, to the rights of holders to withdraw these old notes or - waive unsatisfied conditions with respect to the exchange offer and accept all properly tendered old notes that have not been withdrawn. If this waiver constitutes a material change to the exchange offer, we will disclose this change by means of a prospectus supplement that will be distributed to the registered holders of the old notes. If the exchange offer would otherwise expire, we will extend the exchange offer for 5-10 -37- 39 business days, depending on how significant the waiver is and the manner of disclosure to registered holders. EXCHANGE AGENT We have appointed The Bank of New York as the exchange agent for the exchange offer. You should direct any questions, requests for assistance and requests for additional copies of this document or of the letter of transmittal to The Bank of New York, as follows: BY MAIL, HAND OR OVERNIGHT COURIER: The Bank of New York Corporate Trust Services Window 101 Barclay Street - 21W New York, New York 10286 Attention: Santino Ginocchietti BY FACSIMILE: (212) 815-5915 CONFIRM BY TELEPHONE: (212) 815-6331 The Bank of New York is also the trustee under the indenture governing the notes. FEES AND EXPENSES We will pay the expenses of this exchange offer. We are making the principal solicitation for tenders of old notes by mail. Our officers and regular employees, however, may make additional solicitation by telegraph, facsimile, e-mail, telephone or in person. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with providing the services. We may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses incurred in forwarding copies of this document, letters of transmittal and related documents to beneficial holders of the old notes. We will pay any transfer taxes applicable to the exchange of old notes. If, however, a transfer tax is imposed for any reason other than the exchange, then the person surrendering the notes will pay the amount of any transfer taxes. If you do not submit satisfactory evidence of payment of taxes or of an exemption with the letter of transmittal, we will bill you directly for the amount of those transfer taxes. -38- 40 ACCOUNTING TREATMENT We will record the new notes at the same carrying value as the old notes as reflected in our accounting records on the date of exchange. Therefore, we will not recognize a gain or loss for accounting purposes. We will amortize the expenses of the exchange offer and the unamortized expenses related to the issuance of the old notes over the term of the notes. VOLUNTARY PARTICIPATION YOU DO NOT HAVE TO PARTICIPATE IN THE EXCHANGE OFFER. You should carefully consider whether to accept the terms and conditions of this offer. We urge you to consult your financial and tax advisors in deciding what action to take with respect to the exchange offer. See "Risk Factors--Risk Factors Relating to the Notes--If You Do Not Participate in the Exchange Offer, It May Be Harder for You to Resell and Transfer Your Old Notes" for more information about the risks of not participating in the exchange offer. CONSEQUENCES OF FAILURE TO EXCHANGE If you are eligible to participate in the exchange offer but do not tender your old notes, you will not have any further registration rights and your old notes will continue to be subject to transfer restrictions. Accordingly, you may resell your old notes that are not exchanged only: - to us, on redemption of notes or otherwise, - so long as the old notes are eligible for resale under Rule 144A under the Securities Act, to a person whom you reasonably believe is a "qualified institutional buyer" within the meaning of Rule 144A purchasing for its own account or for the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, - in accordance with Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act, - outside the U.S. to a foreign person in accordance with the requirements of Regulation S under the Securities Act, or - under an effective registration statement under the Securities Act, in each case in accordance with all other applicable securities laws. REGULATORY APPROVALS We do not have to comply with any federal or state regulatory requirements and we do not have to obtain any approvals in connection with the exchange offer. -39- 41 DESCRIPTION OF THE NEW NOTES We issued the old notes, and will issue the new notes, under the indenture, dated as of March 22, 2001, between us and The Bank of New York, as trustee. The following description of the material provisions of the indenture is only a summary. It does not set out the indenture in its entirety. WE URGE YOU TO READ THE INDENTURE BECAUSE IT, AND NOT THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A HOLDER OF THE NOTES. In this section, the term "we" refers to CSC Holdings, Inc. and not to any of the subsidiaries. The definitions of some capitalized terms used in the following summary are set forth below under "Certain Definitions". We will consider the old notes and the new notes collectively to be a single class for all purposes under the indenture, including waivers, amendments, redemptions and offers to purchase. GENERAL The new notes will mature on April 1, 2011, will be limited to $1,000,000,000 aggregate principal amount and will be our unsecured obligations. The new notes will bear interest at the rate of 7-5/8% per year from March 22, 2001 or from the most recent interest payment date to which interest has been paid. Interest is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2001, to the person in whose name the note is registered at the close of business on the March 15 and September 15, as the case may be, next preceding the interest payment date. Principal of and interest on the new notes will be payable, and the new notes will be exchangeable and transferable, at our office or agency in The City of New York, which initially will be the corporate trust office of the trustee at 101 Barclay Street, 21st Floor, New York, New York 10286. The new notes will be issued only in fully registered form without coupons, in denominations of $1,000 or any integral multiple thereof. No service charge will be made for any registration of transfer or exchange of the new notes, except for any tax or other governmental charge that may be imposed in connection therewith. The indenture does not contain any provisions that limit our ability to incur indebtedness or that give holders of the new notes protection in the event of a highly leveraged or similar transaction, other than as described below under "Certain Covenants--Limitation on Indebtedness". OPTIONAL REDEMPTION The new notes are not subject to redemption at our option prior to maturity. SINKING FUND The new notes will not be entitled to the benefits of a sinking fund. -40- 42 RANKING The old notes are, and the new notes will be, senior unsecured obligations and will rank equally in right of payment with all of our other existing and future unsubordinated indebtedness. All of our secured indebtedness will have a prior claim with respect to the assets securing this indebtedness. The liabilities, including trade payables, of our subsidiaries will have a prior claim with respect to the assets of those subsidiaries. In that regard, some of the subsidiaries in our Restricted Group have guaranteed our indebtedness under our credit agreement, but these subsidiaries will not be guarantors of the new notes. As of December 31, 2000, after giving effect to the AT&T transaction, the impact of the MGM transaction (including the repayment of the loan from Rainbow Media to us) and the monetization of our shares of Charter, Adelphia and AT&T common stock (assuming $1,384 million of net proceeds based on current stock prices), each as described in our form 10-K, as well as the sale of the old notes and the application of the estimated net proceeds thereof on March 22, 2001: - we would have had no borrowings under our credit facility, $3,690 million of senior unsecured indebtedness, $1,049 million of senior subordinated indebtedness and obligations, $54 million of capitalized leases and $1,006 million in cash, - our Restricted Subsidiaries would have had no debt or capital leases, but, in accordance with the terms of our credit agreement, would be guarantors of any borrowings thereunder, and - our Unrestricted Subsidiaries would have had $437 million of indebtedness and capitalized leases, and $1,384 million in collateralized indebtedness reflecting monetization activity. CSC Holdings has guaranteed the indebtedness of certain Restricted Subsidiaries under an existing credit facility on a senior basis. CSC Holdings has also guaranteed certain obligations of Unrestricted Subsidiaries that are parties to the monetization transactions. CERTAIN DEFINITIONS The following definitions apply to the indenture relating to the old notes and the new notes. You should read the indenture for the full definition of all these terms. "Acquired Indebtedness" means Indebtedness of a person. - existing at the time the person is merged with or into CSC Holdings or a subsidiary or becomes a subsidiary or - assumed in connection with the acquisition of assets from the person. -41- 43 "Affiliate" means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct the management and policies of the person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Annualized Operating Cash Flow" means, for any period of three complete consecutive calendar months, an amount equal to Operating Cash Flow for the period multiplied by four. "Average Life" means, at any date of determination with respect to any debt security, the quotient obtained by dividing: (a) the sum of the products of (1) the number of years from the date of determination to the dates of each successive scheduled principal payment of the debt security and (2) the amount of the principal payment by (b) the sum of all the principal payments. "Capitalized Lease Obligation" means any obligation of a person to pay rent or other amounts under a lease with respect to any property, whether real, personal or mixed, acquired or leased by the person and used in its business that is required to be accounted for as a liability on the balance sheet of the person in accordance with GAAP, and the amount of the Capitalized Lease Obligation will be the amount so required to be accounted for as a liability. "Cash Flow Ratio" means, as at any date, the ratio of: (a) the sum of the aggregate outstanding principal amount of all Indebtedness of CSC Holdings and the Restricted Subsidiaries determined on a consolidated basis but excluding all Interest Swap Obligations entered into by CSC Holdings or any Restricted Subsidiary and one of the lenders under our credit agreement outstanding on the date plus (but without duplication of Indebtedness supported by letters of credit) the aggregate undrawn face amount of all letters of credit outstanding on the date to (b) Annualized Operating Cash Flow determined as at the last day of the most recent month for which financial information is available. "Consolidated Net Tangible Assets" of any person means, as of any date: (a) all amounts that would be shown as assets on a consolidated balance sheet of the person and its Restricted Subsidiaries prepared in accordance with GAAP, less (b) the amount thereof constituting goodwill and other intangible assets as calculated in accordance with GAAP. -42- 44 "Cumulative Cash Flow Credit" means the sum of: - cumulative Operating Cash Flow during the period commencing on July 1, 1988 and ending on the last day of the most recent month preceding the date of the proposed Restricted Payment for which financial information is available or, if cumulative Operating Cash Flow for the period is negative, minus the amount by which cumulative Operating Cash Flow is less than zero, plus - the aggregate net proceeds received by CSC Holdings from the issuance or sale, other than to a Restricted Subsidiary, of its capital stock, other than Disqualified Stock, on or after January 1, 1992, plus - the aggregate net proceeds received by CSC Holdings from the issuance or sale, other than to a Restricted Subsidiary, of its capital stock, other than Disqualified Stock, on or after January 1, 1992, on the conversion of, or exchange for, indebtedness of CSC Holdings or any Restricted Subsidiary or from the exercise of any options, warrants or other rights to acquire capital stock of CSC Holdings. For purposes of this definition, the net proceeds in property other than cash received by CSC Holdings as contemplated by the second two bullet points above will be valued at the fair market value of the property, as determined by our board of directors, whose good faith determination will be conclusive, at the date of receipt by CSC Holdings. "Cumulative Interest Expense" means, for the period commencing on July 1, 1988 and ending on the last day of the most recent month preceding the proposed Restricted Payment for which financial information is available, the aggregate of the interest expense of CSC Holdings and its Restricted Subsidiaries for the period, determined on a consolidated basis in accordance with GAAP, including interest expense attributable to Capitalized Lease Obligations. "Debt" with respect to any person means, without duplication, any liability, whether or not contingent: - in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit, or reimbursement agreements with respect thereto, but excluding reimbursement obligations under any surety bond, - representing the balance deferred and unpaid of the purchase price of any property, including under Capitalized Lease Obligations, except any balance that constitutes a trade payable, - under Interest Swap Agreements, as defined in our credit agreement, entered into under our credit agreement, - under any other agreement related to the fixing of interest rates on any Indebtedness, like an interest swap, or collar agreement, if and to the extent any of the foregoing -43- 45 would appear as a liability on a balance sheet of the person prepared on a consolidated basis in accordance with GAAP, or - guarantees of items of other persons which would be included within this definition for other persons, whether or not the guarantee would appear on the balance sheet. "Debt" does not include: - Disqualified Stock, - any liability for federal, state, local or other taxes owed or owing by the person or - any accounts payable or other liability to trade creditors arising in the ordinary course of business, including guarantees thereof or instruments evidencing these liabilities. "Disqualified Stock" means, with respect to the notes, any capital stock of CSC Holdings or any Restricted Subsidiary which, by its terms, or by the terms of any security into which it is convertible or for which it is exchangeable, or on the happening of any event, matures or is mandatorily redeemable, under a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or before the maturity date of the notes. "Generally Accepted Accounting Principles"or "GAAP" means generally accepted accounting principles in the U.S., consistently applied, which were in effect as of August 21, 1997. "Indebtedness" with respect to any person means the Debt of the person, provided that, for purposes of the definition of "Indebtedness", including the term "Debt" to the extent incorporated in the definition, and for purposes of the definition of "Event of Default", the term "guarantee" will not be interpreted to extend to a guarantee under which recourse is limited to the capital stock of an entity that is not a Restricted Subsidiary. "Interest Swap Obligations" means, with respect to any person, the obligations of the person under any arrangement with any other person whereby, directly or indirectly, the person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by the person calculated by applying a fixed or a floating rate of interest on the same notional amount. "Investment" means any advance, loan, account receivable, other than an account receivable arising in the ordinary course of business, or other extension of credit (excluding, however, accrued and unpaid interest in respect of any advance, loan or other extension of credit) or any capital contribution to (by means of transfers of property to others, payments for property or services for the account or use of others, or otherwise), any purchase or ownership of any stock, bonds, notes, debentures or other securities, including, without limitation, any interests in any partnership or joint venture, of, or any bank accounts with or guarantee of any Indebtedness or other obligations of, any Unrestricted Subsidiary or Affiliate that is not a subsidiary of CSC Holdings, provided that -44- 46 - the term "Investment" will not include any transaction that would otherwise constitute an Investment of CSC Holdings or a subsidiary of CSC Holdings to the extent that the consideration provided by CSC Holdings or the subsidiary in connection therewith consists of capital stock of CSC Holdings, other than Disqualified Stock, and - the term "guarantee" will not be interpreted to extend to a guarantee under which recourse is limited to the capital stock of an entity that is not a Restricted Subsidiary. "Lien" means any lien, security interest, charge or encumbrance of any kind, including any conditional sale or other title retention agreement, any lease in the nature of a security interest and any agreement to give any security interest. A person will be deemed to own subject to a Lien any property which the person has acquired or holds subject to the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement. "Mandatorily Redeemable Preferred Stock" means CSC Holdings Series H Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable Preferred Stock and any series of preferred stock of CSC Holdings issued in exchange for, or the proceeds of which are used to repurchase, redeem, defease or otherwise acquire, all or any portion of the Series H Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable Preferred Stock or any other Mandatorily Redeemable Preferred Stock. "Operating Cash Flow" means, for any period, the sum of the following for CSC Holdings and the Restricted Subsidiaries for the period, determined on a consolidated basis in accordance with GAAP, except for the amortization of deferred installation income which will be excluded from the calculation of Operating Cash Flow for all purposes of the indenture: - aggregate operating revenues minus - aggregate operating expenses, including technical, programming, sales, selling, general and administrative expenses and salaries and other compensation, net of amounts allocated to Affiliates, paid to any general partner, director, officer or employee of CSC Holdings or any Restricted Subsidiary, but excluding interest, depreciation and amortization and the amount of non-cash compensation in respect of CSC Holdings employee incentive stock programs for the period (not to exceed in the aggregate for any calendar year 7% of the Operating Cash Flow for the previous calendar year) and, to the extent otherwise included in operating expenses, any losses resulting from a write-off or write-down of Investments by CSC Holdings or any Restricted Subsidiary in Affiliates. For purposes of determining Operating Cash Flow, all management fees will be excluded until actually paid to CSC Holdings or any Restricted Subsidiary in cash. -45- 47 "Permitted Liens" means the following types of Liens: - Liens existing on the issuance date of the old notes, - Liens on shares of the capital stock of an entity that is not a Restricted Subsidiary, which Liens solely secure a guarantee by CSC Holdings or a Restricted Subsidiary, or both, of Indebtedness of the entity, - Liens on Receivables and Related Assets, and proceeds thereof, securing only Indebtedness otherwise permitted to be incurred by a Securitization Subsidiary, - Liens on shares of the capital stock of a subsidiary of CSC Holdings securing Indebtedness under our credit agreement or any renewal of or replacement of our credit agreement, - Liens granted in favor of CSC Holdings or any Restricted Subsidiary, - Liens securing the notes, - Liens securing Acquired Indebtedness created before, and not in connection with or in contemplation of, incurrence of the Indebtedness by CSC Holdings or a Restricted Subsidiary; provided that the Lien does not extend to any property or assets of CSC Holdings or any Restricted Subsidiary other than the assets acquired in connection with the incurrence of Acquired Indebtedness, - Liens securing Interest Swap Obligations or "margin stock", as defined in Regulations G and U of the Board of Governors of the Federal Reserve System, - statutory Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other like liens arising in the ordinary course of business of CSC Holdings or any Restricted Subsidiary and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings, - Liens for taxes, assessments, government charges or claims not yet due or that are being contested in good faith by appropriate proceedings, - zoning restrictions, easements, rights-of-way, restrictions and other similar charges or encumbrances or minor defects in title not interfering in any material respect with the business of CSC Holdings or any of its Restricted Subsidiaries, - Liens arising by reason of any judgment, decree or order of any court, arbitral tribunal or similar entity so long as any appropriate legal proceedings that may have been initiated for the review of the judgment, decree or order have not been finally terminated or the period within which the proceedings may be initiated has not expired, -46- 48 - Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, employment insurance and other types of social security or similar legislation, - Liens securing the performance of bids, tenders, leases, contracts, franchises, public or statutory obligations, surety, stay or appeal bonds or other similar obligations arising in the ordinary course of business, - Leases under which CSC Holdings or any Restricted Subsidiary is the lessee or the lessor, - purchase money mortgages or other purchase money liens, including without limitation any Capital Lease Obligations, on any fixed or capital assets acquired after the issuance date of these securities, or purchase money mortgages, including without limitation Capitalized Lease Obligations, on any like assets hereafter acquired or existing at the time of acquisition of these assets, whether or not assumed, so long as (1) the mortgage or lien does not extend to or cover any other asset of CSC Holdings or any Restricted Subsidiary and (2) the mortgage or lien secures the obligation to pay the purchase price of the asset, interest thereon and other charges incurred in connection therewith, or the obligation under the Capitalized Lease Obligation, only, - Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to the letters of credit and products and proceeds thereof, - Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of CSC Holdings or any of its Restricted Subsidiaries, including rights of offset and set-off, - Liens to secure other Indebtedness; provided, however, that the principal amount of any Indebtedness secured by the Liens, together with the principal amount of any Indebtedness refinancing any Indebtedness incurred under this clause as permitted by the immediately following clause, and successive refinancings thereof, may not exceed 15% of CSC Holdings' consolidated Net Tangible Assets as of the last day of CSC Holdings most recently completed fiscal year for which financial information is available, and - any extension, renewal or replacement, in whole or in part, of any Lien described in the immediately preceding clauses; provided that any extension, renewal or replacement is no more restrictive in any material respect than the Lien so extended, renewed or replaced and does not extend to any additional property or assets. -47- 49 "Receivables and Related Assets" means: - accounts receivable, instruments, chattel paper, obligations, general intangibles, equipment and other similar assets, including interests in merchandise or goods, the sale or lease of which gives rise to the foregoing, related contractual rights, guarantees, insurance proceeds, collections and other related assets, - equipment, - inventory, and - proceeds of all of the above. "Refinancing Indebtedness" means, with respect to the notes, Indebtedness of CSC Holdings incurred to redeem, repurchase, defease or otherwise acquire or retire for value other Indebtedness that is subordinate in right of payment to the notes, so long as any new Indebtedness (1) is made subordinate to these securities at least to the same extent as the Indebtedness being refinanced and (2) does not (a) have an Average Life less than the Average Life of the Indebtedness being refinanced, (b) have a final scheduled maturity earlier than the final scheduled maturity of the Indebtedness being refinanced or (c) permit redemption at the option of the holder earlier than the earlier of (A) the final scheduled maturity of the Indebtedness being refinanced or (B) any date of redemption at the option of the holder of the Indebtedness being refinanced. "Restricted Payment" means, with respect to the notes: - any Stock Payment by CSC Holdings or a Restricted Subsidiary, - any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value, or permit any Restricted Subsidiary to redeem, purchase, defease or otherwise acquire or retire for value, before any scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of CSC Holdings that is subordinate in right of payment to the notes; provided, however, that, with respect to the notes, any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value, or permit any Restricted Subsidiary to redeem, repurchase, defease or otherwise acquire or retire for value, before any scheduled -48- 50 maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness that is subordinate in right of payment to these securities will not be a Restricted Payment if either: (1) after giving effect thereto, the ratio of the Senior Indebtedness of CSC Holdings and the Restricted Subsidiaries to Annualized Operating Cash Flow determined as of the last day of the most recent month for which financial information is available is less than or equal to 5 to 1 or (2) the subordinate indebtedness is redeemed, purchased, defeased or otherwise acquired or retired in exchange for, or out of, (a) the proceeds of a sale, within one year before or 180 days after the redemption, purchase, defeasance, acquisition or retirement, of Refinancing Indebtedness or capital stock of CSC Holdings or warrants, rights or options to acquire capital stock of CSC Holdings or (b) any source of funds other than the incurrence of Indebtedness, or - any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value any Qualified Stock at its mandatory redemption date or other maturity date if and to the extent that Indebtedness is incurred to finance the redemption, purchase, defeasance or other acquisition or retirement; provided, however, that the redemption, purchase, defeasance or other acquisition or retirement of Mandatorily Redeemable Preferred Stock at its mandatory redemption or other maturity date will not be a Restricted Payment if and to the extent any Indebtedness incurred to finance all or a portion of the purchase redemption price does not have a final scheduled maturity date, or permit redemption at the option of the holder thereof, earlier than the original scheduled maturity of the notes. Notwithstanding the foregoing, Restricted Payments will not include: - payments by any Restricted Subsidiary to CSC Holdings or any other Restricted Subsidiary or - any Investment or designation of a Restricted Subsidiary as an Unrestricted Subsidiary permitted under the "Limitation on Investments in Unrestricted Subsidiaries and Affiliates" covenant. "Restricted Subsidiary" means any subsidiary of CSC Holdings, whether existing on the date of the indenture or created subsequent thereto, designated from time to time by CSC Holdings as a "Restricted Subsidiary"; provided, however, that no subsidiary that is not a Securitization Subsidiary can be or remain so designated unless (1) at least 67% of each of the total equity interest and the voting control of the subsidiary is owned, directly or indirectly, by CSC Holdings or another Restricted Subsidiary and (2) the subsidiary is not restricted, under the terms of any loan agreement, note, indenture or other evidence of indebtedness, from -49- 51 - paying dividends or making any distribution on the subsidiary's capital stock or other equity securities or paying any Indebtedness owed to CSC Holdings or to any Restricted Subsidiary, - making any loans or advances to CSC Holdings or any Restricted Subsidiary or - transferring any of its properties or assets to CSC Holdings or any Restricted Subsidiary It being understood that a financial covenant any of the components of which are directly impacted by the taking of the action, e.g. the payment of a dividend, itself, like a minimum net worth test, would be deemed to be a restriction on the foregoing actions, while a financial covenant none of the components of which is directly impacted by the taking of the action, e.g., the payment of a dividend, itself, like a debt to cash flow test, would not be deemed to be a restriction on the foregoing actions and provided further that CSC Holdings may, from time to time, redesignate any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the provisions of the "Limitation on Investments in Unrestricted Subsidiaries and Affiliates" covenant. "Securitization Subsidiary" means a Restricted Subsidiary that is established for the limited purpose of acquiring and financing Receivables and Related Assets and engaging in activities ancillary thereto; provided that: - no portion of the Indebtedness of a Securitization Subsidiary is guaranteed by or is recourse to CSC Holdings or any other Restricted Subsidiary, other than recourse for customary representations, warranties, covenants and indemnities, none of which relates to the collectibility of the Receivables and Related Assets, and - none of CSC Holdings or any other Restricted Subsidiary has any obligation to maintain or preserve the Securitization Subsidiary's financial condition. "Senior Indebtedness" means, with respect to the notes and any person, all principal of, premium, if any, and interest, including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the person whether or not a claim for post filing interest is allowed in the proceedings, with respect to all Indebtedness of the person; provided that Senior Indebtedness will not include: - any Indebtedness of the person that, by its terms or the terms of the instrument creating or evidencing the indebtedness, is expressly subordinate in right of payment to the notes, - any guarantee of Indebtedness of any subsidiary of the person if recourse against the guarantee is limited to the capital stock or other equity interests of the subsidiary, - any obligation of the person to any subsidiary of the person or, in the case of a Restricted Subsidiary, to CSC Holdings or any other subsidiary of CSC Holdings, or -50- 52 - any Indebtedness of the person, and any accrued and unpaid interest in respect thereof, which is subordinate or junior in any respect to any other Indebtedness or other obligation of the person. "Stock Payment" means, with respect to any person, the payment or declaration of any dividend, either in cash or in property, except dividends payable in common stock or common shares of capital stock of the person, or the making by the person of any other distribution, on account of any shares of any class of its capital stock, now or hereafter outstanding, or the redemption, purchase, retirement or other acquisition or retirement for value by the person, directly or indirectly, of any shares of any class of its capital stock, now or hereafter outstanding, other than the redemptions, purchase, defeasance or other acquisition or retirement for value of any Disqualified Stock at its mandatory redemption date or other maturity date. "Unrestricted Subsidiary" means any subsidiary of CSC Holdings which is not a Restricted Subsidiary. CERTAIN COVENANTS The indenture contains, among others, the following covenants: Limitation on Indebtedness. The indenture provides that CSC Holdings will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur, create, issue, assume, guarantee or otherwise become liable for, contingently or otherwise, or become responsible for the payment of, contingently or otherwise, any Indebtedness, other than Indebtedness between or among any of CSC Holdings and its Restricted Subsidiaries, unless, after giving effect thereto, the Cash Flow Ratio is less than or equal to 9 to 1. At December 31, 2000, the Cash Flow Ratio was 6.5 to 1. Limitation on Restricted Payments. The indenture provides that CSC Holdings will not, and will not permit any Restricted Subsidiary to, make any Restricted Payment if (1) at the time of the proposed Restricted Payment, a Default or Event of Default has occurred and is continuing or will occur as a consequence of the Restricted Payment or (2) immediately after giving effect to the Restricted Payment, the aggregate of all Restricted Payments that have been made on or after July 1, 1988 would exceed the sum of: (a) $25,000,000, plus (b) an amount equal to the difference between (i) the Cumulative Cash Flow Credit and (ii) 1.2 multiplied by Cumulative Interest Expense. For purposes of this "Limitation on Restricted Payments" covenant, the amount of any Restricted Payment, if other than cash, will be based on fair market value as determined by our board of directors, whose good faith determination will be conclusive. -51- 53 The provisions above do not prevent: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration the payment complied with the above provisions, and (2) the retirement, redemption, purchase, defeasance or other acquisition of any shares of CSC Holdings' capital stock or warrants, rights or options to acquire capital stock of CSC Holdings, in exchange for, or out of the proceeds of a sale, within one year before or 180 days after the retirement, redemption, purchase, defeasance or other acquisition, of, other shares of CSC Holdings capital stock or warrants, rights or options to acquire capital stock of CSC Holdings. For purposes of determining the aggregate permissible amount of Restricted Payments in accordance with clause (2) of the first paragraph of this covenant, all amounts expended under clause (1) of this paragraph will be included and all amounts expended or received under clause (2) of this paragraph will be excluded; provided, however, that amounts paid under clause (1) of this paragraph will be included only to the extent that the amounts were not previously included in calculating Restricted Payments. For the purposes of the provisions above, the net proceeds from the issuance of shares of CSC Holdings capital stock on conversion of Indebtedness will be deemed to be an amount equal to the accreted value of the Indebtedness on the date of the conversion and the additional consideration, if any, CSC Holdings receives on the conversion, minus any cash payment on account of fractional shares, the consideration, if in property other than cash, to be determined by our board of directors, whose good faith determination will be conclusive. If CSC Holdings makes a Restricted Payment which, at the time of the making of the Restricted Payment, would be in CSC Holdings good faith determination permitted under the requirements of this covenant, the Restricted Payment will be deemed to have been made in compliance with this covenant notwithstanding any subsequent adjustments made in good faith to CSC Holdings financial statements affecting Cumulative Cash Flow Credit or Cumulative Interest Expense for any period. As of December 31, 2000, we are permitted to make Restricted Payments of approximately $5,255 billion. Limitation on Investments in Unrestricted Subsidiaries and Affiliates. The indenture provides that CSC Holdings will not, and will not permit any Restricted Subsidiary to, directly or indirectly, (1) make any Investment or (2) allow any Restricted Subsidiary to become an Unrestricted Subsidiary, in each case unless (a) no Default or Event of Default has occurred and is continuing or will occur as a consequence of the Investment or the redesignation of a Restricted Subsidiary and (b) after giving effect thereto, the Cash Flow Ratio is less than or equal to 9 to 1. The preceding provisions of this covenant will not prohibit any renewal or reclassification of any Investment existing on the date hereof or trade credit extended on usual and customary terms in the ordinary course of business. -52- 54 Transactions with Affiliates. The indenture provides that CSC Holdings will not, and will not permit any of its subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, an affiliate of CSC Holdings that is not a subsidiary of CSC Holdings, having a value, or for consideration having a value, in excess of $10,000,000 individually or in the aggregate unless our board of directors makes a good faith determination that the terms of the transaction are, taken as a whole, no less favorable to CSC Holdings or the subsidiary, as the case may be, than those which might be available in a comparable transaction with an unrelated person. For purposes of clarification, this provision will not apply to Restricted Payments permitted under " Limitation on Restricted Payments". Limitation on Liens. The indenture provides that CSC Holdings will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind, except for Permitted Liens, on or with respect to any of its property or assets, whether owned at the date of the indenture or thereafter acquired, or any income, profits or proceeds therefrom, or assign or otherwise convey any right to receive income thereon, unless: - in the case of any Lien securing Indebtedness that is subordinated in right of payment to the notes, the notes are secured by a Lien on the property, assets or proceeds that is senior in priority to the Lien; and - in the case of any other Lien, the notes are equally and ratably secured. CONSOLIDATION, MERGER AND SALE OF ASSETS CSC Holdings may not consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, any person, unless: - the person formed by or surviving any consolidation or merger, if other than CSC Holdings, or to which the sale, assignment, transfer, lease, conveyance or disposition is made is a corporation organized and existing under the laws of the U.S., any state thereof or the District of Columbia, and assumes by a supplemental indenture all of the obligations of CSC Holdings under the notes and the indenture, - immediately before and immediately after the transaction, and after giving effect thereto, no Default or Event of Default has occurred and is continuing, and - immediately after the transaction, and after giving effect thereto, the person formed by or surviving any consolidation or merger, or to which the sale, assignment, transfer, lease or conveyance or disposition is made, has a Cash Flow Ratio not in excess of 9 to 1. -53- 55 EVENTS OF DEFAULT The following are Events of Default under the indenture: (1) default for 30 days in payment of interest on the notes, (2) default in payment of principal of the notes at maturity, on acceleration or otherwise, (3) failure to comply with any other covenant or agreement of CSC Holdings, continued for 60 days, or, with respect to some covenants or agreements, 30 days, after written notice as provided in the indenture, (4) default or defaults under any mortgage, indenture or instrument that secures or evidences any Indebtedness for money borrowed or guaranteed by CSC Holdings or a Restricted Subsidiary in an aggregate amount of $10,000,000 or more, but excluding any Indebtedness for the deferred purchase price of property or services owed to the person providing the property or services as to which CSC Holdings or the Restricted Subsidiary is contesting its obligation to pay in good faith and by proper proceedings and for which CSC Holdings or the Restricted Subsidiary has established appropriate reserves, which result from the failure to pay the Indebtedness at final maturity or which has resulted in the acceleration of the Indebtedness, (5) the entry of a final judgment or final judgments for the payment of money by a court or courts of competent jurisdiction against CSC Holdings or any Restricted Subsidiary in an aggregate amount exceeding $10,000,000, which remain undischarged and unbonded for a period, during which execution has not been effectively stayed, of 60 days or as to which an enforcement proceeding has been commenced by any creditor, and (6) some events of bankruptcy, insolvency or reorganization. If an Event of Default, other than as specified in (6) above, occurs and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding notes issued under the indenture, by written notice to CSC Holdings, and to the Trustee if the notice is given by the holders, may declare all the unpaid principal of and interest on the notes to be due and payable as provided in the indenture. On a declaration of acceleration, the principal and accrued interest will be due and payable ten days after receipt by CSC Holdings of the written notice. No action on the part of the trustee or any holder of the notes is required for the acceleration if an Event of Default specified in (6) above has occurred and is continuing. The holders of at least a majority -54- 56 in principal amount of the notes issued under the indenture may rescind an acceleration and its consequences if - all existing Events of Default, other than the nonpayment of principal of or interest on the notes which have become due solely because of the acceleration, have been cured or waived and - the rescission would not conflict with any judgment or decree of a court of competent jurisdiction. A declaration of acceleration because of an Event of Default specified in clause (4) of the preceding paragraph would be automatically annulled if the Indebtedness referred to therein were discharged, or the holders thereof rescinded their declaration of acceleration referred to therein, within 30 days after the acceleration of the notes and no other Event of Default had occurred and not been cured or waived during the period. The holders of a majority in principal amount of the notes issued under the indenture also have the right to waive some past defaults under the indenture. No holder of any note issued under the indenture has any right to institute any proceeding with respect to the notes, the indenture or for any remedy thereunder, unless - the holder has previously given to the trustee written notice of a continuing Event of Default under the indenture, - the holders of at least 25% in principal amount of the outstanding notes issued under the indenture have made written request and offered reasonable indemnity to the trustee to institute the proceeding as the trustee under the indenture; and - the trustee has not received from the holders of a majority in principal amount of the outstanding notes issued under the indenture a direction inconsistent with the request and the trustee has failed to institute the proceeding within 60 days after receipt of the notice. These limitations do not apply, however, to a suit instituted by a holder of a note for the enforcement of payment of the principal of or interest on the note on or after the respective due dates expressed in the note. During the existence of an Event of Default, the trustee is required to exercise the rights and powers vested in it under the indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise under the circumstances in the conduct of the person's own affairs. Subject to the provisions of the indenture relating to the duties of the trustee, in case an Event of Default has occurred and is continuing, the trustee is not under any obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders unless the holders have offered to the trustee reasonable security or indemnity. -55- 57 Subject to the provisions for the indemnification of the trustee, the holders of a majority in principal amount of the notes issued under the indenture have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee under the indenture. CSC Holdings is required to furnish to the trustee an annual statement as to the performance by CSC Holdings of its obligations under the indenture and as to any default in the performance. DEFEASANCE CSC Holdings at any time may terminate all of its obligations with respect to the notes ("defeasance"), except for some obligations, including those regarding the Defeasance Trust, as defined below, and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain agencies in respect of the notes. CSC Holdings may also at any time terminate its obligations under the covenants set forth in the indenture, which are described under "Certain Covenants" above, and any omission to comply with the obligations will not constitute a Default or an Event of Default with respect to the notes ("covenant defeasance"). In order to exercise either defeasance or covenant defeasance, - CSC Holdings must irrevocably deposit in trust, for the benefit of the holders, with the trustee money or U.S. government obligations, or a combination thereof, in amounts as will be sufficient to pay the principal of and premium, if any, and interest on the notes being defeased to redemption or maturity (the "Defeasance Trust"), - CSC Holdings must deliver opinions of counsel to the effect that the holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance had not occurred, in the case of defeasance, the opinion must refer to and be based on a ruling of the Internal Revenue Service or a change in applicable federal income tax laws, and - CSC Holdings must comply with some other conditions. SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE NOTES The indenture will cease to be of further effect, except as to surviving rights of registration of transfer or exchange of securities, as expressly provided for in the indenture, as to all outstanding notes when either - all notes theretofore authenticated and delivered, except lost, stolen or destroyed notes which have been replaced or paid, have been delivered to the trustee for cancellation and CSC Holdings has paid all sums payable by it under the indenture or -56- 58 - all notes not theretofore delivered to the trustee for cancellation (a) have become due and payable, or (b) will become due and payable within one year, and CSC Holdings has irrevocably deposited or caused to be deposited with the trustee funds in an amount sufficient to pay the entire indebtedness on the notes not theretofore delivered to the trustee for cancellation, for principal and interest to the date of deposit, if the notes are then due and payable, or to the maturity date, and CSC Holdings has paid all other sums payable by it under the indenture. MODIFICATION AND WAIVER Modifications and amendments of the indenture or the notes issued thereunder may be made by CSC Holdings and the trustee with the consent of the holders of not less than a majority in aggregate principal amount of the notes issued thereunder; provided, however, that no modification or amendment may, without the consent of the holder of each outstanding note issued thereunder, - change the stated maturity of the principal of, or any installment of interest on, any notes issued thereunder, - reduce the principal amount of or interest on the notes issued thereunder, - change the coin or currency in which any note or the interest on any note is payable, - impair the right to institute suit for the enforcement of any payment on or with respect to the notes issued thereunder after the stated maturity, - reduce the percentage in principal amount of outstanding notes and registered notes necessary to waive compliance with some provisions of the indenture or to waive some defaults, or - modify any of the provisions relating to supplemental indentures requiring the consent of holders or relating to the waiver of past defaults, except to increase the percentage of outstanding securities required for the actions or to provide that some other provisions of the indenture cannot be modified or waived without the consent of the holder of each note affected by the provisions. The holders of a majority in aggregate principal amount of the notes issued under the indenture may waive compliance with some restrictive covenants and provisions of the indenture. -57- 59 REGARDING THE TRUSTEE The Bank of New York is the trustee under the indenture and the indentures relating to our existing senior indebtedness and senior subordinated indebtedness. The Bank of New York is a party to some credit agreements with us and our subsidiaries, including our credit agreement. The Bank of New York may also maintain other banking arrangements with us in the ordinary course of business. BOOK-ENTRY DELIVERY AND FORM The certificates representing the new notes will be issued in fully registered form, without coupons. The new notes will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"), and registered in the name of Cede & Co., as DTC's nominee, in the form of a global certificate. MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS The exchange of old notes for new notes will not be treated as a taxable transaction for U.S. Federal income tax purposes because the terms of the new notes will not be considered to differ materially in kind or in extent from the terms of the old notes. Rather, the new notes you receive will be treated as a continuation of your investment in the old notes. As a result, you will not have any material U.S. Federal income tax consequences if you exchange your old notes for new notes. IF YOU ARE THINKING ABOUT EXCHANGING YOUR OLD NOTES FOR NEW NOTES, YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES ARISING UNDER STATE, LOCAL OR FOREIGN LAWS OF THE EXCHANGE. PLAN OF DISTRIBUTION If you want to participate in the exchange offer you must represent, among other things, that: - you are acquiring the new notes issued in the exchange offer in the ordinary course of your business, - you are not an "affiliate", as defined in Rule 405 under the Securities Act, of CSC Holdings; and - you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in a distribution of the new notes issued in the exchange offer. If you are unable to make the above representations you are a "restricted holder". A restricted holder will not be able to participate in the exchange offer and may only sell its old notes under a registration statement containing the selling securityholder information required by Item 507 of -58- 60 Regulation S-K of the Securities Act, or under an exemption from the registration requirement of the Securities Act. If you are a broker-dealer who holds old notes that were acquired for your own account as a result of market-marking activities or other trading activities, you may exchange old notes by the exchange offer. As a broker-dealer, you may be deemed to be an "underwriter" within the meaning of the Securities Act, and, consequently, must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes you receive in the exchange offer. Each participating broker-dealer is required to acknowledge in the letter of transmittal that it acquired the old notes as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with the resale of the new notes. We have agreed that, for a period of up to 90 days after the last exchange date, we will use our best efforts to - keep the exchange offer registration statement continuously effective, supplemented and amended as required by the registration rights agreement to the extent necessary to ensure that it is available for resale of old notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities, - ensure that the exchange offer registration statement conforms with the requirements of the registration rights agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from time to time; and - make this prospectus available to participating broker-dealers for use in connection with any resale. During this period of time, delivery of this prospectus, as it may be amended or supplemented, will satisfy the prospectus delivery requirements of a participating broker-dealer engaged in market making or other trading activities. Based on interpretations by the staff of the SEC, we believe that new notes issued by the exchange offer may be offered for resale, resold and otherwise transferred by their holder, other than a participating broker-dealer, without compliance with the registration and prospectus delivery requirements of the Securities Act. We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by participating broker-dealers for their own account under the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, - in negotiated transactions, - through the writing of options on the new notes or - a combination of methods of resale. -59- 61 The new notes may be sold from time to time: - at market prices prevailing at the time of resale, - at prices related to prevailing market prices or - at negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any participating broker-dealer and/or the purchasers of any new notes. Any participating broker-dealer that resells new notes received by it for its own account under the exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the meaning of the Securities Act. Any profit on any resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed to pay all expenses incidental to the exchange offer other than commissions and concessions of any brokers or dealers and will indemnify holders of the notes, including any broker-dealers, against some liabilities, including liabilities under the Securities Act, as set forth in the registration rights agreement. VALIDITY OF THE NEW NOTES The validity of the new notes will be passed on for us by Sullivan & Cromwell, New York, New York. EXPERTS The consolidated financial statements and schedule of CSC Holdings and subsidiaries as of December 31, 2000 and 1999, and for each of the years in the three-year period ended December 31, 2000 that are incorporated in this registration statement by reference from the December 31, 2000 combined Annual Report on Form 10-K of CSC Holdings, Inc. and Cablevision Systems Corporation have been incorporated herein in reliance on the report of KPMG LLP, independent certified public accountants, and upon the authority of said firm as experts in accounting and auditing. AVAILABLE INFORMATION We are subject to the information requirements of the Securities Exchange Act of 1934 and in accordance therewith file reports and other information with the SEC. The reports and other information that we file with the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., -60- 62 Washington, D.C 20549, and at the following regional offices: Seven World Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and copies of this material can be obtained from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Further information on the operation of the SEC's Public Reference Room in Washington D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site that contains reports, proxy statements and other information about issuers, like CSC Holdings, who file electronically with the SEC. The address of that site is http://www.sec.gov. These reports and other information also may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. WHERE YOU CAN FIND MORE INFORMATION We hereby incorporate by reference into this document the following documents or information filed with the SEC:
CSC HOLDINGS COMMISSION FILINGS ------------------------------- (FILE NO. [001-09046]) PERIOD COVERED OR DATE FILED ---------------------------- Annual Report on Form 10-K Fiscal year ended December 31, 2000 (our "Form 10-K")
We also incorporate by reference into this document all documents we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or after the date of this offering made hereby. We are delivering a copy of our Form 10-K, without exhibits thereto, with this document. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference in this document will be deemed to be modified or superseded for the purpose of this document to the extent that a subsequent statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this document. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. NEITHER THE MAKING OF THE EXCHANGE OFFER PURSUANT TO THIS DOCUMENT NOR THE ACCEPTANCE OF OLD NOTES FOR TENDER OR EXCHANGE PURSUANT THERETO SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CSC HOLDINGS, INC. SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. -61- 63 EACH BROKER-DEALER WHO HOLDS OLD NOTES ACQUIRED FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND WHO RECEIVES NEW NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD NOTES PURSUANT TO THE EXCHANGE OFFER MUST DELIVER A COPY OF THIS PROSPECTUS IN CONNECTION WITH ANY RESALE OF NEW NOTES. -62- 64 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Bethpage, the State of New York, on this 26th day of April, 2001. CSC Holdings, Inc. By: /s/ William J. Bell ----------------------------------- Name: William J. Bell Title: Vice Chairman POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William J. Bell and Robert S. Lemle, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and file the same, with all exhibits thereto and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on April 26, 2001,
SIGNATURE TITLE - --------- ----- /s/ James L. Dolan - ----------------------------------------- James L. Dolan Chief Executive Officer and Director (Principal Executive Officer) /s/ William J. Bell - ----------------------------------------- William J. Bell Vice Chairman and Director (Principal Financial Officer) /s/ Andrew B. Rosengard - ----------------------------------------- Andrew B. Rosengard Executive Vice President, Finance and Controller (Principal Accounting Officer)
I-1 65
SIGNATURE Title - --------- ----- /s/ Charles F. Dolan - ----------------------------------------- Charles F. Dolan Chairman of the Board of Directors /s/ Robert S. Lemle - ----------------------------------------- Robert S. Lemle Vice Chairman, General Counsel, Secretary and Director /s/ Sheila A. Mahony - ----------------------------------------- Sheila A. Mahony Executive Vice President and Director /s/ Thomas C. Dolan - ----------------------------- Senior Vice President, Thomas C. Dolan Chief Information Officer and Director /s/ John Tatta - ----------------------------------------- John Tatta Director and Chairman of the Executive Committee /s/ Patrick F. Dolan - ----------------------------------------- Patrick F. Dolan Director /s/ Charles D. Ferris - ----------------------------------------- Charles D. Ferris Director /s/ Richard H. Hochman - ----------------------------------------- Richard H. Hochman Director /s/ Victor Oristano - ----------------------------------------- Victor Oristano Director /s/ Vincent Tese - ----------------------------------------- Vincent Tese Director /s/ Michael P. Huseby - ----------------------------------------- Michael P. Huseby Director
I-2 66
SIGNATURE Title - --------- ----- /s/ Daniel E. Somers - ----------------------------------------- Daniel E. Somers Director
I-3 67 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation a "derivative action"), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise. The first paragraph of Article Ninth of CSC Holdings's Amended and Restated Certificate of Incorporation provides: The corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, or by any successor thereto, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section. Such right to indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The indemnification provided for herein shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise. Article VIII of the By-Laws of CSC Holdings provides: A. The corporation shall indemnify each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to II-1 68 employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or alleged action in any other capacity while serving as a director, officer, employee or agent, to the maximum extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide before such amendment), against all expense, liability and loss (including attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection with such proceeding. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition, provided that, if the Delaware General Corporation Law so requires, the payment of such expenses incurred by a director or officer in advance of the final disposition of a proceeding shall be made only on receipt by the corporation of an undertaking by or on behalf of such person to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this Article or otherwise. B. The right to indemnification and advancement of expenses conferred on any person by this Article shall not limit the corporation from providing any other indemnification permitted by law nor shall it be deemed exclusive of any other right which any such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. C. The corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. CSC Holdings has entered into indemnification agreements with some of its officers and directors indemnifying such officers and directors from and against some expenses, liabilities or other matters referred to in or covered by Section 145 of the Delaware General Corporation Law. CSC Holdings has also entered into an agreement with Charles F. Dolan ("Mr. Dolan"), the Chairman of CSC Holdings, pursuant to which Mr. Dolan has agreed to guarantee CSC Holdings's obligation to indemnify its officers and directors to the fullest extent permitted by Delaware law. In addition, subject to some limitations, Mr. Dolan has agreed to indemnify such officers and directors against any loss or expense such person may incur in connection with any transaction involving Mr. Dolan or entities affiliated with Mr. Dolan to the extent indemnification is not provided by CSC Holdings. Any payment required to be made by Mr. Dolan pursuant to such agreement will be reduced by any proceeds of insurance or reimbursement under any other form of indemnification II-2 69 reimbursement available to such officer or director. CSC Holdings maintains directors' and officers' liability insurance. Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) for payments of unlawful dividends or unlawful stock repurchases or redemptions, or (4) for any transaction from which the director derived an improper personal benefit. The second paragraph of Article Ninth of CSC Holdings' Certificate of Incorporation provides for such limitation of liability. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS EXHIBITS
DESCRIPTION ----------- 1.1 Purchase Agreement, dated March 15, 2001, between the Registrant and Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.* 3.1 Certificate of Incorporation and two Certificates of Amendment of the Certificate of Incorporation of Registrant (incorporated herein by reference to Exhibits 3.3, 3.5 and 3.6 to the Registrant's Annual Report on Form 10-K). 3.2 Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.4 to the Registrant's Annual Report on Form 10-K). 4.1 Registration Rights Agreement, dated March 22, 2001, between the Registrant and Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.* 4.2 Indenture dated as of March 22, 2001, between the Company and The Bank of New York, as trustee.*
II-3 70 4.3 Form of New Note (included in Exhibit 4.2).* 5.1 Opinion of Sullivan & Cromwell regarding the validity of the 7 5/8% Senior Notes being registered.* 8.1 Opinion of Sullivan & Cromwell regarding tax matters.* 12.1 Computation of Earnings to Fixed Charges.** 23.1 Consent of KPMG LLP.* 23.2 Consent of Sullivan & Cromwell (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 hereto).* 24.1 Power of Attorney (included in the signature page attached hereto).* 25.1 Statement of Eligibility of the Trustee.* 99.1 Form of Letter of Transmittal.* 99.2 Form of Notice of Guaranteed Delivery.* 99.3 Form of Exchange Agent Agreement.*
- ------------------------------------- * Filed herewith. ** To be filed by amendment. (b) FINANCIAL STATEMENT SCHEDULES All other schedules for which provisions are made in the applicable accounting regulation of the Securities and Exchange Commission are not required or are inapplicable and therefore have been omitted, or the required information has been incorporated by reference herein or disclosed in the financial statements which form a part of this Proxy Statement/Prospectus. ITEM 22. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be II-4 71 deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (3) That every prospectus: (i) that is filed pursuant to paragraph (2) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (4) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, pursuant to the provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by any such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not such indemnification is against public policy as expressed II-5 72 in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (6) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. II-6 73 INDEX TO EXHIBITS Certain of the following documents are filed herewith. Certain other of the following documents have been previously filed with the Securities and Exchange Commission and, pursuant to Rule 12b-32, are incorporated herein by reference. EXHIBITS
DESCRIPTION ----------- 1.1 Purchase Agreement, dated March 15, 2001, between the Registrant and Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.* 3.1 Certificate of Incorporation and two Certificates of Amendment of the Certificate of Incorporation of Registrant (incorporated herein by reference to Exhibits 3.3, 3.5 and 3.6 to the Registrant's Annual Report on Form 10-K). 3.2 Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.4 to the Registrant's Annual Report on Form 10-K). 4.1 Registration Rights Agreement, dated March 22, 2001, between the Registrant and Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.* 4.2 Indenture dated as of March 22, 2001, between the Company and The Bank of New York, as trustee.* 4.3 Form of New Note (included in Exhibit 4.2).* 5.1 Opinion of Sullivan & Cromwell regarding the validity of the 7 5/8% Senior Notes being registered.* 8.1 Opinion of Sullivan & Cromwell regarding tax matters.* 12.1 Computation of Earnings to Fixed Charges.**
II-7 74 23.1 Consent of KPMG LLP.* 23.2 Consent of Sullivan & Cromwell (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 hereto).* 24.1 Power of Attorney (included in the signature page attached hereto).* 25.1 Statement of Eligibility of the Trustee.* 99.1 Form of Letter of Transmittal.* 99.2 Form of Notice of Guaranteed Delivery.* 99.3 Form of Exchange Agent Agreement.*
- ------------------------------------- * Filed herewith. ** To be filed by amendment. II-8 EX-1.1 2 y48336ex1-1.txt PURCHASE AGREEMENT 1 Exhibit 1.1 EXECUTION COPY CSC HOLDINGS, INC. (a Delaware corporation) 7 5/8 % Senior Notes due 2011 PURCHASE AGREEMENT Dated: March 15, 2001 2 CSC HOLDINGS, INC. (a Delaware corporation) $1,000,000,000 7 5/8 % Senior Notes due 2011 PURCHASE AGREEMENT March 15, 2001 To the Initial Purchasers Named in Schedule I Ladies and Gentlemen: CSC Holdings, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to you (the "Initial Purchasers") $1,000,000,000 aggregate principal amount of its 7 5/8% Senior Notes due 2011 (the "Securities"). The Securities are to be sold to each Initial Purchaser, acting severally and not jointly, in the respective principal amounts as are set forth in Schedule I opposite the name of the Initial Purchaser. The Securities are to be issued pursuant to an indenture to be dated as of March 22, 2001 (the "Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee"). The Securities and the Indenture are more fully described in the Offering Memorandum referred to below. Capitalized terms used herein without definition have the respective meanings specified in the Offering Memorandum. The Securities will be offered and sold to you without each being registered under the Securities Act of 1933, as amended (the "1933 Act"), in reliance on an exemption therefrom. The Company has prepared an offering memorandum, dated March 15, 2001 (such offering memorandum, together with the documents incorporated by reference therein in the form first furnished to the Initial Purchasers for use in connection with the offering of the Securities, being hereinafter referred to as the "Offering Memorandum"), setting forth information regarding the Company and the Securities. The Company hereby confirms that it has authorized the use of the Offering Memorandum in connection with the offering and resale of the Securities. The Company understands that you propose to make an offering of the Securities on the terms set forth in the Offering Memorandum, as soon as you deem advisable after this Agreement has been executed and delivered, (i) to persons in the United States whom you reasonably believe to be qualified institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A under the 1933 Act, as such rule may be amended from time to time ("Rule 144A"), in a transaction under Rule 144A and/or (ii) to non-U.S. persons outside the United States to whom offers and sales of the Securities may be made in reliance upon Regulation S under the 1933 Act, provided that such offers and sales are made in the manner contemplated by Section 2(d) hereof. The holders of the Securities will be entitled to the benefits of a registration rights agreement to be dated as of March 22, 2001 (the "Registration Rights Agreement") between you and the Company, substantially in the form attached hereto as Exhibit A. 2 3 Section 1. Representations and Warranties. (a) The Company represents and warrants to you and agrees that: (i) As of the date of the Offering Memorandum, and at all times subsequent thereto up to the Closing Time referred to below, neither the Offering Memorandum nor any amendment or supplement thereto will include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that this representation and warranty does not apply to statements or omissions made in reliance upon and in conformity with information furnished in writing by you to the Company expressly for use in the Offering Memorandum or any amendment or supplement thereto. (ii) The documents incorporated by reference in the Offering Memorandum, at the time they were filed with the Securities and Exchange Commission (the "Commission"), complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"). (iii) When the Securities are issued and delivered pursuant to this Agreement, such Securities will not be of the same class (within the meaning of Rule 144A) as securities of the Company which are listed on a national securities exchange registered under Section 6 of the 1934 Act or quoted in a U.S. automated inter-dealer quotation system. (iv) The Company is subject to Section 13 or 15(d) of the 1934 Act. (v) Neither the Company nor any affiliate (as defined in Rule 501(b) under the 1933 Act) of the Company has, directly or through any agent, sold, offered for sale, solicited offers to buy, or otherwise negotiated in respect of, any security (as defined in the 1933 Act) which is or will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the 1933 Act. (vi) None of the Company, any of its affiliates or any person acting on its or their behalf (other than you, as to whom the Company makes no representation) has engaged, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the 1933 Act. With respect to those Securities sold in reliance on Regulation S, (A) none of the Company, its affiliates or any person acting on its or their behalf (other than you, as to whom the Company makes no representation) has engaged in any directed selling efforts within the meaning of Regulation S and (B) each of the Company, its affiliates and each person acting on its or their behalf (other that you, as whom the Company makes no representation) has complied with the offering restrictions requirement of Regulation S. (vii) KPMG LLP, who are reporting upon the audited financial statements and schedules included or incorporated by reference in the Offering Memorandum, are independent accountants within the meaning of Rule 101 of the American Institute of Certified Public Accountants. 3 4 (viii) The consolidated historical financial statements included or incorporated by reference in the Offering Memorandum present fairly the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the consolidated results of operations and changes in financial position of the Company and its subsidiaries for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The selected financial data included in the Offering Memorandum present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included or incorporated by reference in the Offering Memorandum. (ix) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with power and authority (corporate and other) under such laws to own, lease and operate its properties and conduct its business as described in the Offering Memorandum; and the Company is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (x) The subsidiaries of the Company set forth on Schedule III are, as of the date hereof, all of the "Restricted Subsidiaries", as such term is defined in the Indenture and the Bank Credit Agreement (as such term is defined in the Indenture). The subsidiaries of the Company set forth on Schedule IV are "Unrestricted Subsidiaries", as such term is defined in the Indenture (the Restricted Subsidiaries and the Unrestricted Subsidiaries are hereinafter referred to collectively as the "Subsidiaries"). The Subsidiaries on Schedules III and IV with an asterisk by their names are the only subsidiaries of the Company which had at December 31, 2000 assets in excess of 10% of the consolidated assets of the Company and its subsidiaries as at that date or had, in the aggregate, for the fiscal year then ended revenues or operating cash flow in excess of 10% of consolidated revenues or consolidated operating cash flow of the Company and its subsidiaries for such period (such Subsidiaries are referred to herein as the "Material Subsidiaries"). In making this determination, any subsidiary acquired after December 31, 2000 shall be deemed to have been acquired as of such date. (xi) Each Material Subsidiary that is a corporation is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation with power and authority (corporate and other) under such laws to own, lease and operate its properties and conduct its business; and each such Material Subsidiary is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, or the Company is subject to no material liability or disability by reason of any failure of such Material Subsidiary to be so qualified or in good standing. All of the outstanding shares of capital stock of each Material Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and, except as disclosed on Schedule III or IV to this Agreement or as 4 5 disclosed or contemplated by the Offering Memorandum, are owned by the Company, directly or through one or more subsidiaries, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind. (xii) Each of the Material Subsidiaries in which the Company or a subsidiary of the Company is a limited or general partner (hereinafter called the "Partnerships") has been duly formed and is validly existing as a limited or general partnership, as the case may be, under the laws of its jurisdiction of organization, with full power and authority to own, lease and operate properties and conduct its business; all necessary filings with respect to the formation of the Partnerships as limited or general partnerships (as the case may be) have been made under such laws; and each of the Partnerships is duly qualified to transact business and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, or the Company is subject to no material liability or disability by reason of any failure of such Partnerships to be so qualified and in good standing. (xiii) The Company had at December 31, 2000 a duly authorized and outstanding capitalization as set forth in the Offering Memorandum under the caption "Capitalization"; the Securities conform in all material respects to the description thereof contained in the Offering Memorandum and such description conforms in all material respects to the rights set forth in the instruments defining the same. (xiv) The Securities have been duly authorized by the Company. When executed, authenticated, issued and delivered in the manner provided for in the applicable Indenture and sold and paid for as provided herein, the Securities will constitute valid and binding obligations of the Company entitled to the benefits of the applicable Indenture and enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (xv) All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive rights of any stockholder of the Company. (xvi) This Agreement has been duly authorized, executed and delivered by the Company. (xvii) Each of the Indenture and the Registration Rights Agreement has been duly authorized by the Company, will be substantially in the form heretofore delivered to you or attached hereto as Exhibit A, respectively, and, when duly executed and delivered by the Company and the other parties thereto will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and 5 6 general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and, in the case of the Registration Rights Agreement, except as any rights to indemnity thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws; and the form of the Indenture conforms in all material respects to the description thereof contained in the Offering Memorandum. (xviii) Since the respective dates as of which information is given in the Offering Memorandum, except as otherwise stated therein or contemplated thereby, there has not been (A) 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 and there has not been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any change which the Company has reasonable cause to believe will involve any material adverse change, or any development involving a prospective material adverse change, in or affecting the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise, or (B) any transaction entered into by the Company or any subsidiary, other than in the ordinary course of business, that is material to the Company and its subsidiaries, considered as one enterprise, or (C), except for the cash and stock dividends on the Series H Preferred Stock and the Series M Preferred Stock, any dividend or distribution of any kind declared, paid or made by the Company on its capital stock. (xix) Neither the Company nor any Subsidiary is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it may be bound or to which any of its properties may be subject, except for such defaults that would not have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise. The execution and delivery of this Agreement, the Indenture and the Registration Rights Agreement (collectively, the "Operative Documents"), the issuance and delivery of the Securities, the consummation by the Company of the transactions contemplated by the Operative Documents and the compliance by the Company with the terms of the Operative Documents have been duly authorized by all necessary corporate action on the part of the Company and do not and will not result in any violation of the charter or by-laws of the Company or any Subsidiary, and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary under, (A) any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company or any Subsidiary is a party or by which it may be bound or to which any of its properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise) or (B) any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the 6 7 Company or any Subsidiary or any of its properties (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise) or (C) any material agreement or other material instrument (including any franchise agreement, license, permit or other governmental authorization granted by the Federal Communications Commission (hereinafter called the "FCC"), The New York State Public Service Commission on Cable Television or any other governing body having jurisdiction over cable television operations) binding upon the Company or any of its Subsidiaries (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise). (xx) The statements in the Offering Memorandum under "Risk Factors" and "Description of Securities" and the statements in the Company's annual report on Form 10-K for the year ended December 31, 1999 (the "1999 Form 10-K"), which is incorporated by reference in the Offering Memorandum, under "Business -- Competition -- Cable Television" and "Business -- Regulation -- Cable Television", insofar as such statements constitute a summary of the legal matters, documents or proceedings referred to therein, with respect to such legal matters, documents and proceedings, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. (xxi) Except as disclosed in the Offering Memorandum, no authorization, approval, consent or license of any government, governmental instrumentality or court, domestic or foreign, is required (i) for the valid authorization, issuance, sale and delivery of the Securities in the United States, or (ii) for the execution, delivery or performance by the Company of this Agreement, the Indenture or the Registration Rights Agreement except for registrations in connection with the registration of the Securities pursuant to the Registration Rights Agreement under the 1933 Act and registrations under state securities or blue sky laws and except for any such consent, approval, authorization, order or registration the failure of which to obtain or make or the absence of which would result in no material adverse effect on the Company and its subsidiaries, considered as one enterprise. (xxii) Except as disclosed in the Offering Memorandum, there is no action, suit or proceeding before or by any government, governmental instrumentality or court, domestic or foreign, now pending or, to the best of the Company's knowledge, threatened against or affecting the Company or any Subsidiary that the Company has reasonable cause to believe will result in any material adverse change in the consolidated financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise, or that will materially and adversely affect the properties or assets of the Company and its subsidiaries, considered as one enterprise, or that the Company has reasonable cause to believe will materially adversely affect the consummation of the transactions contemplated in this Agreement. 7 8 (xxiii) The Company and the Subsidiaries each has good and marketable title to all material properties and assets described in the Offering Memorandum as owned by it, free and clear of all liens, charges, encumbrances or restrictions, except such as (A) are described in the Offering Memorandum or (B) are neither material in amount nor materially significant in relation to the business of the Company and its subsidiaries, considered as one enterprise; and any material real property and buildings under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as do not interfere, to an extent material to the Company and its subsidiaries, considered as one enterprise, with the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries. (xxiv) Except as disclosed in the Offering Memorandum, the Company and the Subsidiaries each owns, possesses or has obtained all material agreements, governmental licenses, permits, certificates, consents, orders, approvals and other material authorizations (including, without limitation, all material governmental authorizations and agreements with public utilities and microwave transmission companies and pole access and rental agreements) necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as presently conducted; and neither the Company nor any Subsidiary has received any notice of proceedings relating to revocation or modification of any such licenses, permits, certificates, consents, orders, approvals or authorizations. (xxv) To the best knowledge of the Company and except as disclosed in the Offering Memorandum, no labor problem exists with its employees or with employees of the Subsidiaries that could reasonably be expected to materially and adversely affect the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise. (b) Any certificate signed by any officer of the Company or any Subsidiary and delivered to you or to counsel for the Initial Purchasers in connection with the offering of the Securities shall be deemed a representation and warranty by the Company to each Initial Purchaser as to the matters covered thereby. Section 2. Purchase, Sale and Resale of the Securities; Closing. (a) On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company agrees to sell to you, and you agree, severally and not jointly, to purchase from the Company, at the purchase price to be paid by the Initial Purchasers set forth in Schedule II, the principal amount of Securities set forth opposite your name on Schedule I, plus accrued interest, if any, from March 22, 2001, plus any additional principal amount of Securities which you may become obligated to purchase pursuant to Section 10 hereof. (b) Payment of the purchase price for, and delivery of, the Securities shall be made at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such other place in The City of New York, at 10:00 A.M. on March 22, 2001, or at such other time not more than ten full Business Days thereafter as shall be agreed upon by the 8 9 Company and you, or as shall otherwise be provided in Section 10 (such date and time of payment and delivery being herein called the "Closing Time"). Payment shall be made by wire transfer of same day federal funds to the Company to an account designated by the Company to the Initial Purchasers, against delivery of the Securities to you for the respective accounts of the several Initial Purchasers. Except as otherwise provided in Schedule II hereto, the Securities shall be in such denominations ($1,000 or an integral multiple thereof) and registered in such names as you may request in writing at least two full business days before the Closing Time. (c) You have advised the Company that you propose to offer the Securities for sale at the price set forth on Schedule II, upon the terms and conditions set forth in this Agreement and in the Offering Memorandum. Each of you hereby, severally, represents and warrants to, and agrees with, the Company that you (i) are a qualified institutional buyer within the meaning of Rule 144A (a "Qualified Institutional Buyer"), (ii) have not and will not solicit offers for, or offer or sell, such Securities by means of any form of general solicitation or general advertising or in any manner involving a public offering within the meaning of Section 4(2) of the 1933 Act, including but not limited to the methods described in Rule 502(c) of the 1933 Act, (iii) have not and will not engage in any directed selling efforts (as defined in Rule 902 of the 1933 Act) in the United States in connection with the Securities being offered and sold pursuant to Regulation S under the 1933 Act and (iv) have solicited and will solicit offers for such Securities only from, and have offered and will offer, sell or deliver such Securities, as part of their initial offering, only to (A) persons in the United States whom you reasonably believe to be Qualified Institutional Buyers or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to you that each such account is a Qualified Institutional Buyer to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in a transaction under Rule 144A and (B) non-U.S. persons outside the United States to whom offers and sales of the Securities may be made in reliance upon Regulation S under the 1933 Act. (d) In connection with the transactions described in Section 2(c)(iv)(B), each Initial Purchaser, severally, represents and warrants to, and agrees with, the Company that such Initial Purchaser will sell the Securities in such transactions only in accordance with Regulation S under the 1933 Act and has not offered or sold, and will not offer or sell, the Securities to, or for the account or benefit of, U.S. persons (i) as part of its distribution at any time or (ii) otherwise until 40 days after the Closing Time, and each Initial Purchaser will send to each distributor, dealer or other person receiving a selling concession, fee or remuneration to which it sells the Securities during the restricted period a confirmation or other notice setting forth the restrictions on offers and sales of the Securities within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings given to them by Regulation S under the 1933 Act. (e) Each of you hereby severally represents that (i) it has not offered or sold, and will not offer or sell, any Securities in the United Kingdom by means of any document, other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in transactions which have not resulted and will not result in an offer to the public within the meaning of the Public Offer of Securities Regulations 1995 (the "Regulations"), (ii) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 and 9 10 the Regulations with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom, and (iii) it has only issued or passed on and will only issue or pass on to any persons in the United Kingdom any document received by it in connection with the issue of the Securities if that person is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988 or is a person to whom such document may otherwise lawfully be issued or passed on. (f) Each of you severally represents that it has not offered or sold and will not offer or sell any Securities in transactions described in Section 2(c)(iv)(B) except in compliance with the applicable laws and regulations of the jurisdictions in which such sales occur. Section 3. Certain Covenants of the Company. The Company covenants with you as follows: (a) The Company has furnished or will furnish to you as many copies of the Offering Memorandum, as it may then be amended or supplemented, as you may reasonably request from time to time. (b) The Company will not at any time make any amendment or supplement to the Offering Memorandum (other than amendments of the documents incorporated by reference to the Offering Memorandum or the filing of subsequent documents under the 1934 Act), of which you shall not have previously been advised and furnished a copy, or to which you or your counsel shall reasonably object. The Company shall not file any document under the 1934 Act before the completion of the offering of the Securities by you, if such document would be deemed to be incorporated by reference in the Offering Memorandum and if the filing of such document would cause the Offering Memorandum, as amended or supplemented by the filing of such document, to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (c) If at any time prior to completion of the distribution of the Securities by you to purchasers who are not your affiliates, any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for you or counsel for the Company to amend or supplement the Offering Memorandum in order that the Offering Memorandum will not include an untrue statement 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, the Company will promptly prepare such amendment or supplement as may be necessary to correct such untrue statement or omission and furnish you such number of copies as you may reasonably request. Except as otherwise required by the preceding sentence, the Company will not be obligated to update the Offering Memorandum. Such updating may be done by means of the filing of one or more documents under the 1934 Act which are deemed incorporated by reference in the Offering Memorandum. (d) Notwithstanding any provision of paragraph (b) or (c) to the contrary, however, the Company's obligations under paragraphs (b) and (c) shall terminate on the earliest to occur of (i) the third anniversary of the Closing Time, (ii) the closing date of an Exchange Offer pursuant to the Registration Rights Agreement, (iii) the effective date of a Shelf 10 11 Registration Statement pursuant to the Registration Rights Agreement and (iv) the date upon which you and your affiliates cease to hold Securities acquired by you as part of their initial distribution. (e) The Company will use its reasonable best efforts, in cooperation with you, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as you may designate, if any, and to maintain such qualifications in effect for a period of not less than one year from the date of the Offering Memorandum; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Securities have been qualified as above provided. (f) For a period of three years after the Closing Time, the Company will furnish to you copies of all annual reports, quarterly reports and current reports filed 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 its securityholders generally. (g) Neither the Company nor any affiliate (as defined in Rule 501(b) of the 1933 Act) will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general advertising. With respect to those Securities sold in reliance on Regulation S, (A) none of the Company, its affiliates or any person acting on its or their behalf (other than you, as to whom the Company makes no representation) will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Company, its affiliates and each person acting on its or their behalf (other than you, as to whom the Company makes no representation) will comply with the offering restrictions requirement of Regulation S. (h) Neither the Company nor any affiliate (as defined in Rule 501(b) of the 1933 Act) of the Company will offer, sell or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the 1933 Act at a time when such Securities are not so registered. (i) The Company will not be or become, at any time prior to the expiration of three years after the Closing Time, an open-end investment trust, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940, as amended (the "Investment Company Act"). (j) During the period from the Closing Time to the earlier of (i) two years after the Closing Time, or (ii) the date of effectiveness of a registration statement as contemplated in the Registration Rights Agreement, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144 under the 1933 Act) to, resell any of the Securities that have been reacquired by them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the 1933 Act. 11 12 (k) The Company will, so long as the Securities are outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the 1933 Act, either (i) file reports and other information with the Commission under Section 13 or 15(d) of the 1934 Act, or (ii) in the event it is not subject to Section 13 or 15(d) of the 1934 Act, furnish to holders of Securities and prospective purchasers of Securities designated by such holders, upon request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the 1933 Act to permit compliance with Rule 144A in connection with resales of the Securities. (l) The Company will use its reasonable best efforts in cooperation with you to permit the Securities sold in transactions described in Section 2(c)(iv)(A) to be eligible for clearance and settlement through The Depository Trust Company. (m) Each of the Securities will bear the following legend until, in the opinion of counsel to the Company, such legend is no longer advisable because the Securities are no longer subject to the restrictions on transfer described therein: THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE DATE OF ORIGINAL ISSUE HEREOF ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; PROVIDED THAT THE COMPANY SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE, PLEDGE OR TRANSFER PURSUANT TO CLAUSE (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, AND CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY. 12 13 (n) The Company will apply the net proceeds that it receives from the offer and sale of the Securities in the manner set forth in the Offering Memorandum under the caption "Use of Proceeds". (o) The Company has been advised in writing by KPMG LLP, independent public accountants to the Company, that the consolidated financial statements and schedules audited by them and included in the Company's 1999 Form 10-K comply in form in all material respects with the applicable accounting requirements of the 1934 Act and the related published rules and regulations thereunder. Section 4. Payment of Expenses. The Company will pay and bear all costs and expenses incident to the performance of its obligations under this Agreement, including (a) the preparation and printing of the Offering Memorandum and any amendments or supplements thereto, and the cost of furnishing copies thereof to the Initial Purchasers, (b) the preparation, printing and distribution of this Agreement, the Indenture and the Securities, (c) the delivery of the Securities to the Initial Purchasers, (d) the fees and disbursements of the Company's counsel and accountants, (e) any fees charged by rating agencies for rating the Securities and (f) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee and the Transfer Agent, in connection with the Indenture and the Securities. If this Agreement is terminated by you in accordance with the provisions of Section 5 or 9(a)(i), the Company shall reimburse the Initial Purchasers for their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Initial Purchasers. Section 5. Conditions of Initial Purchasers' Obligations. The obligations of the several Initial Purchasers to purchase and pay for the Securities that they have respectively agreed to purchase hereunder are subject to the accuracy of the representations and warranties of the Company contained herein or in certificates of any officer of the Company or any Subsidiary delivered pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to the following further conditions: (a) At the Closing Time, you shall have received a signed opinion of Sullivan & Cromwell, counsel for the Company, dated as of the Closing Time, in form and substance satisfactory to counsel for the Initial Purchasers, to the effect that: (i) The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware. (ii) Each of the Indenture and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company; the Securities have been duly authorized, executed, authenticated, issued and delivered; and the Indenture and the Securities constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 13 14 (iii) The execution and delivery by the Company of the Indenture, this Agreement and the Registration Rights Agreement, the issuance of the Securities in accordance with the Indenture and the sale of the Securities by the Company to you pursuant to this Agreement do not, and the performance by the Company of its obligations under the Indenture and this Agreement will not, violate the Company's Certificate of Incorporation or By-Laws. (iv) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Company under the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware for the issuance, sale and delivery of the Securities by the Company to you have been obtained or made. (v) This Agreement has been duly authorized, executed and delivered by the Company. (vi) Neither registration of the Securities under the 1933 Act nor qualification of the Indenture under the Trust Indenture Act of 1939 is required for (i) the offer and sale of the Securities by the Company to the Initial Purchasers or (ii) the reoffer and resale of the Securities by the Initial Purchasers, in each case (i) and (ii) in the manner contemplated by the Purchase Agreement and the Offering Memorandum relating to the Securities. Such counsel shall also furnish you with a letter to the effect that as counsel to the Company, they reviewed the Offering Memorandum, participated in discussions with representatives of the Initial Purchasers and of the Company and its accountants; between the execution of this Agreement and the Closing Time, such counsel participated in further discussions with representatives of the Initial Purchasers and of the Company and its accountants in which the contents of certain portions of the Offering Memorandum and related matters were discussed and reviewed, reviewed certain documents filed by the Company with the Commission, certificates of certain officers of the Company, an opinion addressed to the Initial Purchasers from Robert S. Lemle, Esq., Vice Chairman, Secretary and General Counsel for the Company, and a letter from the Company's independent accountants; on the basis of the information that such counsel gained in the course of the performance of the services referred to above, considered in the light of such counsel's understanding of the applicable law and the experience such counsel have gained through their practice, they confirm to you that, in such counsel's opinion, nothing that came to such counsel's attention in the course of such review has caused such counsel to believe that, as of the date of the Offering Memorandum or as of the date hereof, the Offering Memorandum contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; such counsel shall state that the limitations inherent in the independent verification of factual matters and the character of determinations involved in the process of preparing an offering memorandum are such that such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Memorandum except for those made under the captions "Description of Securities" and "Plan of Distribution" in the Offering Memorandum insofar as they relate to provisions of documents therein described; 14 15 also, such counsel need express no opinion or belief as to the financial statements, pro forma financial statements, if any, or other financial data contained in the Offering Memorandum, or as to the description of statutes, regulations, proceedings or matters referred to in Section 5(c) hereof. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and no opinion as to federal or state communications laws. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and the Subsidiaries and certificates of public officials. (b) At the Closing Time, you shall have received a signed opinion of Robert S. Lemle, Esq., Vice Chairman, Secretary and General Counsel for the Company, in form and substance satisfactory to counsel to the Initial Purchasers, to the effect that: (i) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with corporate power and authority under such laws to own, lease and operate its properties and conduct its business as described in the Offering Memorandum. (ii) The Company is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (iii) Each Material Subsidiary that is a corporation is duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority under such laws to own, lease and operate its properties and conduct its business. Each Material Subsidiary that is a partnership is duly organized under the laws of the jurisdiction of its organization. (iv) All of the outstanding shares of capital stock of each Material Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable; except as set forth on Schedules III and IV to this Agreement or as disclosed in or as contemplated by the Offering Memorandum, all of such shares are owned by the Company, directly or through one or more subsidiaries, free and clear of any material pledge, lien, security interest, charge, claim, equity or encumbrance of any kind; no holder thereof is subject to personal liability under the certificate of incorporation or by-laws of the respective Material Subsidiary or the corporation law of the jurisdiction in which such Material Subsidiary is organized by reason of being such a holder and none of such shares was issued in violation of the preemptive rights of any stockholder of such Material Subsidiary under the certificate of incorporation or by-laws of such Material Subsidiary or the corporation law of the jurisdiction in which such Material Subsidiary is organized. 15 16 (v) To such counsel's knowledge, there are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is or may be a party, or of which any of their properties are or may be the subject, of a character which are required to be disclosed in the 1999 Form 10-K or any Form 10-Q of the Company, other than those disclosed therein. (vi) The documents incorporated by reference in the Offering Memorandum or any further amendment or supplement thereto made by the Company prior to the Closing Time (other than the financial statements and related schedules therein and any untrue statement or omission of a material fact contained therein which was corrected in the Offering Memorandum, as to which such counsel need express no opinion), when they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and he has no reason to believe that such documents, read together, as of the date of the Offering Memorandum or as of the Closing Time, contained or contain an untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (vii) Such counsel does not know of any contracts or documents of a character required to be described or referred to in the documents incorporated by reference in the Offering Memorandum or to be filed as exhibits to the documents incorporated by reference in the Offering Memorandum that are not described, referred to or filed as required. (viii) To the knowledge of such counsel, no default exists in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Company's 1999 Form 10-K or filed as an exhibit to the 1999 Form 10-K or any subsequent Form 10-Q of the Company, which default would have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise. (ix) The execution and delivery of this Agreement, the Indenture and the Registration Rights Agreement by the Company, the issuance and delivery of the Securities, the consummation by the Company of the transactions contemplated in this Agreement and compliance by the Company with the terms of this Agreement, the Indenture and the Registration Rights Agreement will not conflict with the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument (including any franchise agreement, license, permit or other governmental authorization granted by the FCC, The New York State Public Service Commission on Cable Television or any other Federal or New York State governing body having jurisdiction over cable television operations) known to such counsel to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the property or assets of the Company or any Subsidiary is subject, which conflict, breach, violation or default would have a material adverse effect on the financial position, stockholder's equity or results of operations of 16 17 the Company and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Company or any Federal, New York or Delaware General Corporation Law statute or any order, rule or regulation known to such counsel of any Federal, New York or Delaware court or governmental agency or body having jurisdiction over the Company or any Subsidiary or any of their properties, which violation in each case would have a material adverse effect on the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, taken as a whole; 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, except with respect to such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities laws in connection with the purchase and distribution of the Securities by the Initial Purchasers. In rendering such opinion, such counsel may state that he expresses no opinion as to the laws of any jurisdiction other than the Federal laws of the United States (other than federal communications laws, as to which such counsel need express no opinion), the laws of the State of New York and the General Corporation Law of the State of Delaware. In giving such opinion, such counsel may rely, as to all matters governed by the laws of any other jurisdiction, upon opinions of other counsel, who shall be counsel satisfactory to counsel for the Initial Purchasers, in which case the opinion shall state that he believes you and he are entitled to so rely. Such counsel may also state that, insofar as such opinion involves factual matters, he has relied, to the extent he deems proper, upon certificates of officers of the Company and the Subsidiaries and certificates of public officials. (c) At the Closing Time, you shall have received a signed opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as special communications counsel to the Company, in form and substance satisfactory to counsel to the Initial Purchasers, to the effect that: (i) The approvals, if any, required to be obtained from the FCC to consummate the transactions contemplated by this Agreement have been obtained and are in full force and effect. (ii) Such counsel does not know of any federal communications and copyright statutes that are principally directed to the regulation of cable properties applicable to the Company that are not described in the Offering Memorandum but would be material and relevant to the business of the Company, and the descriptions in the Offering Memorandum of such statutes therein described are accurate and fairly summarize the information shown. (iii) The information in the Offering Memorandum under the captions "Risk Factors -- Regulatory risks are inherent and substantial in our businesses" and "Risk Factors -- We are exposed to a significant and credible risk of competition" and in the 1999 Form 10-K under the captions "Business -- Competition -- Cable Television" and "Business -- Regulation -- Cable Television", to the extent that such sections describe 17 18 statutes, regulations and governmental proceedings or matters involving federal communications and copyright law and policy and the impact thereof on the business in which the Company and its subsidiaries are engaged, has been reviewed by them and fairly represents the communications and copyright law described therein applicable to the Company and its subsidiaries as disclosed in the Offering Memorandum and material and relevant to the business of the Company and its subsidiaries. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the District of Columbia, the Federal law of the United States and the corporate law of the State of Delaware, upon opinions of other counsel, who shall be counsel satisfactory to counsel for the Initial Purchasers, in which case the opinion shall state that they believe you and they are entitled to so rely. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and the Subsidiaries and certificates of public officials. (d) At the Closing Time, you shall have received the favorable opinion of Shearman & Sterling, counsel for the Initial Purchasers, dated as of the Closing Time, to the effect that the opinions delivered pursuant to Sections 5(a), 5(b) and 5(c) appear on their face to be appropriately responsive to the requirements of this Agreement except, specifying the same, to the extent waived by you, and with respect to the incorporation and legal existence of the Company, the Securities, this Agreement, the Indenture, the Registration Rights Agreement, the Offering Memorandum, the documents incorporated by reference therein and such other related matters as you may require. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and no opinion as to federal or state communications laws. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and the Subsidiaries and certificates of public officials. (e) At the Closing Time, (i) the Offering Memorandum, as it may then be amended or supplemented, shall not 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, (ii) there shall not have been, since the respective dates as of which information is given in the Offering Memorandum, any material adverse change or any development involving a prospective material adverse change, in or affecting the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise, (iii) the Company shall have complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time and (iv) the other representations and warranties of the Company set forth in Section 1(a) shall be accurate as though expressly made at and as of the Closing Time. At the Closing Time, you shall have received a certificate of the President, a Vice Chairman or a Vice President, and the Treasurer or Controller, of the Company, dated as of the Closing Time, to such effect. (f) You shall have received from KPMG LLP the letter specified in Sections 1 and 2 of Exhibit B at the date hereof and the letter specified in Section 3 of Exhibit B at the Closing Time. 18 19 (g) On or after the date hereof, (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. (h) At the Closing Time, the Securities shall have been designated as eligible for trading in the Private Offering, Resale and Trading through Automatic Linkages (PORTAL) market. (i) At the Closing Time, counsel for the Initial Purchasers shall have been furnished with all such documents, certificates and opinions as they may reasonably request for the purpose of enabling them to pass upon the issuance and sale of the Securities contemplated in this Agreement and the matters referred to in Section 5(d) and in order to evidence the accuracy and completeness of any of the representations, warranties or statements of the Company, the performance of any of the covenants of the Company, or the fulfillment of any of the conditions herein contained. If any of the conditions specified in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, this Agreement may be terminated by you on notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party. Notwithstanding any such termination, the provisions of Sections 6, 7 and 8 shall remain in effect. Section 6. Indemnification. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the 1933 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a material fact contained in or included the Offering Memorandum (or any amendment or supplement thereto), and any documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including fees and disbursements of counsel chosen by you), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental 19 20 agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity agreement does not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser expressly for use in the Offering Memorandum (or any amendment or supplement thereto). (b) Each Initial Purchaser severally agrees to indemnify and hold harmless the Company, its directors, officers, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity agreement in Section 6(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Offering Memorandum (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser through you expressly for use in the Offering Memorandum (or any amendment or supplement thereto). (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. Section 7. Contribution. In order to provide for just and equitable contribution in circumstances under which the indemnity provided for in Section 6 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Initial Purchasers shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity incurred by the Company and one or more of the Initial Purchasers, as incurred, in such proportions that the Initial Purchasers are responsible for that portion represented by the percentage that the discount hereunder with respect to the offering of the Securities bears to the offering price of the Securities, and the Company is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Initial Purchaser, and each director or officer of the Company and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company. 20 21 Section 8. Agreements to Survive Delivery. The agreements and other statements of the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Company, or any Initial Purchaser or controlling person within the meaning of Section 15 of the 1933 Act and will survive delivery of and payment for the Securities. Section 9. Termination of Agreement. (a) You may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the respective dates as of which information is given in the Offering Memorandum, any material adverse change or any development involving a prospective material adverse change in or affecting the financial position, stockholder's equity or results of operations of the Company and its subsidiaries, considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable to market the Securities or enforce contracts for the sale of Securities, or (iii) if trading in any securities of the Company has been suspended by the Commission, the National Association of Securities Dealers, Inc. or the New York Stock Exchange, or if trading generally on the New York Stock Exchange or in the over-the-counter market has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by such exchange or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either federal or New York authorities. (b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party, except to the extent provided in Section 4. Notwithstanding any such termination, the provisions of Sections 6, 7 and 8 shall remain in effect. Section 10. Default by One or More of the Initial Purchasers. If one or more of the Initial Purchasers shall fail at the Closing Time to purchase the Securities that it or they are obligated to purchase pursuant to this Agreement (the "Defaulted Securities"), you shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Initial Purchasers, or any other Initial Purchasers, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms set forth in this Agreement; if, however, you have not completed such arrangements within such 24-hour period, then: (a) if the aggregate principal amount of Defaulted Securities does not exceed 10% of the Securities to be purchased pursuant to this Agreement, the non-defaulting Initial Purchasers shall be obligated to purchase the full amount thereof in the proportions that their respective purchase obligation proportions bear to the purchase obligations of all non-defaulting Initial Purchasers, or (b) if the aggregate principal amount of Defaulted Securities exceeds 10% of the Securities to be purchased pursuant to this Agreement, this Agreement shall terminate without liability on the part of any non-defaulting Initial Purchaser. 21 22 No action taken pursuant to this Section shall relieve any defaulting Initial Purchaser from liability in respect of its default. In the event of any such default that does not result in a termination of this Agreement, either you or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Offering Memorandum or in any other documents or arrangements. As used herein, the term "Initial Purchaser" includes any person substituted for an Initial Purchaser under this Section 10. Section 11. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered, mailed or transmitted by any standard form of telecommunication. Notices to you shall be directed to Banc of America Securities LLC, 100 North Tryon Street, Charlotte, North Carolina 28255, attention of Lynn T. McConnell; Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, attention of Carolyn E. Saacke; Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, 250 Vesey Street, New York, New York 10281, attention of Toby Norris, and notices to the Company shall be directed to it at CSC Holdings, Inc., 1111 Stewart Avenue, Bethpage, New York 11714, attention of Robert S. Lemle, Esq., Vice Chairman, General Counsel and Secretary, with a copy to Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, attention of John P. Mead, Esq. Section 12. Parties. This Agreement is made solely for the benefit of the several Initial Purchasers, the Company and, to the extent expressed, any person controlling the Company or any of the Initial Purchasers, and the directors and officers of the Company, and their respective executors, administrators, successors and assigns and, subject to the provisions of Section 10, no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include any purchaser, as such purchaser, from any of the several Initial Purchasers of the Securities. All of the obligations of the Initial Purchasers hereunder are several and not joint. Section 13. Governing Law and Time. This Agreement shall be governed by the laws of the State of New York. Specified times of the day refer to New York City time. Section 14. Captions. The captions included in this Agreement are included solely for convenience of reference and are not considered to be part of this Agreement. Section 15. Counterparts. This Agreement may be executed in one or more counterparts and when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement. 22 23 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement between the Company and the Initial Purchasers in accordance with its terms. Very truly yours, CSC HOLDINGS, INC. By /s/ William J. Bell ------------------------------- Name: William J. Bell Title: Vice Chairman 24 CONFIRMED AND ACCEPTED, as of the date first above written: By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED Acting on behalf of itself and the other Initial Purchasers named in Schedule I hereto By /s/ Eric Federman ----------------------------------- Name: Eric Federman Title: Director, Investment Banking 25 SCHEDULE I
Initial Purchaser ----------------- Principal Amount of 7 5/8 % Senior Notes due 2011 ----------------------------- Banc of America Securities LLC............................. $ 200,000,000 Bear, Stearns & Co. Inc.................................... 200,000,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated................................ 200,000,000 Chase Securities Inc....................................... 80,000,000 TD Securities (USA) Inc.................................... 80,000,000 BMO Nesbitt Burns Corp..................................... 30,000,000 BNY Capital Markets, Inc................................... 30,000,000 Barclays Capital Inc....................................... 30,000,000 Credit Lyonnais Securities (USA) Inc....................... 30,000,000 First Union Securities, Inc................................ 30,000,000 Fleet Securities, Inc...................................... 30,000,000 RBC Dominion Securities Corporation........................ 30,000,000 Scotia Capital (USA) Inc. ................................. 30,000,000 -------------- Total...................................................... $1,000,000,000 ==============
Schedule I 26 SCHEDULE II CSC HOLDINGS, INC. 7 5/8% Senior Notes due 2011 Principal amount to be issued: $1,000,000,000 Interest rate: 7 5/8% Interest accrues from: March 22, 2001 Date of maturity: April 1, 2011 Redemption Provisions: None Sinking fund requirements: None Initial offering price to investors: 99.679% of the principal amount of the Notes plus accrued interest, if any, from March 22, 2001. Purchase price: 98.429% of the principal amount of the Notes plus accrued interest, if any, from March 22, 2001. Method of Payment: Payment shall be made to the Company in same day federal funds by wire transfer. Closing date, time and location: 10:00 A.M., March 22, 2001, at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022. Listing requirement: None
Schedule II 27 SCHEDULE III RESTRICTED SUBSIDIARIES (* - material subsidiary) 151 Fulton Street Corporation A-R Cable Services - NY, Inc. Arsenal MSub 2 Inc. Cablevision Area 9 Corporation Cablevision Fairfield Corporation Cablevision Lightpath, Inc. Cablevision MFR, Inc. Cablevision of Brookhaven, Inc. Cablevision of Brookline, Inc. Cablevision of Cleveland G.P., Inc. Cablevision of Cleveland L.P., Inc. Cablevision of Cleveland, L.P. Cablevision of Connecticut Corporation Cablevision of Connecticut Limited Partnership Cablevision of Hudson County, Inc. Cablevision of Litchfield, Inc. Cablevision of Monmouth, Inc. Cablevision of New Jersey, Inc. Cablevision of Newark Cablevision of Oakland, Inc. Cablevision of Ossining Limited Partnership (f/k/a Cablevision of Brookline LP) Cablevision of Paterson, Inc. Cablevision of Rockland/Ramapo, Inc. Cablevision of Southern Westchester, Inc. Cablevision of the Midwest Holding, Inc. Cablevision of Wappingers Falls, Inc. (f/k/a Cablevision of Boston, Inc.) Cablevision of Warwick, Inc. Cablevision Systems Brookline Corporation Cablevision Systems Dutchess Corporation Cablevision Systems East Hampton Corporation Cablevision Systems Great Neck Corporation Cablevision Systems Huntington Corporation Cablevision Systems Islip Corporation Cablevision Systems Long Island Corporation *Cablevision Systems New York City Corporation (f/k/a NYC LP Corp.) Cablevision Systems of Southern Connecticut Limited Partnership Cablevision Systems Suffolk Corporation Cablevision Systems Westchester Corporation Communications Development Corporation CSC Acquisition - MA, Inc. CSC Acquisition - NY, Inc. Schedule III-1 28 CSC Acquisition Corporation CSC Gateway Corporation CSC TKR, Inc. CSC TKR I, Inc. KRC/CCC Investment Partnership Montague Cable Company, Inc. Petra Cablevision Corporation Samson Cablevision Corp. Suffolk Cable Corporation Suffolk Cable of Shelter Island, Inc. Suffolk Cable of Smithtown, Inc. Telerama, Inc. Schedule III-2 29 SCHEDULE IV UNRESTRICTED SUBSIDIARIES (* - material subsidiary) AMC II Holding Corporation (1) AMC Productions, Inc. (1) American Movie Classics Company (1) American Movie Classics Holding Corporation (1) American Pop, LLC American Sports Classics, L.L.C. Bravo Company Bravo Holding Corporation Bravo II Holding Corporation Bravo Programming, Inc. Cable Networks, Inc. Foxwatch Productions, Inc. Garden Programming, L.L.C. IFC Entertainment LLC IFC Films LLC IFC Productions I L.L.C. IFC Theatres, LLC *Madison Square Garden, L.P. (2) Madison Square Garden CT, LLC Metro Channel, L.L.C. Metro Channel Holdings I, LLC Metro Channel Holdings II, LLC Metro Channel Productions, LLC Metro New York LLC MSG Aircraft Leasing, LLC MSG Boxing, LLC MSG Eden Corp. MSG Flight Operations, LLC MSG/TJF Scarlet Productions, LLC MuchMusic U.S.A. Venture National Advertising Partners National PSNA Holdings I, LLC National PSNA Holdings II, LLC National Sports Partners News 12.com, Inc. (f/k/a Neighborhood News Holdings, Inc.) News 12 Holding Corporation News 12 II Holding Corporation News 12 New Jersey L.L.C. News 12 The Bronx, LLC News 12 The Bronx Holding Corporation Next Wave Films, L.L.C. Schedule IV-1 30 New England Sea Wolves, L.L.C. New York Rangers Enterprises Company Prime SportsChannel Networks Associates Radio City Networks LLC Radio City Networks Holdings I, LLC Radio City Networks Holdings II, LLC Radio City Productions, L.L.C. Radio City Trademarks, L.L.C. Rainbow Advertising Holdings, LLC Rainbow Advertising Sales Corporation Rainbow CT Holdings, Inc. Rainbow DBS Holdings, Inc. Rainbow Films Holding LLC Rainbow Garden Corp. Rainbow Media Group, LLC *Rainbow Media Holdings, Inc. *Rainbow Media Sports Holdings, Inc. Rainbow MM Holdings Corporation Rainbow MM Holdings II Corporation Rainbow National Sports Holdings, LLC Rainbow Network Communications Rainbow News 12 Company Rainbow NJ Holdings, Inc. Rainbow NJ Holdings II, Inc. *Rainbow Regional Holdings, LLC Rainbow Regional Sports News Holdings, LLC Rainbow Travel, Inc. Rainbow Westchester Holdings, Inc. RCE Humbug Productions LLC RCE/4KE Productions LLC Regional Chicago Holdings, LLC Regional Cincinnati Holdings I, LLC Regional Cincinnati Holdings II, LLC *Regional MSG Holdings, LLC Regional NE Holdings I, LLC Regional NE Holdings II, LLC Regional Ohio Holdings I, LLC Regional Ohio Holdings II, LLC Regional Pacific Holdings, LLC *Regional Programming Partners Regional Sports News, LLC RNC Holding Corporation RNC II Holding Corporation Romance Classics Productions, Inc. (1) SC America Holding Corporation Schedule IV-2 31 SC Florida Holding Company, L.L.C. SC Florida Holding Corporation SC Los Angeles Holding Corporation Soccer/USA Partners, L.P. SportsChannel America Associates SportsChannel America Soccer, Inc. SportsChannel Associates (2) SportsChannel Chicago Associates SportsChannel Cincinnati Associates SportsChannel Florida Associates SportsChannel Florida Holding Company L.L.C. SportsChannel Los Angeles Holding Corporation SportsChannel New England Limited Partnership SportsChannel Ohio Associates SportsChannel Pacific Associates SportsChannel Ventures, Inc. The 31st Street Company, L.L.C. The Independent Film Channel LLC The Story Channel, Inc. WE: Women's Entertainment LLC (f/k/a Romance Classics, LLC) World Cinema, division of Bravo Company WSN, LLC 1070 Jericho Turnpike Corp. 111 New South Road Corporation 1111 Stewart Corporation 1144 Route 109 Corp. 151 Fulton Street Corporation 389 Adams Street Corporation AC Productions West, Inc. AC Productions, Inc. ACEP LLC American Catholic Enterprises At The Movies Productions East LLC American Catholic Enterprises Chat Productions East LLC American Catholic Enterprises Hub Productions East LLC American Catholic Enterprises Masters Productions East LLC American Catholic Enterprises News Productions East LLC American Catholic Enterprises Productions East LLC American Catholic Enterprises Studios Productions East LLC American Catholic LLC Boston Holding, LLC Boston PCS, LLC Cablevision Digital Development, LLC *Cablevision Electronics Investments, Inc. Cablevision Lightpath - CT, Inc. Cablevision Lightpath - MA, Inc. Schedule IV-2 32 Cablevision Lightpath - MI, Inc. Cablevision Lightpath - NJ, Inc. Cablevision Lightpath - NY, Inc. Cablevision Lightpath - OH, Inc. Cablevision NYI L.L.C. Cablevision PCS Investment, Inc. Cablevision PCS Management, Inc. Cablevision Real Estate Corporation Cleveland Holding, LLC Cleveland PCS Realty, LLC Cleveland PCS, LLC Coram Route 112 Corporation *CCG Holdings, Inc. CCC Cobble Hill Cinema Corp. CCC Franklin Square Cinema Corp. CSC @Security Holding, LLC CSC At Home Holding Corporation CSC Charter Holdings I, Inc. CSC Charter Holdings II, Inc. CSC Charter Holdings III, Inc. CSC Investments, Inc. CSC Leapfrog Holdings, LLC CSC MA Holdings I, Inc. CSC MA Holdings II, Inc. CSC MA Holdings III, Inc. CSC Metro Cinema LLC CSC Nassau, Inc. CSC Ohio Holdings I, Inc. CSC Ohio Holdings II, Inc. CSC Ohio Holdings III, Inc. CSC Sterling Holdings, LLC CSC Technology, Inc. (f/k/a CSC Realty, Inc.) CSC Transport, Inc. CSC Transport II, Inc. CSC Transport III, Inc. ECC Holding Corporation Frowein Road Corporation Knollwood Development Corp. Missouri Cable Partners, L.P. NCC LP Corp. New York PCS Holding, LLC New York PCS, LLC Northcoast Communications, L.L.C. PVI Holding, LLC Sterling Digital LLC The New York Interconnect L.L.C. Schedule IV-4 33 U.S. Cable Television Group, L.P. V-C Mo. G.P., Inc. - ------------------- 1 Shares of AMC Productions, Inc., Romance Classics Productions, Inc. and partnership interests in American Movie Classics Company held by AMC II Holding Corporation ("AMC II") and American Movie Classics Holdings Corporation ("AMCHC") are pledged to Toronto-Dominion under the terms of a Stock Pledge Agreement, dated as of April 2, 1997, between American Movie Classics Holding Company and Toronto-Dominion (Texas), Inc., as agent for the Banks and a Partners Pledge Agreement, dated as of April 2, 1997, by and between AMC II and AMCHC and Toronto Dominion (Texas), Inc. 2 All of the capital stock, partnership interests or limited liability company interests are pledged under the Credit Party Pledge Agreement, dated as of June 6, 1997 to the Madison Square Garden, L.P. Credit Agreement. Schedule IV-5 34 EXHIBIT A Form of Registration Rights Agreement A-1 35 EXHIBIT B March 15, 2001 MATTERS TO BE COVERED BY LETTER OR LETTERS OF INDEPENDENT PUBLIC ACCOUNTANTS KPMG LLP shall have furnished to you the following letter or letters (in each case in form and substance satisfactory to you): (1) At the date hereof, a letter to the effect that: (a) they are independent accountants with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the applicable published 1933 Act Regulations; (b) in their opinion, except as disclosed in the Offering Memorandum, the audited consolidated financial statements and the related financial statement schedules of the Company and its subsidiaries included or incorporated by reference in such annual report on Form 10-K comply as to form in all material respects with the applicable accounting requirements of the 1934 Act as it applies to Form 10-K and the related published 1934 Act Regulations; and (c) in addition to their examinations, inspections, inquiries and other procedures referred to therein, they have performed such other procedures, specified by you, not constituting an audit, as they have agreed to perform and report on with respect to certain amounts, percentages, numerical data and other financial information in the Form 10-K and have compared certain of such amounts, percentages, numerical data and financial information with, and have found such items to be in agreement with or derived from, the detailed accounting records of the Company and its subsidiaries. (2) At the date hereof, a letter with respect to each of the Company's quarterly reports on Form 10-Q (each a "10-Q Letter") filed prior to the date hereof and subsequent to the Company's most recently filed annual report on Form 10-K, to the effect that: (a) they reaffirm as of the date of such letter (and as though made on the date of such letter) all statements made in the 10-K Letter, except that the procedures specified therein shall have been carried out to a specified date not more than five days prior to the date of such 10-Q Letter; (b) on the basis of procedures (but not an examination in accordance with generally accepted auditing standards) consisting of: (i) a reading of minutes of all meetings of the stockholders and directors of the Company and its subsidiaries and the Pricing Committee of the Company's Board of Directors and any subsidiary committees from B-1 36 (ii) the date of the latest audited consolidated financial statements to the specified date referred to in Section 2(a); (iii) a reading of the unaudited condensed consolidated financial statements of the Company and its subsidiaries included or incorporated by reference in the quarterly report on Form 10-Q dated the date of such 10-Q Letter; (iv) inquiries of certain officials of the Company and its subsidiaries; and nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements included or incorporated by reference in such quarterly report on Form 10-Q do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act as it applies to Form 10-Q and the related published 1934 Act Regulations or that any material modifications should be made to the unaudited condensed consolidated financial statements included or incorporated by reference in such quarterly report for them to be in conformity with generally accepted accounting principles, except as disclosed in the notes to such unaudited condensed consolidated financial statements or as otherwise described in such 10-Q Letter; (c) in addition to their examinations, inspections, inquiries and other procedures referred to therein, they have performed such other procedures, specified by you, not constituting an audit, as they have agreed to perform and report on with respect to certain amounts, percentages, numerical data and other financial information in the Form 10-Q and have compared certain of such amounts, percentages, numerical data and financial information with, and have found such items to be in agreement with or derived from, the detailed accounting records of the Company and its subsidiaries. (3) At the Closing Time, a letter dated the Closing Time (the "Closing Letter"), to the effect that: (a) they reaffirm as of the date of the Closing Letter (and as though made on the date of the Closing Letter) all statements made in the 10-K Letter and in each 10-Q Letter, if any, except that the procedures specified therein shall have been carried out to a specified date not more than five days prior to the date of the Closing Letter; and (b) based on the procedures set forth in Section 2(b) (but carried out to the specified date referred to in Section 3(a)), nothing came to their attention that caused them to believe that, from the date of the latest balance sheet of the Company and its subsidiaries included or incorporated by reference in the Prospectus to such specified date, there were any increases or decreases in financial statement amounts specified by you as they have agreed to perform. B-2 EX-4.1 3 y48336ex4-1.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 4.1 CSC HOLDINGS, INC. 7 5/8% Senior Notes due 2011 Registration Rights Agreement Dated: March 22, 2001 2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT dated March 22, 2001, between CSC HOLDINGS, INC., a Delaware corporation (the "Company"), and BANC OF AMERICA SECURITIES LLC, BEAR, STEARNS & CO. INC., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, CHASE SECURITIES INC., TD SECURITIES (USA) INC., BMO NESBITT BURNS CORP., BNY CAPITAL MARKETS, INC., BARCLAYS CAPITAL INC., CREDIT LYONNAIS SECURITIES (USA) INC., FIRST UNION SECURITIES, INC., FLEET SECURITIES, INC., RBC DOMINION SECURITIES CORPORATION and SCOTIA CAPITAL (USA) INC., as the initial purchasers (the "Initial Purchasers") of the Securities referred to below pursuant to the Purchase Agreement, dated March 15, 2001, between the Initial Purchasers and the Company, in connection with the issuance of $1,000,000,000 aggregate principal amount of the Company's 7 5/8% Senior Notes due 2011 (the "Securities") pursuant to the Indenture, dated as of March 22, 2001, between the Company and The Bank of New York, trustee (the "Indenture"). In consideration of the foregoing, the parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following defined terms shall have the following meanings: "best efforts" with respect to the Company shall mean the Company's best efforts except that such term shall mean reasonable best efforts in the event and to the extent that the Company could satisfy the standard for the issuance of a Suspension Notice pursuant to the third paragraph of Section 5 hereof. "Business Day" shall mean any day except (i) a Saturday, Sunday or other day in The City of New York on which banks are required or authorized to close or (ii) any other day on which the SEC is closed. "Closing Time" shall mean the Closing Time as defined in the Purchase Agreement. "Company" shall have the meaning set forth in the preamble and shall also include a company which succeeds to all or substantially all of the Company's cable television business. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Exchange Offer" shall mean the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof. "Exchange Offer Registration" shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof. 2 3 "Exchange Offer Registration Statement" shall mean an exchange offer registration statement of the Company pursuant to the provisions of Section 2(a) hereof on Form S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Exchange Securities" shall mean the 7 5/8% Series B Senior Notes due 2011 issued by the Company under the Indenture as Exchange Securities (as defined therein), to be offered to Holders of Securities pursuant to the Exchange Offer. "Holder" shall mean, individually, each of the Initial Purchasers, for so long as they own any Registrable Securities, and any of the Initial Purchasers' successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities. "Indenture" shall have the meaning set forth in the preamble. "Initial Purchasers" shall have the meaning set forth in the preamble. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities. "Person" shall mean an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. "Purchase Agreement" shall mean the Purchase Agreement, dated March 15, 2001, between the Company and the Initial Purchasers, providing for the initial purchase and sale of the Securities. "Registrable Securities" shall mean the Securities; provided, however, that any such Securities shall cease to be Registrable Securities upon the earlier to occur of the date on which (i) the Exchange Offer has been consummated, (ii) a Registration Statement with respect to such Securities shall have been declared effective under the Securities Act and such Securities shall have been disposed of pursuant to such Registration Statement, provided, that Securities not disposed of pursuant to an effective Shelf Registration Statement shall cease to be Registrable Securities two years from the date such Shelf Registration Statement is declared effective by the SEC, or such longer period as the Company's obligation to keep such Shelf Registration Statement effective is extended in accordance with Section 5 hereof, (iii) such Registrable Securities have been sold to the public pursuant to Rule 144(k) (or any similar provision then in force, but not 3 4 Rule 144A) under the Securities Act, or (iv) such Registrable Securities shall have ceased to be outstanding. "Registration Expenses" shall mean any and all expenses incident to the performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws, (iii) all expenses of any Persons acting on behalf of the Company in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto and other documents reasonably relating to the performance of and compliance with this Agreement by the Company, (iv) all rating agency fees, (v) the fees and disbursements of counsel for the Company and, in connection with a Shelf Registration Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and shall be reasonably acceptable to the Company), and (vi) any fees and expenses of the independent public accountants of the Company, including the expenses of any special audits or "cold comfort" letters (in connection with a Shelf Registration) required by or necessary to such performance and compliance, but excluding underwriting discounts and commissions, fees and expenses and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. "Registration Statement" shall mean any Exchange Offer Registration Statement or Shelf Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities" shall have the meaning set forth in the preamble. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Shelf Registration" shall mean a registration effected pursuant to Section 2(b) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 2(b) hereof which covers all of the Registrable Securities on an appropriate form under Rule 4l5 under the Securities Act, or any similar rule that may be adopted by the SEC and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Trustee" shall mean the trustee with respect to the Securities and the Exchange Securities under the Indenture. 4 5 "Underwritten Registration or Underwritten Offering" shall mean a registration in which Registrable Securities are sold to one or more Underwriters (as hereinafter defined) for reoffering to the public. 2. Registration Under the Securities Act. (a) Exchange Offer Registration. The Company shall, for the benefit of the Holders of the Securities, file an Exchange Offer Registration Statement with respect to Exchange Securities within 60 days after the Closing Time and use its best efforts to cause such Exchange Offer Registration Statement to be declared effective under the Securities Act within 180 days after the Closing Time. Upon such Exchange Offer Registration Statement becoming effective under the Securities Act, the Company shall offer the Exchange Securities in return for surrender of the Securities. The Exchange Offer shall remain open for not less than 30 days (or longer if required by applicable law) after the date notice of the Exchange Offer is mailed to Holders of the Securities. For the Securities surrendered to the Company under the Exchange Offer, the Holder will receive Exchange Securities having an aggregate principal amount equal to that of the surrendered Securities. Interest on the Exchange Securities shall accrue from the last maturity date of any interest installment on which interest was paid on the Security so surrendered (or the Exchange Securities, as the case may be or, if no interest has been paid on the Securities, from March 22, 2001). The Company shall commence the Exchange Offer by mailing the related Exchange Offer Prospectus and accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law: (i) that the Exchange Offer is being made pursuant to this Registration Rights Agreement and that all Registrable Securities validly tendered will be accepted for exchange; (ii) the date of acceptance for exchange (which shall be a Business Day no earlier than 30 days nor later than 40 days (unless otherwise required by applicable law) from the date such notice is mailed) (the "Exchange Date"); (iii) that any Registrable Security not tendered will remain outstanding and shall accrue interest at the initial rate borne by the Securities and, other than Registrable Securities referred to in Section 2(b)(iii) below, will not retain any rights under this Registration Rights Agreement; (iv) that Holders electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, City of New York) specified in the notice prior to the close of business on the Business Day immediately preceding the Exchange Date; and (v) that Holders will be entitled to withdraw the election, not later than the close of business on the Business Day immediately preceding the Exchange Date, by sending to the institution and at the address (located in the Borough of Manhattan, City of New York) specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the number of shares of Registrable Securities 5 6 delivered for exchange, and a statement that such Holder is withdrawing its election to have such Registrable Securities exchanged. On the Exchange Date, the Company shall: (i) accept for exchange Registrable Securities tendered and not validly withdrawn pursuant to the Exchange Offer; and (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities so accepted for exchange by the Company, and issue and mail to each Holder or such Holder's nominee, for the Registrable Securities so surrendered, new Exchange Securities having an aggregate liquidation preference equal to that of the Registrable Securities surrendered by such Holder. The Company shall use its best efforts to complete the Exchange Offer as provided above, and in accordance with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws in connection with the Exchange Offer. Consummation of the Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not, and consummation of the Exchange Offer will not, violate applicable law or any applicable interpretation of the staff of the SEC. The Company shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer. (b) Shelf Registration. In the event that (i) the Company determines that the Exchange Offer Registration provided in Section 2(a) above is not available or may not be consummated because it would violate applicable law or the applicable interpretations of the SEC staff, (ii) the Exchange Offer is not for any other reason consummated within 180 days after the Closing Time, or (iii) following the consummation of the Exchange Offer a Registration Statement must be filed and a Prospectus must be delivered by the Initial Purchasers in connection with any offering or sale of Registrable Securities because such Registrable Securities represent an unsold allotment of the Registrable Securities purchased by the Initial Purchasers from the Company, unless the Company has previously done so, the Company will (a) file as soon as practicable after such determination or date, as the case may be, a Shelf Registration Statement providing for the sale by the Holders of all of the Registrable Securities, (b) use its best efforts to have such Shelf Registration Statement declared effective by the SEC and (c) keep the Shelf Registration Statement continuously effective until the second anniversary of the Closing Time or such shorter period which will terminate when all of the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. In the event the Company is required to file a Shelf Registration Statement solely as a result of the matters referred to in clause (iii) of the preceding sentence, the Company shall file and have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement, if required by the rules, 6 7 regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the 1933 Act or by any other rules and regulations thereunder for shelf registration, and the Company agrees to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC. (c) Expenses. The Company shall pay all Registration Expenses in connection with any registration pursuant to Section 2(a) or 2(b) hereof. (d) Effective Registration Statement. An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have been effective during the period of such interference, until the offering of Registrable Securities pursuant to such Registration Statement may legally resume. 3. Participation of Broker-Dealers in Exchange Offer. (a) The SEC staff has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a "Participating Broker-Dealer") may be deemed to be an "underwriter" within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities. The Company understands that it is the SEC staff's position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers and other Persons, if any, subject to similar prospectus delivery requirements to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act. (b) In light of the above, notwithstanding the other provisions of this Agreement, the Company agrees that the provisions of this Agreement as they relate to a Shelf Registration shall also apply to an Exchange Offer Registration to the extent, and with such reasonable modifications thereto as may be, reasonably requested by the Initial Purchasers or by one or more Participating Broker-Dealers, in each case as provided in clause (ii) below, in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the SEC staff recited in Section 3(a) above; provided that: 7 8 (i) the Company shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 5(i), for a period exceeding 90 days after the last Exchange Date (as such period may be extended pursuant to the penultimate paragraph of Section 5 of this Agreement) and Participating Broker-Dealers shall not be authorized by the Company to deliver and shall not deliver such Prospectus after such period in connection with the resales contemplated by this Section 3; and (ii) the application of the Shelf Registration procedures set forth in Section 5 of this Agreement to an Exchange Offer Registration, to the extent not required by the positions of the SEC staff or the Securities Act and the rules and regulations thereunder, will be in conformity with the reasonable request to the Company by the Initial Purchasers or with the reasonable request in writing to the Company by one or more broker-dealers who certify to the Initial Purchasers and the Company in writing that they anticipate that they will be Participating Broker-Dealers; and provided further that, in connection with such application of the Shelf Registration procedures set forth in Section 5 to an Exchange Offer Registration, the Company shall be obligated (x) to deal only with one entity representing the Participating Broker-Dealers, which shall be one of the Initial Purchasers unless they collectively elect not to act as such representative, (y) to pay the fees and expenses of only one counsel representing the Participating Broker-Dealers, which shall be counsel to the Initial Purchasers unless such counsel elects not to so act and (z) to cause to be delivered only one, if any, "cold comfort" letter with respect to the Prospectus in the form existing on the last Exchange Date and with respect to each subsequent amendment or supplement, if any, effected during the period specified in clause (i) above; provided, that the provisions of clauses (y) and (z) of this Section 3(b)(ii) shall apply only if one or more Participating Broker-Dealers holding at least $10,000,000 principal amount of Registrable Securities shall request that the provisions of this Agreement as they relate to a Shelf Registration also apply to an Exchange Offer Registration Statement for the disposition of Exchange Securities by Participating Broker-Dealers. 4. Liquidated Damages. In the event that, for any reason, either (a) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 60th calendar day following the Closing Time or (b) the Exchange Offer is not consummated or a Shelf Registration Statement is not declared effective on or prior to the 180th calendar day following the Closing Time, the interest rate borne by the Securities shall be increased by one-quarter of one percent per annum for the first 30 days following such 60-day period in the case of (a) above, or the first 90 days following such 180-day period in the case of (b) above. Such interest rate will increase by an additional one-quarter of one percent per annum at the beginning of each subsequent 30-day period in the case of (a) above, or 90-day period in the case of (b) above, up to a maximum aggregate increase of one percent per annum. Upon (i) the filing of the Exchange Offer Registration Statement or (ii) the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement, as the case may be, the interest rate borne by the Securities will be reduced to the original interest rate. 8 9 5. Registration Procedures. In connection with the obligations of the Company with respect to the Registration Statement pursuant to Sections 2(a) and 2(b) hereof, the Company shall: (a) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (i) shall be selected by the Company and (ii) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities in accordance with the intended method or methods of distribution as the Company is so advised of by the selling Holders thereof and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include (including through incorporation by reference) all financial statements required by the SEC to be filed therewith, and the Company shall use its best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement as may be necessary to keep such Registration Statement in compliance with the Securities Act; and cause the Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; (c) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities and to each underwriter of Registrable Securities, if any, without charge, as many copies of the Prospectus, including each preliminary prospectus, and any amendment or supplement thereto and such other documents as such Holder or Underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities; (d) in the case of a Shelf Registration, use its best efforts to register or qualify the Registrable Securities under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by such Shelf Registration Statement and or any Underwriter shall reasonably request in writing by the time the applicable Shelf Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder or Underwriter to consummate the disposition in each such designated jurisdiction, provided, however, that the Company shall not be required to (i) qualify generally to do business as a foreign corporation or as a broker-dealer in any jurisdiction where it would not otherwise be required to qualify but for this Section 5(d), (ii) consent to general service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction; (e) in the case of a Shelf Registration, promptly notify each Holder and, if requested by such Holder, confirm such advice in writing (i) when such Shelf Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of such Shelf 9 10 Registration Statement or the initiation of any proceedings for that purpose, (iii) if, between the effective date of such Shelf Registration Statement and the closing of any sale of Registrable Securities covered thereby, the Company receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and (iv) of the happening of any event during the period such Shelf Registration Statement is effective which makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Shelf Registration Statement or Prospectus in order to make the statements therein not misleading; (f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement promptly and shall provide notice to each Holder of the withdrawal of any such order as promptly as practicable; (g) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, without charge, at least one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the selling Holders may reasonably request at least two business days prior to the closing of any sale of Registrable Securities; (i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 5(e)(iv) hereof, use its best efforts to prepare a supplement or post-effective amendment to such Shelf Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (j) in the case of a Shelf Registration Statement, enter into and deliver all such customary agreements, documents and take such other actions (including causing the delivery of opinions of counsel and "comfort" letters of independent certified public accountants) as are reasonably required to expedite or facilitate the disposition of Registrable Securities; (k) in the case of a Shelf Registration, upon reasonable notice make available for inspection by a representative of the Holders of the Registrable Securities, any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and any attorney or accountant designated by the Selling Holders, at reasonable times and in a reasonable manner, all financial and other records, pertinent 10 11 documents and properties of the Company, and cause the respective officers, directors and employees of the Company to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided, however, that such representatives, attorneys or accountants shall be acceptable to the Company in its judgment reasonably exercised and shall agree to enter into a written confidentiality agreement mutually acceptable to the Company and the Underwriters regarding any records, information or documents that are designated by the Company as confidential unless such records, information or documents are available to the public or disclosure of such records, information or documents is required by court or administrative order after the exhaustion of appeals therefrom and to use such information obtained pursuant to this provision only in connection with the transaction for which such information was obtained, and not for any other purpose; (l) in the case of a Shelf Registration, provide copies of any Prospectus, any amendment to any applicable Shelf Registration Statement or amendment or supplement to any Prospectus or any document which is to be incorporated by reference into such Shelf Registration Statement or any Prospectus after initial filing of such Shelf Registration Statement, a reasonable time prior to the filing of any such Prospectus, amendment, supplement or document, to the Initial Purchasers on behalf of the Holders and Underwriters, if any, and except with respect to a Shelf Registration filed pursuant to Section 2(b)(iii) not file any such document in a form to which the Initial Purchasers on behalf of the Holders or Underwriters, if any, shall reasonably object; and make the representatives of the Company as shall be reasonably requested by the Holders or the Initial Purchasers on behalf of such Holders available for discussion of such document; provided that the requirements of this paragraph shall not apply to the Company's annual report on Form 10-K, its Quarterly Reports on Form 10-Q, its current reports on Form 8-K or any other documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (the "Exchange Act Documents"); and further provided that the Company shall promptly notify Holders of the filing of any Exchange Act Documents except for such Exchange Act Documents specifically related to the offering of other securities and not to the Registrable Securities; (m) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of any Registration Statement; and (n) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Securities, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner. In the case of a Shelf Registration Statement, the Company may (as a condition to such Holder's participation in a Shelf Registration) require each Holder to furnish to the 11 12 Company information regarding the Holder and the proposed distribution by such Holder of any Registrable Securities as the Company may from time to time reasonably request in writing. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any (i) notice from the Company of the happening of any event of the kind described in Section 5(e)(ii) or (iv) hereof, (ii) notice from the Company that it is in possession of material information that has not been disclosed to the public and the Company reasonably deems it to be advisable not to disclose such information in a registration statement or (iii) notice from the Company that it is in the process of a registered offering of securities and the Company reasonably deems it to be advisable to temporarily discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement (in each case, such notice being hereinafter referred to as a "Suspension Notice"), such Holder will forthwith discontinue disposition of Registrable Securities pursuant to any Shelf Registration Statement and shall not be entitled to the benefits provided under Section 6 hereof with respect to any sales made by it in contravention of this paragraph, until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(i) or a notice in accordance with Section 5(f) hereof that any order suspending the effectiveness of the Shelf Registration Statement has been withdrawn, or, in the case of (ii) or (iii) above, until further notice from the Company that disposition of Registrable Securities may resume, provided that (except with respect to a Shelf Registration filed pursuant to Section 2(b)(iii)) such further notice will be given within 90 days of the Suspension Notice in the case of (ii) above and within 120 days of the Suspension Notice in the case of (iii) above, and provided further that in the case of (ii) and (iii) above that any Suspension Notice must be based upon a good faith determination of the Board of Directors of the Company or the Executive Committee thereof that such Notice is necessary; and, if so directed by the Company, such Holder will deliver to the Company (at the expense of the Company) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Registrable Securities pursuant to any Shelf Registration Statement, the Company shall extend the period during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions or received notice that any order suspending dispositions of the Securities has been withdrawn. Each Holder will furnish to the Company such information regarding such Holder and the distribution of such Registrable Securities as the Company may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act or any relevant state securities or Blue Sky law or obligation. Each Holder of Registrable Securities as to which any registration is being effected agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to the Company or of the happening of any event, in either case as a result of which any Prospectus relating to such registration contains an untrue statement of a material fact regarding such Holder or the distribution of such Registrable Securities or omits to state any material fact regarding such Holder or the distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and to furnish to the Company 12 13 promptly any additional information required to correct and update any previously furnished information or required such that such prospectus shall not contain, with respect to such holder or the distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 6. Indemnification; Contribution. (a) The Company agrees to indemnify and hold harmless each Holder and each Person, if any, who controls any Holder within the meaning of Section 15 of the Securities Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement (or any amendment thereto) pursuant to which Registrable Securities were registered under the Securities Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including fees and disbursements of counsel chosen by any Holder), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity does not apply to any loss, claim, damage, liability or expense to the extent it arises out of an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Holder expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto). The foregoing indemnity with respect to any untrue statement contained in or any omission from a preliminary prospectus shall not inure to the benefit of any Holder (or any 13 14 Person controlling such Holder) from whom the Person asserting any such loss, liability, claim, damage or expense purchased any of the Securities that are the subject thereof if the Company shall sustain the burden of proving that such Person was not sent or given a copy of the Prospectus (or the Prospectus as amended or supplemented) (in each case exclusive of the documents from which information is incorporated by reference) at or prior to the written confirmation of the sale of such Securities to such Person and the untrue statement contained in or the omission from such preliminary prospectus was corrected in the Prospectus (or the Prospectus as amended or supplemented). (b) Each Holder severally agrees to indemnify and hold harmless the Company, its directors, officers and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 6(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in the Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than under this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction, arising out of the same general allegations or circumstances. (d) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 6 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Holders shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Company and one or more of the Holders; provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. As between the Company and the Holders, such parties shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement in such proportion as shall be appropriate to reflect (i) the relative benefits received by the Company on the one hand and the Holders on the other hand, from the offering of the Exchange Securities or Registrable Securities included in such offering, and (ii) the relative fault of the Company on the one hand and the Holders on the other, with respect to the statements or omissions which resulted in such loss, liability, claim, damage or expense, or action in respect thereof, as well as any other relevant equitable considerations. The Company and the Holders of the Registrable Securities agree that it would not be just and equitable if contribution pursuant to 14 15 this Section 6 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the relevant equitable considerations. For purposes of this Section 6, each Person, if any, who controls a Holder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Holder, and each director of the Company, each officer of the Company who signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company. 7. Selection of Underwriters. The Holders of Registrable Securities covered by the Shelf Registration Statement who desire to do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers (the "Underwriters") that will administer the offering will be selected by the Majority Holders of the Registrable Securities included in such offering; provided that such Underwriters must be reasonably acceptable to the Company. 8. Miscellaneous. (a) No Inconsistent Agreements. The Company has not entered into nor will the Company on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority of the issued and outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure; provided, however, no amendment, modification or supplement, waiver or consent with respect to the provisions of Section 6 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 8(c); (ii) if to the Company, initially at 1111 Stewart Avenue, Bethpage, New York 11714, Attention: General Counsel, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 8(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to any courier guaranteeing overnight delivery. 15 16 Copies of all such notices, demands, or other communications shall be concurrently delivered by the Person giving the same to the Trustee at The Bank of New York, 101 Barclay Street, 21st Floor, New York, New York 10286, Attention: Corporate Trust Department. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. (e) Enforcement by Initial Purchasers. The Initial Purchasers shall have the right to directly enforce the agreements made hereunder between the Company, on the one hand, and the Holders, on the other hand, to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder, provided, however, that such right of direct enforcement shall terminate upon consummation of an Exchange Offer. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 16 17 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CSC HOLDINGS, INC. By: /s/ Andrew Rosengard --------------------------------- Name: Andrew Rosengard Title: Executive Vice President, Finance & Controller 17 18 Confirmed and accepted as of the date first above written: BANC OF AMERICA SECURITIES LLC BEAR, STEARNS & CO. INC. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED CHASE SECURITIES INC. TD SECURITIES (USA) INC. BMO NESBITT BURNS CORP. BNY CAPITAL MARKETS, INC. BARCLAYS CAPITAL INC. CREDIT LYONNAIS SECURITIES (USA) INC. FIRST UNION SECURITIES, INC. FLEET SECURITIES, INC. RBC DOMINION SECURITIES CORPORATION SCOTIA CAPITAL (USA) INC. c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated By: Merrill Lynch, Pierce, Fenner & Smith Incorporated By: /s/ Christopher Norris ----------------------------- Name: Christopher Norris Title: Vice President 18 EX-4.2 4 y48336ex4-2.txt INDENTURE 1 EXHIBIT 4.2 EXECUTION COPY ================================================================================ CSC HOLDINGS, INC., Issuer, to THE BANK OF NEW YORK, Trustee INDENTURE Dated as of March 22, 2001 $1,000,000,000 7-5/8% Senior Notes due 2011 7-5/8% Series B Senior Notes due 2011 ================================================================================ 2 RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF MARCH 22, 2001
TRUST INDENTURE ACT SECTION INDENTURE SECTION " 310(a)(1) .............................................................. 608 (a)(2) .............................................................. 608 (b) .............................................................. 607, 609 " 311(a) .............................................................. 612 (b) .............................................................. 612 " 312(a) .............................................................. 607 (b) .............................................................. 607 (c) .............................................................. 701 " 313 .............................................................. 702 " 314(a) .............................................................. 703 (a)(4) .............................................................. 1013 (c)(1) .............................................................. 103 (c)(2) .............................................................. 103 (e) .............................................................. 103 " 315(b) .............................................................. 601 " 316(a)(last sentence) .............................................................. 101 ("Outstanding") (a)(1)(A) .............................................................. 502, 512 (a)(1)(B) .............................................................. 513 (b) .............................................................. 508 (c) .............................................................. 105(d) " 317(a)(1) .............................................................. 503 (a)(2) .............................................................. 504 (b) .............................................................. 1003 " 318(a) .............................................................. 108
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture. 3
PAGE TABLE OF CONTENTS RECITALS.........................................................................................................1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 1 SECTION 101. DEFINITIONS 1 Acquired Indebtedness 2 Affiliate 2 Agent Members 2 Annualized Operating Cash Flow 2 Average Life 2 Bank Credit Agreement 2 Banks 3 Board of Directors 3 Board Resolution 3 Book-Entry Security 3 Business Day 3 Capital Stock 3 Capitalized Lease Obligation 4 Cash Flow Ratio 4 Commission 4 Common Stock 4 Company 4 Company Request 5 Consolidated Net Tangible Assets 5 Corporate Trust Office 5 corporation 5 Cumulative Cash Flow Credit 5 Cumulative Interest Expense 6 Debt 6 Default 6 Depository 6 Disqualified Stock 6 Event of Default 6 Exchange Act 6 Exchange Offer 6 Exchange Offer Registration Statement 6 Exchange Securities 6
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PAGE generally accepted accounting principles 7 Global Security 7 guarantee 7 Holder 7 Indebtedness 7 Indenture 7 Initial Purchasers 7 Initial Securities 8 Interest Payment Date 8 Interest Swap Obligations 8 Investment 8 Lease 8 Lien 8 Mandatorily Redeemable Preferred Stock 9 Maturity 9 Officers' Certificate 9 Operating Cash Flow 9 Opinion of Counsel 9 Outstanding 9 Paying Agent 10 Permitted Liens 10 Person 12 Physical Security 12 Predecessor Security 13 Preferred Stock 13 Qualified Institutional Buyer 13 Receivables and Related Assets 13 Refinancing Indebtedness 13 Registered Securities 13 Registration Rights Agreement 13 Regular Record Date 13 Regulation S Global Security 14 Responsible Officer 14 Restricted Payment 14 Restricted Security 15 Restricted Subsidiary 15 Rule 144A Global Security 15 Securities Act 15 Securities Issue Date 15 Securitization Subsidiary 15 Security 16
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PAGE Security Register 16 Senior Indebtedness 16 Shelf Registration Statement 16 Special Record Date 16 Stated Maturity 16 Stock Payment 16 subsidiary 17 Subsidiary 17 Trust Indenture Act 17 Trustee 17 Unrestricted Subsidiary 17 Voting Stock 17 SECTION 102. OTHER DEFINITIONS. 18 SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS 18 SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE 19 SECTION 105. ACTS OF HOLDERS 19 SECTION 106. NOTICES, ETC. TO TRUSTEE AND COMPANY 21 SECTION 107. NOTICE TO HOLDERS; WAIVER 21 SECTION 108. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT 21 SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS 22 SECTION 110. SUCCESSORS AND ASSIGNS 22 SECTION 111. SEPARABILITY CLAUSE 22 SECTION 112. BENEFITS OF INDENTURE 22 SECTION 113. GOVERNING LAW 22 SECTION 114. LEGAL HOLIDAYS 22 SECTION 115. NO RECOURSE AGAINST OTHERS 23 ARTICLE TWO SECURITY FORMS 23 SECTION 201. FORMS GENERALLY; INCORPORATION OF FORM IN INDENTURE 23 SECTION 202. FORM OF FACE OF SECURITY 23 SECTION 203. FORM OF REVERSE OF SECURITY 27 SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION 31 SECTION 205. FORM OF LEGEND ON RESTRICTED SECURITIES 31 SECTION 206. FORM OF LEGEND FOR BOOK-ENTRY SECURITIES 34 ARTICLE THREE THE SECURITIES 35 SECTION 301. TITLE AND TERMS 35 SECTION 302. DENOMINATIONS 36 SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING 36 SECTION 304. TEMPORARY SECURITIES 37 SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE 38 SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES 39
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PAGE SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED 40 SECTION 308. PERSONS DEEMED OWNERS 41 SECTION 309. CANCELLATION 41 SECTION 310. COMPUTATION OF INTEREST 42 SECTION 311. REGISTRATION RIGHTS OF HOLDERS OF INITIAL SECURITIES 42 SECTION 312. CUSIP NUMBERS 42 SECTION 313. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES 42 SECTION 314. SPECIAL TRANSFER PROVISIONS 44 ARTICLE FOUR SATISFACTION AND DISCHARGE 46 SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE 46 SECTION 402. APPLICATION OF TRUST MONEY 48 ARTICLE FIVE REMEDIES 48 SECTION 501. EVENTS OF DEFAULT 48 SECTION 502. ACCELERATION OF MATURITY; RESCISSION 50 SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE 51 SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM 52 SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES 52 SECTION 506. APPLICATION OF MONEY COLLECTED 53 SECTION 507. LIMITATION ON SUITS 53 SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST 54 SECTION 509. RESTORATION OF RIGHTS AND REMEDIES 54 SECTION 510. RIGHTS AND REMEDIES CUMULATIVE 54 SECTION 511. DELAY OR OMISSION NOT WAIVER 54 SECTION 512. CONTROL BY HOLDERS 55 SECTION 513. WAIVER OF PAST DEFAULTS 55 SECTION 514. UNDERTAKING FOR COSTS 55 SECTION 515. WAIVER OF STAY, EXTENSION OR USURY LAWS 56 ARTICLE SIX THE TRUSTEE 56 SECTION 601. NOTICE OF DEFAULTS 56 SECTION 602. CERTAIN RIGHTS OF TRUSTEE 57 SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES 58 SECTION 604. MAY HOLD SECURITIES 58 SECTION 605. MONEY HELD IN TRUST 58 SECTION 606. COMPENSATION AND REIMBURSEMENT 58 SECTION 607. CONFLICTING INTERESTS 59 SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY 60 SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR 60 SECTION 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR 62 SECTION 611. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS 62 SECTION 612. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY 62
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PAGE SECTION 613. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY 62 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY 63 SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS 63 SECTION 702. REPORTS BY TRUSTEE 63 SECTION 703. REPORTS BY COMPANY 63 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE 64 SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS 64 SECTION 802. SUCCESSOR SUBSTITUTED 65 ARTICLE NINE SUPPLEMENTAL INDENTURES 66 SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS 66 SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS 66 SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES 67 SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES 67 SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT 68 SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES 68 ARTICLE TEN COVENANTS 68 SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST 68 SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY 68 SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST 69 SECTION 1004. CORPORATE EXISTENCE 70 SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS 70 SECTION 1006. MAINTENANCE OF PROPERTIES 70 SECTION 1007. LIMITATION ON INDEBTEDNESS. 71 SECTION 1008. LIMITATION ON LIENS 71 SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS 71 SECTION 1010. LIMITATION ON INVESTMENTS IN UNRESTRICTED SUBSIDIARIES AND AFFILIATES 73 SECTION 1011. TRANSACTIONS WITH AFFILIATES 73 SECTION 1012. PROVISION OF FINANCIAL STATEMENTS 73 SECTION 1013. STATEMENT AS TO COMPLIANCE 74 SECTION 1014. WAIVER OF CERTAIN COVENANTS 74 SECTION 1015. STATEMENT BY OFFICERS AS TO DEFAULT 74 ARTICLE ELEVEN REDEMPTION OF SECURITIES 75 SECTION 1101. NO RIGHT OF REDEMPTION 75 ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE 75 SECTION 1201. OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE 75 SECTION 1202. DEFEASANCE AND DISCHARGE 75 SECTION 1203. COVENANT DEFEASANCE 76 SECTION 1204. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE 76
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PAGE SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS 78 SECTION 1206. REINSTATEMENT 79 TESTIMONIUM......................................................................................................81 SIGNATURES AND SEALS.............................................................................................81 ACKNOWLEDGMENTS..................................................................................................81 EXHIBIT A List of Restricted Subsidiaries EXHIBIT B Form of Registration Rights Agreement
9 INDENTURE dated as of March 22, 2001 between CSC Holdings, Inc., a Delaware corporation (hereinafter called the "Company"), and The Bank of New York, a New York banking corporation, trustee (hereinafter called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the creation of an issue of its 7 5/8% Senior Notes due 2011 (hereinafter called the "Initial Securities") and its 7 5/8% Series B Senior Notes due 2011 (the "Exchange Securities," and together with the Initial Securities, the "Securities"), of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture; Upon the issuance of the Exchange Securities, if any, or the effectiveness of the Exchange Offer Registration Statement (as defined herein) or, under certain circumstances, the effectiveness of the Shelf Registration Statement (as defined herein), this Indenture will be subject to, and shall be governed by, the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall to the extent applicable be governed by such provisions. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and 10 2 except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as were generally accepted in the United States as of August 21, 1997; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Acquired Indebtedness" means Indebtedness of a Person (a) existing at the time such Person is merged with or into the Company or a Subsidiary or becomes a Subsidiary or (b) assumed in connection with the acquisition of assets from such Person. "Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Members" shall have the meaning set forth in Section 313. "Annualized Operating Cash Flow" means, for any period of three complete consecutive calendar months, an amount equal to Operating Cash Flow for such period multiplied by four. "Average Life" means, at any date of determination with respect to any debt security, the quotient obtained by dividing (a) the sum of the products of (i) the number of years from such date of determination to the dates of each successive scheduled principal payment of such debt security and (ii) the amount of such principal payment by (b) the sum of all such principal payments. "Bank Credit Agreement" means the Sixth Amended and Restated Credit Agreement, dated as of May 28, 1998, among the Company, the Restricted Subsidiaries party thereto, the banks party thereto, Toronto Dominion (Texas), Inc., as Arranging Agent and as Administrative Agent, The Bank of New York, The Bank of Nova Scotia, The Canadian Imperial Bank of Commerce, NationsBank, N.A. and The Chase Manhattan Bank, as Managing Agents, Bank of Montreal, Chicago Branch, Barclays Bank plc, Fleet Bank, N.A. and Royal Bank of Canada, as Agents, Banque Paribas, Credit Lyonnais, BankBoston N.A., The First National Bank of Chicago, Mellon Bank, N.A. and Societe Generale, New York Branch, as Co-Agents, and The Canadian Imperial Bank of Commerce, The Chase Manhattan 11 3 Bank and NationsBank, N.A., as Co-Syndication Agents and the First Amended and Restated Credit Agreement, dated as of May 28, 1998, by and among Cablevision MFR, Inc., the Guarantors party thereto, the Lenders from time to time party thereto and Toronto Dominion Bank (Texas), Inc., as Arranging Agent and as Administrative Agent, The Bank of New York, The Bank of Nova Scotia, The Canadian Imperial Bank of Commerce, NationsBank, N.A. and The Chase Manhattan Bank, as Managing Agents, Bank of Montreal, Chicago Branch, Barclays Bank plc, Fleet Bank, N.A. and Royal Bank of Canada, as Agents, Banque Paribas, Credit Lyonnais, BankBoston N.A., The First National Bank of Chicago, Mellon Bank, N.A. and Societe Generale, New York Branch, as Co-Agents, and the Bank of New York and the Bank of Nova Scotia, as Co-Syndication Agents, both agreements as in effect on the date hereof and as such agreements may be amended or replaced from time to time. "Banks" means the lenders from time to time who are parties to the Bank Credit Agreement. "Board of Directors" means the board of directors of the Company or any duly authorized committee of such board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee. "Book-Entry Security" means a Security represented by a Global Security and registered in the name of the nominee of the Depository. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to close. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person's capital stock whether now outstanding or issued after the date of this Indenture, including, without limitation, all Common Stock, Preferred Stock and Disqualified Stock. "Capitalized Lease Obligation" means any obligation of a Person to pay rent or other amounts under a lease with respect to any property (whether real, personal or mixed) acquired or leased by such Person and used in its business that is required to be accounted for as a liability on the balance sheet of such Person in accordance with generally accepted accounting principles and the amount of such Capitalized Lease Obligation shall be the amount so required to be accounted for as a liability. 12 4 "Cash Flow Ratio" means, as at any date, the ratio of (a) the sum of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries determined on a consolidated basis but excluding all Interest Swap Obligations entered into by the Company or any Restricted Subsidiary and one of the Banks outstanding on such date plus (but without duplication of Indebtedness supported by letters of credit) the aggregate undrawn face amount of all letters of credit outstanding on such date to (b) Annualized Operating Cash Flow determined as at the last day of the most recent month for which financial information is available. "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 Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Stock" means, with respect to any Person, any and all shares, interests and participations (however designated and whether voting or non-voting) in such Person's common equity, whether now Outstanding or issued after the date of this Indenture, and includes, without limitation, all series and classes of such common stock. "Company" means the Person named as the "Company" in the first paragraph of this instrument, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. To the extent necessary to comply with the requirements of the provisions of Trust Indenture Act Sections 310 through 317 as they are applicable to the Company, the term "Company" shall include any other obligor with respect to the Securities for the purposes of complying with such provisions. "Company Request" or "Company Order" means a written request or order signed in the name of the Company (a) by its Chairman, Chief Executive Officer, a Vice Chairman, its President or a Vice President and (b) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers or directors listed in clause (a) above in lieu of being signed by one of such officers or directors listed in such clause (a) and one of the officers listed in clause (b) above. "Consolidated Net Tangible Assets" of any Person means, as of any date, (a) all amounts that would be shown as assets on a consolidated balance sheet of such Person and its Restricted Subsidiaries prepared in accordance with generally accepted accounting principles, less (b) the amount thereof constituting goodwill and other intangible assets as calculated in accordance with generally accepted accounting principles. 13 5 "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 101 Barclay Street, 21st Floor, New York, New York 10286. "corporation" includes corporations, associations, partnerships, limited liability companies, companies and business trusts. "Cumulative Cash Flow Credit" means the sum of: (a) cumulative Operating Cash Flow during the period commencing on July 1, 1988 and ending on the last day of the most recent month preceding the date of the proposed Restricted Payment for which financial information is available or, if cumulative Operating Cash Flow for such period is negative, minus the amount by which cumulative Operating Cash Flow is less than zero, plus (b) the aggregate net proceeds received by the Company from the issuance or sale (other than to a Restricted Subsidiary) of its Capital Stock (other than Disqualified Stock) on or after January 1, 1992, plus (c) the aggregate net proceeds received by the Company from the issuance or sale (other than to a Restricted Subsidiary) of its Capital Stock (other than Disqualified Stock) on or after January 1, 1992, upon the conversion of, or exchange for, Indebtedness of the Company or any Restricted Subsidiary or from the exercise of any options, warrants or other rights to acquire Capital Stock of the Company. For purposes of this definition, the net proceeds in property other than cash received by the Company as contemplated by clauses (b) and (c) above shall be valued at the fair market value of such property (as determined by the Board of Directors, whose good faith determination shall be conclusive) at the date of receipt by the Company. "Cumulative Interest Expense" means, for the period commencing on July 1, 1988 and ending on the last day of the most recent month preceding the proposed Restricted Payment for which financial information is available, the aggregate of the interest expense of the Company and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with generally accepted accounting principles, including interest expense attributable to Capitalized Lease Obligations. "Debt" with respect to any Person means, without duplication, any liability, whether or not contingent, (a) in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereto), but excluding reimbursement obligations under any surety bond, (b) representing the 14 6 balance deferred and unpaid of the purchase price of any property (including pursuant to Capitalized Lease Obligations), except any such balance that constitutes a trade payable, (c) under Interest Swap Agreements (as defined in the Bank Credit Agreement) entered into pursuant to the Bank Credit Agreement, (d) under any other agreement related to the fixing of interest rates on any Indebtedness, such as an interest swap, cap or collar agreement (if and to the extent any of the foregoing liabilities would appear as a liability upon a balance sheet of such Person prepared on a consolidated basis in accordance with generally accepted accounting principles) or (e) guarantees of items of other Persons which would be included within this definition for such other Persons (whether or not the guarantee would appear on such balance sheet). "Debt" does not include (a) Disqualified Stock, (b) any liability for federal, state or other taxes owed or owing by such person or (c) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities). "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Depository" means, with respect to the Securities issued in the form of one or more Book-Entry Securities, The Depository Trust Company or another Person designated as Depository by the Company, which must be a clearing agency registered under the Exchange Act. "Disqualified Stock" means any Capital Stock of the Company or any Restricted Subsidiary which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Securities. "Event of Default" has the meaning specified in Article Five. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Offer" means the offer by the Company to the Holders of the Initial Securities to exchange all of the Initial Securities for Exchange Securities, as provided for in the Registration Rights Agreement. "Exchange Offer Registration Statement" means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement. "Exchange Securities" has the meaning stated in the first recital of this Indenture and refers to any Exchange Securities containing terms substantially identical to the Initial Securities (except that (a) such Exchange Securities shall not contain terms with respect to 15 7 transfer restrictions and shall be registered under the Securities Act, and (b) certain provisions relating to an increase in the stated rate of interest thereon shall be eliminated) that are issued and exchanged for the Initial Securities in accordance with the Exchange Offer, as provided for in the Registration Rights Agreement and this Indenture. "generally accepted accounting principles" or "GAAP" means generally accepted accounting principles in the United States, consistently applied, which were in effect as of August 15, 1997. "Global Security" means one or more Securities evidencing all or a part of the Securities to be issued as Book-Entry Securities, issued to the Depository in accordance with Section 303 and bearing the legend prescribed in Section 206 and, in the case of a Restricted Security, the legend prescribed in Section 205. "guarantee" means, as applied to any obligation, (a) a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of such obligation or (b) an agreement, direct or indirect, contingent or otherwise, providing assurance of the payment or performance (or payment of damages in the event of non-performance) of any part or all of such obligation, including, without limiting the foregoing, the payment of amounts drawn down by letters of credit. Notwithstanding anything herein to the contrary, a guarantee shall not include any agreement solely because such agreement creates a Lien on the assets of any Person. The amount of a guarantee shall be deemed to be the maximum amount of the obligation guaranteed for which the guarantor could be held liable under such guarantee. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indebtedness" with respect to any Person, means the Debt of such Person; provided that, for purposes of the definition of "Indebtedness" (including the term "Debt" to the extent incorporated in such definition) and for purposes of the definition of Event of Default, the term "guarantee" shall not be interpreted to extend to a guarantee under which recourse is limited to the Capital Stock of an entity that is not a Restricted Subsidiary. "Indenture" means this instrument as originally executed (including all exhibits and schedules hereto) and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Initial Purchasers" means Banc of America Securities LLC, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., TD Securities (USA) Inc., BMO Nesbitt Burns Corp., BNY Capital Markets, Inc., Barclays 16 8 Capital Inc., Credit Lyonnais Securities (USA) Inc., First Union Securities, Inc., Fleet Securities, Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc. "Initial Securities" has the meaning specified in the recitals to this Indenture. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities. "Interest Swap Obligations" means, with respect to any Person, the obligations of such Person pursuant to any arrangement with any other Person whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such Person calculated by applying a fixed or a floating rate of interest on the same notional amount. "Investment" means any advance, loan, account receivable (other than an account receivable arising in the ordinary course of business) or other extension of credit (excluding, however, accrued and unpaid interest in respect of any advance, loan or other extension of credit) or any capital contribution to (by means of transfers of property to others, or payments for property or services for the account or use of others, or otherwise), any purchase or ownership of any stocks, bonds, notes, debentures or other securities (including, without limitation, any interests in any partnership, joint venture or joint adventure) of, or any bank accounts with or guarantee of any Indebtedness or other obligations of, any Unrestricted Subsidiary or Affiliate that is not a Subsidiary; provided that (a) the term "Investment" shall not include any transaction that would otherwise constitute an Investment of the Company or a Subsidiary to the extent that the consideration provided by the Company or such Subsidiary in connection therewith shall consist of Capital Stock of the Company (other than Disqualified Stock) and (b) the term "guarantee" shall not be interpreted to extend to a guarantee under which recourse is limited to the Capital Stock of an entity that is not a Restricted Subsidiary. "Lease" means any capital lease, operating lease, equipment lease, real property lease or other lease. "Lien" means any lien, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature of a security interest and any agreement to give any security interest). A Person shall be deemed to own subject to a Lien any property which such Person has acquired or holds subject to the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement. 17 9 "Mandatorily Redeemable Preferred Stock" means the Company's Series H Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable Preferred Stock and any series of preferred stock of the Company issued in exchange for, or the proceeds of which are used to repurchase, redeem, defease or otherwise acquire, all or any portion of the Series H Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable Preferred Stock or any other Mandatorily Redeemable Preferred Stock. "Maturity" when used with respect to any Security means the date on which the principal of such Security becomes due and payable as therein or herein provided whether at the Stated Maturity, by declaration of acceleration or otherwise. "Officers' Certificate" means a certificate signed by (a) the Chairman, Chief Executive Officer, a Vice Chairman, the President, a Vice President or the Treasurer of the Company and (b) the Secretary or an Assistant Secretary of the Company and delivered to the Trustee; provided, however, that such certificate may be signed by two of the officers or directors listed in clause (a) above in lieu of being signed by one of such officers or directors listed in such clause (a) and one of the officers listed in clause (b) above. "Operating Cash Flow" means, for any period, the sum of the following for the Company and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with generally accepted accounting principles (except for the amortization of deferred installation income which shall be excluded from the calculation of Operating Cash Flow for all purposes of this Indenture): (a) aggregate operating revenues minus (b) aggregate operating expenses (including technical, programming, sales, selling, general and administrative expenses and salaries and other compensation, net of amounts allocated to Affiliates, paid to any general partner, director, officer or employee of the Company or any Restricted Subsidiary, but excluding interest, depreciation and amortization and the amount of non-cash compensation in respect of the Company's employee incentive stock programs for such period (not to exceed in the aggregate for any calendar year 7% of the Operating Cash Flow for the previous calendar year) and, to the extent otherwise included in operating expenses, any losses resulting from a writeoff or writedown of Investments by the Company or any Restricted Subsidiary in Affiliates). For purposes of determining Operating Cash Flow, there shall be excluded all management fees until actually paid to the Company or any Restricted Subsidiary in cash. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company. Each such opinion shall include the statements provided for in Trust Indenture Act section 314 to the extent applicable. "Outstanding" when used with respect to Securities means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: 18 10 (a) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for whose payment or purchase money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; (c) Securities, except to the extent provided in Sections 1202 and 1203, with respect to which the Company has effected defeasance and/or covenant defeasance as provided in Article Twelve; and (d) Securities paid pursuant to Section 306, Securities in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands the Securities are valid obligations of the Company; provided, however, that, in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, direction, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities, or any Affiliate of the Company, or such other obligor, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, direction, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company. "Permitted Liens" means the following types of Liens: (a) Liens existing on the date of this Indenture; (b) Liens on shares of the Capital Stock of an entity that is not a Restricted Subsidiary, which Liens solely secure a guarantee by the Company or a Restricted Subsidiary, or both, of Indebtedness of such entity; (c) Liens on Receivables and Related Assets (and proceeds thereof) securing only Indebtedness otherwise permitted to be incurred by a Securitization Subsidiary; 19 11 (d) Liens on shares of the Capital Stock of a Subsidiary securing Indebtedness under the Bank Credit Agreement or any renewal or replacement of the Bank Credit Agreement; (e) Liens granted in favor of the Company or any Restricted Subsidiary; (f) Liens securing the Securities; (g) Liens securing Acquired Indebtedness created prior to (and not in connection with or in contemplation of) the incurrence of such Indebtedness by the Company or a Restricted Subsidiary; provided that such Lien does not extend to any property or assets of the Company or any Restricted Subsidiary other than the assets acquired in connection with the incurrence of such Acquired Indebtedness; (h) Liens securing Interest Swap Obligations or "margin stock", as defined in Regulations G and U of the Board of Governors of the Federal Reserve System; (i) statutory Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other like Liens arising in the ordinary course of business of the Company or any Restricted Subsidiary and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings; (j) Liens for taxes, assessments, government charges or claims not yet due or that are being contested in good faith by appropriate proceedings; (k) zoning restrictions, easements, rights-of-way, restrictions and other similar charges or encumbrances or minor defects in title not interfering in any material respect with the business of the Company or any of its Restricted Subsidiaries; (l) Liens arising by reason of any judgment, decree or order of any court, arbitral tribunal or similar entity so long as any appropriate legal proceedings that may have been initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (m) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security or similar legislation; (n) Liens securing the performance of bids, tenders, Leases, contracts, franchises, public or statutory obligations, surety, stay or appeal bonds, or other similar obligations arising in the ordinary course of business; 20 12 (o) Leases under which the Company or any Restricted Subsidiary is the lessee or the lessor; (p) purchase money mortgages or other purchase money liens (including without limitation any Capitalized Lease Obligations) upon any fixed or capital assets acquired after the date of this Indenture, or purchase money mortgages (including without limitation Capitalized Lease Obligations) on any such assets hereafter acquired or existing at the time of acquisition of such assets, whether or not assumed, so long as (i) such mortgage or lien does not extend to or cover any other asset of the Company or any Restricted Subsidiary and (ii) such mortgage or lien secures the obligation to pay the purchase price of such asset, interest thereon and other charges incurred in connection therewith (or the obligation under such Capitalized Lease Obligation) only; (q) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof; (r) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off; (s) Liens to secure other Indebtedness; provided, however, that the principal amount of any Indebtedness secured by such Liens, together with the principal amount of any Indebtedness refinancing any Indebtedness incurred under this clause (s) as permitted by clause (t) below (and successive refinancings thereof), may not exceed 15% of the Company's Consolidated Net Tangible Assets as of the last day of the Company's most recently completed fiscal year for which financial information is available; and (t) any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (a) through (s); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, renewed or replaced and shall not extend to any additional property or assets. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Physical Security" shall have the meaning set forth in Section 303. 21 13 "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for a mutilated security or in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Security. "Preferred Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person's preferred or preference stock, whether now Outstanding or issued after the date of this Indenture, and includes, without limitation, all classes and series of preferred or preference stock. "Qualified Institutional Buyer" or "QIB" shall have the meaning specified in Rule 144A under the Securities Act. "Receivables and Related Assets" means (a) accounts receivable, instruments, chattel paper, obligations, general intangibles, equipment and other similar assets, including interests in merchandise or goods, the sale or Lease of which gives rise to the foregoing, related contractual rights, guarantees, insurance proceeds, collections and other related assets, (b) equipment, (c) inventory and (d) proceeds of all of the foregoing. "Refinancing Indebtedness" means, with respect to any series of Securities, Indebtedness of the Company incurred to redeem, repurchase, defease or otherwise acquire or retire for value other Indebtedness that is subordinate in right of payment to such Securities, so long as any such new Indebtedness (a) is made subordinate to such Securities at least to the same extent as the Indebtedness being refinanced and (b) does not have (i) an Average Life less than the Average Life of the Indebtedness being refinanced, (ii) a final scheduled maturity earlier than the final scheduled maturity of the Indebtedness being refinanced, or (iii) permit redemption at the option of the holder earlier than the earlier of (A) the final scheduled maturity of the Indebtedness being refinanced or (B) any date of redemption at the option of the holder of the Indebtedness being refinanced. "Registered Securities" means Securities issued or sold in a transaction pursuant to an effective registration statement under the Securities Act of 1933, as amended, as contemplated in the Registration Rights Agreement, and any Exchange Security subsequently issued in exchange for or upon transfer of any such Security. "Registration Rights Agreement" means the Registration Rights Agreement dated March 22, 2001 among the Company and the Initial Purchasers, a form of which Registration Rights Agreement is attached hereto as Exhibit B. "Regular Record Date" for the interest payable on any Interest Payment Date means the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 22 14 "Regulation S Global Security" shall have the meaning set forth in Section 303. "Responsible Officer", when used with respect to the Trustee, means any vice president, any assistant secretary, any assistant treasurer, any trust officer or assistant trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers or assigned by the Trustee to administer corporate trust matters at its Corporate Trust Office and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Payment" means (a) any Stock Payment by the Company or a Restricted Subsidiary; (b) any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value, or permit any Restricted Subsidiary to redeem, purchase, defease or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company that is subordinate in right of payment to such Securities; provided, however, that any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value, or permit any Restricted Subsidiary to redeem, purchase, defease or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness that is subordinate in right of payment to such Securities shall not be a Restricted Payment if either (i) after giving effect thereto, the ratio of the Senior Indebtedness of the Company and the Restricted Subsidiaries to Annualized Operating Cash Flow determined as of the last day of the most recent month for which financial information is available is less than or equal to 5 to 1 or (ii) such subordinate Indebtedness is redeemed, purchased, defeased or otherwise acquired or retired in exchange for, or out of (x) the proceeds of a sale (within one year before or 180 days after such redemption, purchase, defeasance, acquisition or retirement) of, Refinancing Indebtedness, or Capital Stock of the Company or warrants, rights or options to acquire Capital Stock of the Company or (y) any source of funds other than the incurrence of Indebtedness; (c) any direct or indirect payment to redeem, purchase, defease or otherwise acquire or retire for value any Disqualified Stock at its mandatory redemption date or other maturity date if and to the extent that Indebtedness is incurred to finance such redemption, purchase, defeasance or other acquisition or retirement; provided, however, that the redemption, purchase, defeasance or other acquisition or retirement of Mandatorily Redeemable Preferred Stock at its mandatory redemption or other maturity date shall not be a Restricted Payment if and to the extent any Indebtedness incurred to finance all or a portion of the purchase or redemption price does not have a 23 15 final scheduled maturity date, or permit redemption at the option of the holder thereof, earlier than the final scheduled maturity of such Securities. Notwithstanding the foregoing, Restricted Payments shall not include (a) payments by any Restricted Subsidiary to the Company or any other Restricted Subsidiary or (b) any Investment or designation of a Restricted Subsidiary as an Unrestricted Subsidiary permitted under Section 1010. "Restricted Security" shall have the meaning set forth in Section 205. "Restricted Subsidiary" means any Subsidiary, whether existing on the date hereof or created subsequent hereto, designated from time to time by the Company as a "Restricted Subsidiary" and the initial Restricted Subsidiaries designated by the Company are set forth on Exhibit A; provided, however, that no Subsidiary that is not a Securitization Subsidiary can be or remain so designated unless (a) at least 67% of each of the total equity interest and the voting control of such Subsidiary is owned, directly or indirectly, by the Company or another Restricted Subsidiary and (b) such Subsidiary is not restricted, pursuant to the terms of any loan agreement, note, indenture or other evidence of indebtedness, from (i) paying dividends or making any distribution on such Subsidiary's Capital Stock or other equity securities or paying any Indebtedness owed to the Company or to any Restricted Subsidiary, (ii) making any loans or advances to the Company or any Restricted Subsidiary or (iii) transferring any of its properties or assets to the Company or any Restricted Subsidiary (it being understood that a financial covenant any of the components of which are directly impacted by the taking of the action (e.g., the payment of a dividend) itself (such as a minimum net worth test) would be deemed to be a restriction on the foregoing actions, while a financial covenant none of the components of which is directly impacted by the taking of the action (e.g., the payment of a dividend) itself (such as a debt to cash flow test) would not be deemed to be a restriction on the foregoing actions); and provided further that the Company may, from time to time, redesignate any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 1010. "Rule 144A Global Security" shall have the meaning set forth in Section 303. "Securities Act" means the Securities Act of 1933, as amended. "Securities Issue Date" means March 22, 2001 with respect to the Initial Securities and the date of original issuance of the Exchange Securities with respect to the Exchange Securities. "Securitization Subsidiary" means a Restricted Subsidiary that is established for the limited purpose of acquiring and financing Receivables and Related Assets and engaging in activities ancillary thereto; provided that (a) no portion of the Indebtedness of a Securitization Subsidiary is guaranteed by or is recourse to the Company or any other Restricted Subsidiary 24 16 (other than recourse for customary representations, warranties, covenants and indemnities, none of which shall relate to the collectibility of the Receivables and Related Assets) and (b) none of the Company or any other Restricted Subsidiary has any obligation to maintain or preserve such Securitization Subsidiary's financial condition. "Security" and "Securities" have the meaning set forth in the second paragraph of this Indenture, such terms to include both the Initial Securities and the Exchange Securities. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness" means, with respect to any Person, all principal of (premium, if any) and interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not a claim for post filing interest is allowed in such proceedings) with respect to all Indebtedness of such Person; provided that Senior Indebtedness shall not include (a) any Indebtedness of such Person that, by its terms or the terms of the instrument creating or evidencing such Indebtedness, is expressly subordinate in right of payment to the Securities, (b) any guarantee of Indebtedness of any subsidiary of such Person if recourse against such guarantee is limited to the Capital Stock or other equity interests of such subsidiary, (c) any obligation of such Person to any subsidiary of such Person or, in the case of a Restricted Subsidiary, to the Company or any other Subsidiary or (d) any Indebtedness of such Person (and any accrued and unpaid interest in respect thereof) which is subordinate or junior in any respect to any other Indebtedness or other obligation of such Person. "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "Special Record Date" means a date fixed by the Trustee for the payment of any Defaulted Interest pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. "Stock Payment" means, with respect to any Person, the payment or declaration of any dividend, either in cash or in property (except dividends payable in Common Stock or common shares of Capital Stock of such Person), or the making by such Person of any other distribution, on account of any shares of any class of its Capital Stock, now or hereafter outstanding, or the redemption, purchase, retirement or other acquisition or retirement for value by such Person, directly or indirectly, of any shares of any class of its Capital Stock, 25 17 now or hereafter outstanding, other than the redemption, purchase, defeasance or other acquisition or retirement for value of any Disqualified Stock at its mandatory redemption date or other maturity date. "subsidiary" means, as to a particular parent entity at any time, any entity of which more than 50% of the outstanding Voting Stock or other equity interest entitled ordinarily to vote in the election of the directors or other governing body (however designated) of such entity is at the time beneficially owned or controlled directly or indirectly by such parent corporation, by one or more such entities or by such parent corporation and one or more such entities. "Subsidiary" means any subsidiary of the Company. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, and as in force at the date as of which this instrument was executed, except as provided in Section 905; provided, however, that, in the event that the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "Unrestricted Subsidiary" means any Subsidiary which is not a Restricted Subsidiary. "Voting Stock" means any Capital Stock having voting power under ordinary circumstances to vote in the election of a majority of the directors of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). 26 18 SECTION 102. OTHER DEFINITIONS. DEFINED TERM IN SECTION "Act"................................................. 105 "Bankruptcy Law"...................................... 501 "covenant defeasance"................................. 1203 "Custodian"........................................... 501 "defeasance".......................................... 1202 "Defaulted Interest".................................. 307 "incorporated provision".............................. 108 "redesignation of a Restricted Subsidiary"............ 1010 "Restricted Security"................................. 205 "Security Register"................................... 305 "Security Registrar".................................. 305 "successor"........................................... 801 "U.S. Government Obligations"......................... 1204 SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion (other than the certificates required by Section 1013) with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; 27 19 (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 105. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. 28 20 Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Trust Indenture Act Section 315) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 105. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of such Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding Trust Indenture Act Section 316(c), any such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not more than 30 days prior to the first solicitation of Holders generally in connection therewith and no later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Securities then Outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Securities then Outstanding shall be computed as of such record date; provided that no such request, demand, authorization, direction, notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Security shall bind every future Holder of the same Security or the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to be done by the Trustee, any Paying Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. 29 21 SECTION 106. NOTICES, ETC. TO TRUSTEE AND COMPANY. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (a) the Trustee by any Holder, the agents of the Banks or the Company shall be sufficient for every purpose hereunder if made, given, furnished or delivered, in writing (which may be via facsimile), to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Trustee Administration; or (b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing to the Company addressed to it c/o CSC Holdings, Inc., 1111 Stewart Avenue, Bethpage, New York 11714, Attention: Secretary, or at any other address previously furnished in writing to the Trustee by the Company. SECTION 107. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice when mailed to a Holder in the aforesaid manner shall be conclusively deemed to have been received by such Holder whether or not actually received by such Holder. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event as required by any provision of this Indenture, then any method of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. SECTION 108. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT. If and to the extent that any provision of this Indenture limits, qualifies or 30 22 conflicts with the duties imposed by Trust Indenture Act Sections 310 to 318, inclusive, or conflicts with any provision (an "incorporated provision") required by or deemed to be included in this Indenture by operation of such Trust Indenture Act Sections, such imposed duties or incorporated provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be. SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 110. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company shall bind its respective successors and assigns, whether so expressed or not. SECTION 111. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 112. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person (other than the parties hereto and their successors hereunder, any Paying Agent and the Holders) any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 113. GOVERNING LAW. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles. This Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. SECTION 114. LEGAL HOLIDAYS. In any case where any Interest Payment Date, any date established for payment of Defaulted Interest pursuant to Section 307, or any Maturity with respect to any Security 31 23 shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, or date established for payment of Defaulted Interest pursuant to Section 307, or Maturity, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date, or date established for payment of Defaulted Interest pursuant to Section 307, or Maturity, as the case may be, to the next succeeding Business Day. SECTION 115. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting any of the Securities waives and releases all such liability. ARTICLE TWO SECURITY FORMS SECTION 201. FORMS GENERALLY; INCORPORATION OF FORM IN INDENTURE. The Securities and the Trustee's certificate of authentication with respect thereto shall be in substantially the forms set forth in this Article, with such appropriate legends, insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. Any portion of the text of any Security may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Security. Each Security shall be dated the date of its authentication. The definitive Securities shall be typewritten, printed, lithographed, engraved or otherwise produced or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. SECTION 202. FORM OF FACE OF SECURITY. 32 24 CSC HOLDINGS, INC. 7 5/8% [Series B]* Senior Notes due 2011 No._____________ $___________________ CUSIP No. _____________ CSC Holdings, Inc., a Delaware corporation (herein called the "Company", which term includes any successor entity under this Indenture hereinafter referred to), for value received, hereby promises to pay to _________________ or registered assigns the principal sum of ______ Dollars on April 1, 2011, at the office or agency of the Company referred to below, and to pay interest thereon on October 1, 2001, and semiannually thereafter, on April 1 and October 1 in each year from the Securities Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate of 7 5/8% per annum until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand interest on any overdue interest at the rate borne by the Securities from the date of the Interest Payment Date on which such overdue interest becomes payable to the date payment of such interest has been made or duly provided for. - ---------------------------- * Include only for Exchange Securities. 33 25 [The Holder of this Security is entitled to the benefits of the Registration Rights Agreement, dated March 22, 2001 (the "Registration Rights Agreement"), between the Company and the Initial Purchasers named therein. In the event that either (i) a registration statement under the Securities Act (the "Exchange Offer Registration Statement") with respect to an exchange offer (the "Exchange Offer") for this Initial Security is not filed with the Securities and Exchange Commission (the "Commission") on or prior to May 21, 2001 or (ii) the Exchange Offer is not consummated or a registration statement under the Securities Act with respect to resales of this Security (the "Shelf Registration Statement") is not declared effective by the Commission on or prior to September 18, 2001, in either case in accordance with the Registration Rights Agreement, the aforesaid interest rate borne by this Security shall be increased by one-quarter of one percent per annum for the first 30 days following May 21, 2001 in the case of (i) above, or the first 90 days following September 18, 2001 in the case of (ii) above. Such interest rate will increase by an additional one-quarter of one percent per annum at the beginning of each subsequent 30-day period in the case of (i) above, or 90-day period in the case of (ii) above, up to a maximum aggregate increase of one percent per annum. Upon (x) the filing of a registration statement with respect to the Exchange Offer or (y) the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement, as the case may be, the interest rate borne by this Security will be reduced to 7 5/8% per annum.]** If any interest has accrued on this Security in respect of any period prior to the issuance of this Security, such interest will be payable in respect of such period at the rate or rates borne by the Predecessor Security surrendered in exchange for this Security from time to time during such period. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for, and interest on such defaulted interest at the interest rate borne by this Security, to the extent lawful, shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior - --------------------------- ** Include only for Initial Securities. 34 26 to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of the principal of and interest on this Security will be made at the office or agency of the Company maintained for that purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under this Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. CSC HOLDINGS, INC. By ---------------------------------------- Attest: By ---------------------------------- 35 27 SECTION 203. FORM OF REVERSE OF SECURITY. This Security is one of a duly authorized issue of securities of the Company designated as its 7 5/8% [Series B]* Senior Notes due 2011 (herein called the "Securities"), limited (except as otherwise provided in this Indenture referred to below) in aggregate principal amount to $1,000,000,000, which may be issued under an indenture (herein called the "Indenture") dated as of March 22, 2001, between the Company and The Bank of New York, trustee (herein called the "Trustee", which term includes any successor trustee under this Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee, the holders of the Senior Indebtedness and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. [This Security is exchangeable under certain circumstances as provided in the Indenture for the Company's 7 5/8% Series B Senior Notes due 2011 (herein called the "Exchange Securities", issued under the Indenture. Unless the context otherwise requires, the Securities and Exchange Securities shall constitute one series for all purposes under the Indenture, including without limitation amendments and waivers.]** This Security is not subject to redemption at the option of the Company prior to Maturity. If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in this Indenture. The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company on this Security and (b) certain restrictive covenants and the related Defaults and Events of Default, upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security. - -------------------------------- * Include only for Exchange Securities. ** Include only for Initial Securities. 36 28 This Security does not have the benefit of any sinking fund obligations. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose in The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges payable in connection with any registration of transfer or exchange. 37 29 Prior to the time of due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary. This Security shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. CERTIFICATE OF TRANSFER** FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers this Security to ________________________________________________________________________________ (Please typewrite or print name and taxpayer identification number) ________________________________________________________________________________ (Please typewrite or print address) and hereby irrevocably constitutes and appoints ____________________________ his attorney to transfer the same on the books of the Company, with full power of substitution in the premises. In connection with any transfer of all or any portion of the Security evidenced by this certificate for as long as such Security is a Restricted Security, the undersigned confirms that such Security is being transferred: [ ] (a) Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"); or - ---------------------------- ** Include only for Initial Securities. 38 30 [ ] (b) Pursuant to offers and sales to non-U.S. Persons that occur outside the United States within the meaning of Regulation S under the Securities Act; Unless one of the boxes above is checked, the Trustee will refuse to register all or any portion of the Security evidenced by this certificate in the name of any person other than the registered holder thereof (or hereof); provided, however, that the Trustee may, in its sole discretion, register the transfer of such Security if it has received such certifications, legal opinions and/or other information as it has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Dated: Signature ____________________________________ NOTE: The signature to this assignment must correspond with the name as written upon the face of this Security in every particular, without alteration or enlargement, or any change whatever. TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A (including the information specified in Rule 144(d)(4)) or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated:___________________ ______________________________________ To be signed by an executive officer SCHEDULE OF EXCHANGES FOR DEFINITIVE SECURITIES The following exchanges of a part of this Security in global form for definitive Securities or of definitive Securities for a part of this Security in global form have been made: 39 31
Principal Amount of Amount of Amount of Signature of decrease in increase in this Security authorized Principal Principal in global form signatory of Amount of Amount of following such Trustee or Date of this Security this Security decrease (or Securities Exchange in global form in global form increase) Custodian - -------- -------------- -------------- -------------- ------------
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By ---------------------------------------- Authorized Signatory Dated: SECTION 205. FORM OF LEGEND ON RESTRICTED SECURITIES. During the period beginning on March 22, 2001 and ending on the later of March 22, 2003 and the date two years after the last date on which the Company or any Affiliate of the Company was the owner of an Initial Security (or any Predecessor Security), any such Initial Security issued or owned during the period set forth above, as the case may be, and any Initial Security issued upon registration of transfer of, or in exchange for, or in lieu of, such Initial Security shall be deemed a "Restricted Security" and shall be subject to the restrictions on transfer provided in the legend set forth below; provided, however, that the term "Restricted Security" shall not include (a) any Initial Security which is issued upon transfer of, or in exchange for, any Initial Security which is not a Restricted Security or (b) any Initial Security as to which such restrictions on transfer have been terminated in accordance with Section 314 or (c) any Exchange Security issued pursuant to an Exchange Offer. Any Restricted Security shall bear a legend in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN 40 32 SUCH DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK 10041) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND SUCH CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")), OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE ORIGINAL ISSUE HEREOF ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A, (D) OUTSIDE THE UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE TRANSACTION PURSUANT TO REGULATION S UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH 41 33 OF THEM. 42 34 SECTION 206. FORM OF LEGEND FOR BOOK-ENTRY SECURITIES. Any Global Security authenticated and delivered hereunder shall bear a legend (which would be in addition to any other legends required in the case of a Restricted Security) in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK 10041) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND SUCH CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 43 35 ARTICLE THREE THE SECURITIES SECTION 301. TITLE AND TERMS. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $1,000,000,000, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 303, 304, 305, 306 or 906. The Initial Securities shall be known and designated as the "7 5/8% Senior Notes due 2011" and the Exchange Securities shall be known and designated as the "7 5/8% Series B Senior Notes due 2011" of the Company. Their Stated Maturity shall be April 1, 2011, and they shall bear interest at the rate of 7 5/8% per annum (except as otherwise provided for in the form of Security) from the Security Issue Date, or the most recent Interest Payment Date to which interest has been paid or duly provided for on a given Security or a Security surrendered in exchange for such Security, as the case may be, payable on October 1, 2001 and semiannually thereafter on April 1 and October 1 in each year and at said Stated Maturity, until the principal thereof is paid or duly provided for. The initial Interest Payment Date for any Security other than the Initial Securities shall be the first October 1 or April 1 occurring after the Security Issue Date for such Security. The initial Interest Payment Date for each Initial Security shall be October 1, 2001. The Initial Securities and the Exchange Securities shall rank pari passu. The principal of and interest on the Securities shall be payable at the office or agency of the Company maintained for such purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose; provided, however, that, at the option of the Company, cash interest may be paid by check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Security Register. The Securities are not subject to redemption at the option of the Company. At the election of the Company, the entire indebtedness represented by the Securities or certain of the Company's obligations and covenants and certain Events of Default thereunder may be defeased as provided in Article Twelve. The Securities will be senior unsecured obligations of the Company and will rank pari passu in right of payment with all existing and future unsubordinated indebtedness of the Company. 44 36 SECTION 302. DENOMINATIONS. The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by any one of the following: its Chairman, Chief Executive Officer, one of its Vice Chairmen, its President or one of its Vice Presidents and attested by one of its Vice Presidents or its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. The Trustee shall (upon Company Order) authenticate and deliver Securities for original issue in an aggregate principal amount of up to $1,000,000,000. Each Security shall be dated the date of its authentication. No Security endorsed thereon shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein duly executed by the Trustee by manual signature of one of its duly authorized signatories, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. In case the Company, pursuant to Article Eight, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of substantially all of its properties and assets to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the successor Person which shall have received a conveyance, transfer, Lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article Eight, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, Lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon written order of the successor 45 37 Person, shall authenticate and deliver Securities as specified in such request for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 303 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of any Holder but without expense to such Holder, shall provide for the exchange of all Securities at the time Outstanding held by such Holder for Securities authenticated and delivered in such new name. Except as described below, the Securities will be deposited with, or on behalf of, the Depository, and registered in the name of the Depository or the nominee of the Depository in the form of one or more global note certificates (each a "Rule 144A Global Security"), for credit to the respective accounts of the beneficial owners of the Securities represented thereby. The Rule 144A Global Securities shall bear the legend set forth in Section 206 and, in the case of Restricted Securities, the legend set forth in Section 205. Securities purchased by persons outside the United States pursuant to sales in accordance with Regulation S under the Securities Act shall be deposited with, or on behalf of, the Depository, and registered in the name of the Depository or the nominee of the Depository in the form of one or more global note certificates (each a "Regulation S Global Security"), for credit to the respective accounts of the beneficial owners of the Securities represented thereby (or such other accounts as they may direct), provided that upon such deposit all such Securities shall be credited to or through accounts maintained at the Depository by or on behalf of the Euroclear System or Cedel Bank, S.A. Securities represented by a Regulation S Global Security will not be exchangeable for Securities in registered definitive form (each a "Physical Security") until the expiration of the "40-day restricted period" within the meaning of Rule 903(c)(3) of Regulation S under the Securities Act. The Regulation S Global Securities shall bear the legend set forth in Section 206 and, in the case of Restricted Securities, the legend set forth in Section 205. SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are typewritten, printed, lithographed, engraved or otherwise produced or produced by any combination of these methods, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as conclusively evidenced by their execution of such Securities. If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for such purpose 46 38 pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby initially appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Such Security Register shall distinguish between Initial Securities and Exchange Securities. Except as otherwise described in this Article Three, upon surrender for registration of transfer of any Security at the office or agency of the Company designated pursuant to Section 1002 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denomination or denominations and of a like aggregate principal amount. At the option of the Holder, Securities may be exchanged for other Securities of any authorized denomination or denominations and of a like aggregate principal amount upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive; provided that no exchange of Initial Securities for Exchange Securities shall occur until an Exchange Offer Registration Statement shall have been declared effective by the Commission, the Trustee shall have received an Officers' Certificate confirming that the Exchange Offer Registration Statement has been declared effective by the Commission and the Initial Securities to be exchanged for the Exchange Securities shall be canceled by the Trustee. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and (subject to the provisions in the Initial Securities regarding the payment of additional interest) entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. 47 39 Every Security presented or surrendered for registration of transfer, or for exchange, shall (if so required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. Every Restricted Security shall be subject to, and no transfer shall be made other than in accordance with, the restrictions on transfer provided in the legend set forth on the form of the face of each Restricted Security and the restrictions set forth in this Article Three, and the Holder of each Restricted Security, by such Holder's acceptance thereof, agrees to be bound by such restrictions on transfer. The Security Registrar shall notify the Company of any proposed transfer of a Restricted Security to any Person. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 303, 304 or 906 not involving any transfer. The Company shall not be required to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before an Interest Payment Date and ending on the close of business on such Interest Payment Date. SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If (a) any mutilated Security is surrendered to the Trustee, or (b) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them and any agent of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a replacement Security of like tenor and principal amount, and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a replacement Security, pay such Security. 48 40 Upon the issuance of any replacement Securities under this Section 306, the Company may require the payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every replacement Security issued pursuant to this Section 306 in lieu of any destroyed, lost or stolen Security shall constitute a contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section 306 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. The initial Interest Payment Date for any Security other than the Initial Securities shall be the first April 1 or October 1 occurring after the Securities Issue Date for such Security. The initial Interest Payment Date for each Initial Security shall be October 1, 2001. Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date and interest on such defaulted interest at the interest rate borne by the Securities, to the extent lawful (such defaulted interest and interest thereon herein collectively called "Defaulted Interest"), shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Subsection (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements 49 41 satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Subsection provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date. In the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Subsection (b). (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section 307, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. PERSONS DEEMED OWNERS. Prior to the time of due presentment for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 309. CANCELLATION. All Securities surrendered for payment, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for 50 42 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 canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 309, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of as directed by the Company pursuant to a Company Order, provided, however, that the Trustee shall not be required to destroy such canceled Securities. SECTION 310. COMPUTATION OF INTEREST. Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. SECTION 311. REGISTRATION RIGHTS OF HOLDERS OF INITIAL SECURITIES. Pursuant to the terms of the Registration Rights Agreement, holders of Initial Securities, if any, shall be entitled to the benefits of the Registration Rights Agreement. SECTION 312. CUSIP NUMBERS. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use) in addition to serial numbers, and, if so, the Trustee shall use such "CUSIP" numbers in addition to serial numbers in notices of repurchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a repurchase and that reliance may be placed only on the serial or other identification numbers printed on the Securities, and any such repurchase shall not be affected by any defect in or omission of such "CUSIP" numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. SECTION 313. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (a) The Global Securities initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Section 206 and, in the case of Restricted Securities in the form of Global Securities, Section 205. Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization 51 43 furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (b) Transfers of Global Securities shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in a Rule 144A Global Security may be transferred or exchanged for interests in a Regulation S Global Security, and interests of beneficial owners in a Regulation S Global Security may be transferred or exchanged for interests in a Rule 144A Global Security, in each case in accordance with the rules and procedures of the Depository and the provisions of Section 314. Interests of beneficial owners in the Global Securities may be transferred or exchanged for Physical Securities in accordance with the rules and procedures of the Depository and the provisions of Section 314. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if (i) the Depository notifies the Company that it is unwilling or unable to continue as a depository for such Global Security or if at any time the Depository ceases to be a clearing agency registered under the Exchange Act, and a successor depository is not appointed by the Company within 90 days, (ii) there shall have occurred and be continuing an Event of Default with respect to the Securities represented by such Global Security or (iii) the Company at any time determines not to have Securities represented by a Global Security. Except as provided above, any Security authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether pursuant to this Section 313, Section 304, 305, 306 or 906 or otherwise, shall also be a Global Security and bear the legend specified in Section 206. (c) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Security to beneficial owners pursuant to paragraph (b), the Security Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and principal amount of authorized denominations. (d) In connection with the transfer of Global Securities as an entirety to beneficial owners pursuant to paragraph (b), the Global Securities shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the Global Securities, an equal aggregate principal 52 44 amount of Physical Securities of like tenor of authorized denominations. (e) Any Physical Security delivered in exchange for an interest in a Global Security pursuant to paragraph (b) or (c) of this Section 313 shall, except as otherwise provided by clause (1)(x) of paragraph (a) and by paragraph (d) of Section 314, bear the legend set forth in Section 205. (f) The Holder of any Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. SECTION 314. SPECIAL TRANSFER PROVISIONS. (a) Transfers to Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to any non-U.S. person: (i) the Security Registrar shall register the transfer of any Restricted Security if (x) the requested transfer is not prior to the date which is two years (or such other period as may be prescribed by Rule 144(k) under the Securities Act or any successor provision thereunder) after the later of the original issue date of such Security (or of any Predecessor Security) or the last day on which the Company or any Affiliate of the Company was the owner of such Security or any Predecessor Security or (y) the proposed transferee has checked the box provided for on the form of Security stating, and has provided to the Security Registrar such certifications, opinions and other information as the Security Registrar may (and, if so directed by the Company, shall) require, stating that such Security is being transferred pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; and (ii) the Security Registrar shall register the transfer of any Restricted Security if the proposed transferor is an Agent Member holding a beneficial interest in a Rule 144A Global Security, upon receipt by the Security Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depository's and the Security Registrar's procedures; whereupon the Security Registrar shall reflect on its books and records the date of such transfer and (A) (if the transfer involves a transfer of a beneficial interest in a Rule 144A Global Security) a decrease in the principal amount of such Rule 144A Global Security in an amount equal to the principal amount to be transferred and (B) an increase in the principal amount of a Regulation S Global Security in an amount equal to the principal amount to be 53 45 transferred. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to a person purporting to be a QIB (excluding transfers to non-U.S. persons): (i) the Security Registrar shall register the transfer of any Restricted Security if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or who has otherwise advised the Company and the Security Registrar in writing, that the transfer has been made in compliance with the exemption from registration under the Securities Act provided under Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Company and the Security Registrar in writing, that such transferee represents and warrants that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that each of it and any such account is a QIB within the meaning of Rule 144A and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the foregoing representations in order to claim the exemption from registration provided by Rule 144A; and (ii) the Security Registrar shall register the transfer of any Restricted Security if the proposed transferee is an Agent Member, and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Rule 144A Global Security, upon receipt by the Security Registrar of instructions given in accordance with the Depository's and the Security Registrar's procedures, the Security Registrar shall reflect on the Security Register the date and an increase in the principal amount of the Rule 144A Global Security in an amount equal to the principal amount of the Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred. (c) Other Transfers. If a Holder proposes to transfer a Security pursuant to any exemption from the registration requirements of the Securities Act other than as provided for by Sections 314(a) and 314(b), the Security Registrar shall only register such transfer or exchange if such transferor delivers to the Security Registrar and the Trustee an Opinion of Counsel satisfactory to the Company and the Security Registrar that such transfer is in compliance with the Securities Act and the terms of this Indenture; provided that the Company may, based upon the opinion of its counsel, instruct the Security Registrar by a Company Order not to register such transfer in any case where the proposed transferee is not a QIB or a non-U.S. person. 54 46 (d) Private Placement Legend. Upon the registration of transfer, exchange or replacement of Restricted Securities, the Security Registrar shall deliver only Securities that bear the legend set forth in Section 205 unless the circumstances contemplated by clause (a)(1)(x) of this Section 314 exist. By its acceptance of any Security bearing the legend set forth in Section 205, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in such legend and agrees that it will transfer such Security only as provided in this Indenture. The Security Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 313 or this Section 314 for a period of two years, after which time such letters, notices and other written communications shall at the written request of the Company be delivered to the Company. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Security Registrar. (e) Termination of Restrictions. The restrictions imposed by this Section 314 upon the transferability of any particular Restricted Security shall cease and terminate (i) on the later of March 22, 2003 and two years after the last date on which the Company or any Affiliate of the Company was the owner of such Restricted Security (or any predecessor of such Restricted Security) or (ii) (if earlier) if and when such Restricted Security has been sold pursuant to an effective registration statement under the Securities Act. Any Restricted Security as to which such restrictions on transfer shall have expired in accordance with their terms or shall have terminated may, upon surrender of such Restricted Security for exchange to the Trustee or any transfer agent in accordance with the provisions of Section 305, be exchanged for a new Initial Security, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by Section 205. The Company shall inform the Trustee in writing of (i) the effective date of any registration statement registering the Initial Securities under the Securities Act and (ii) at the request of the Trustee, the date which is two years after the last date on which the Company or any Affiliate of the Company was the owner of a Restricted Security in the event that an Exchange Offer has not been consummated. ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall, upon Company Request, cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Securities herein expressly provided for) and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 55 47 (a) either (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (ii) all such Securities not theretofore delivered to the Trustee for cancellation (A) have become due and payable, or (B) will become due and payable within one year, and the Company, in the case of (A) or (B) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity; (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 606 and, if money shall have been deposited with the Trustee pursuant to subclause (2) of Subsection (a) of this Section 401, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge. 56 48 SECTION 402. APPLICATION OF TRUST MONEY. Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE REMEDIES SECTION 501. EVENTS OF DEFAULT. An "Event of Default" occurs if: (a) the Company defaults in the payment of interest on any Security when the same becomes due and payable and such default continues for a period of 30 days; (b) the Company defaults in the payment of the principal of any Security when the same becomes due and payable at maturity, upon acceleration or otherwise; (c) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture, and the Default continues for the period and after the notice, if any, specified below; (d) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or one of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or one of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or shall be created hereafter (but excluding any Indebtedness for the deferred purchase price of property or services owed to the Person providing such property or services as to which the Company or such Restricted Subsidiary is contesting its obligation to pay the same in good faith and by proper proceedings and for which the Company or such Restricted Subsidiary has established appropriate reserves), and (i) either (A) such event of default results from the failure to pay any such Indebtedness at final maturity or (B) as a result of such event of default the maturity of such Indebtedness has been accelerated prior to its expressed maturity and (ii) the principal amount of such Indebtedness equals $10,000,000 or more or, together with the principal amount of any such Indebtedness in default for failure to pay principal at maturity or the maturity of which has been so accelerated, aggregates $10,000,000 or more; 57 49 (e) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Restricted Subsidiary and either (i) an enforcement proceeding shall have been commenced by any creditor upon such judgment or (ii) such judgment remains undischarged and unbonded for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such judgments exceeds $10,000,000; (f) the Company pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case or proceeding, (ii) consents to the entry of an order for relief against it in an involuntary case or proceeding, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) admits in writing that it generally is unable to pay its debts as the same become due; or (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company in an involuntary case or proceeding, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders the liquidation of the Company; and in each case the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law. A Default under Section 501(c) is not an Event of Default until the Trustee notifies the Company in writing, or the Holders of at least 25% in principal amount of the Securities then Outstanding notify the Company and the Trustee in writing, of the Default, and 58 50 the Company does not cure the Default within 60 days (30 days in the case of a Default under Section 801 or 1004) after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." Such notice to the Company shall be given by the Trustee if so requested in writing by the Holders of 25% of the principal amount of the Securities then Outstanding. SECTION 502. ACCELERATION OF MATURITY; RESCISSION. If an Event of Default (other than an Event of Default specified in Section 501(f) or 501(g)) occurs and is continuing, the Trustee or the Holders of at least 25% of the principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, by written notice to the Company and the agents, if any, under the Bank Credit Agreement (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare all unpaid principal of and accrued interest on all the Securities to be due and payable, as specified below. Upon a declaration of acceleration, such principal and accrued interest shall be due and payable 10 days after receipt by the Company of such written notice given hereunder. If an Event of Default specified in Section 501(f) or 501(g) with respect to the Company occurs, the amounts described above shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Upon payment of such principal and interest all of the Company's obligations under the Securities and this Indenture, other than obligations under Section 606, shall terminate. The Holders of at least a majority in principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, by written notice to the Trustee, may rescind an acceleration and its consequences if (i) all existing Events of Default, other than the non-payment of principal of or interest on the Securities which have become due solely because of the acceleration, have been cured or waived and (ii) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction. Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in respect of the Securities because an Event of Default specified in Section 501(d) shall have occurred and be continuing, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the Trustee by the Company and countersigned by the holders of such Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days after such declaration of acceleration in respect of the Securities, and no other Event of Default has occurred during such 30-day period which has not been cured or waived during such period. Notices by the Trustee to the agents under the Bank Credit Agreement provided 59 51 for herein shall be delivered or mailed to Toronto Dominion (Texas), Inc., 909 Fannin Street, Suite 1700, Houston, Texas 77010, Attention: Agency Department; and to any other person who hereafter becomes an agent under the Bank Credit Agreement, provided the Trustee has been notified by the Company or the Banks of the names and mailing addresses of such persons. SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if (a) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest, with interest upon the overdue principal and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the rate borne by the Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture by such appropriate private or judicial proceedings as the Trustee shall deem most effectual to protect and enforce such rights. 60 52 SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 606. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any proposal, plan of reorganization, arrangement, adjustment or composition or other similar arrangement affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. 61 53 SECTION 506. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 606; SECOND: To the payment of the amounts then due and unpaid upon the Securities for principal and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest; and THIRD: The balance, if any, to the Company. SECTION 507. LIMITATION ON SUITS. No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or the Securities, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (b) the Holders of not less than 25% in principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities; 62 54 it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture except in the manner provided in this Indenture and for the equal and ratable benefit of all the Holders. SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 307) interest on such Security on the respective due dates expressed in such Security and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as provided in Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised 63 55 from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. CONTROL BY HOLDERS. The Holders of a majority in principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that (a) such direction shall not be in conflict with any rule of law or with this Indenture or expose the Trustee to personal liability, and (b) subject to the provisions of Trust Indenture Act Section 315, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of a majority in principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, may on behalf of the Holders of all the Securities waive any past Default or Event of Default hereunder and its consequences, except a Default or Event of Default (a) in the payment of the principal of or interest on any Security, or (b) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and 64 56 expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 514 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the respective Stated Maturities expressed in such Security; provided that neither this Section 514 nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company. SECTION 515. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX THE TRUSTEE SECTION 601. NOTICE OF DEFAULTS. Within 90 days after the occurrence of any Default, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, notice of such Default hereunder actually known to a Responsible Officer of the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders; and provided further that, in the case of any default or breach of the character specified in Section 501(d), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. 65 57 SECTION 602. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Trust Indenture Act Sections 315(a) through 315(d): (a) the Trustee may conclusively rely and shall be fully 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 (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; 66 58 (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements to be made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. SECTION 604. MAY HOLD SECURITIES. The Trustee, any Paying Agent, Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Trust Indenture Act Sections 310(b) and 311, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent. SECTION 605. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 606. COMPENSATION AND REIMBURSEMENT. The Company agrees: 67 59 (a) to pay to the Trustee from time to time such compensation as shall be agreed to in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and (c) to indemnify each of the Trustee or any predecessor Trustee for, and to hold it harmless against, any and all loss, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section 606, the Trustee shall have a Lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of Holders of particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(f) or 501(g), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services will be intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section 606 shall survive the termination of this Indenture. SECTION 607. CONFLICTING INTERESTS. (a) The Trustee shall comply with the provisions of Section 310(b) of the Trust Indenture Act. (b) The indenture dated as of February 15, 1993, for the Company's 9 7/8% Senior Subordinated Debentures due 2013, the indenture dated as of April 1, 1993, for the Company's 9 7/8% Senior Subordinated Debentures due 2023 the indenture dated as of November 1, 1995, for the Company's 9 1/4% Senior Subordinated Debentures due 2005, the Company's 9 7/8% Senior Subordinated Debentures due 2006 and the Company's 10 1/2% Senior 68 60 Subordinated Debentures due 2016, the indenture dated as of August 26, 1997 for the Company's 8 1/8% Senior Debentures due 2009 and the indenture dated as of July 1, 1998 for the Company's 7 1/4% Senior Notes due 2008 and 7 5/8% Senior Debentures due 2018 and the indenture dated as of July 1, 1999 for the Company's 8 1/8% Senior Notes due 2009 and 8 1/8% Series B Senior Notes due 2009 shall be deemed to be specifically described herein for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder qualified or to be qualified under Trust Indenture Act Section 310(a)(1) and which shall have a combined capital and surplus of at least $50,000,000 to the extent there is such an institution eligible and willing to serve. If the Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of Federal, State, Territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 608, the combined capital and surplus of the Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 608, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 610. (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the removed Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. 69 61 (d) If at any time: (i) the Trustee shall fail to comply with the provisions of Trust Indenture Act Section 310(b) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (ii) the Trustee shall cease to be eligible under Section 608 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any case, (A) the Company by a Board Resolution may remove the Trustee, or (B) subject to Section 514, the Holder of any Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 610, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders of the Securities and so accepted appointment, the Holder of any Security who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. 70 62 SECTION 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee, provided, however, that the retiring Trustee shall continue to be entitled to the benefit of Section 606(c); but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 611. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 612. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and when the Trustee shall be or become a creditor of the Company (or any other obligor under the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). SECTION 613. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY. Any application by the Trustee fro written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken 71 63 or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer of the Company actually received such application, unless any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted. ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee or any agent of either of them shall be held accountable by reason of the disclosure of any information as to the names and addresses of the Holders in accordance with Trust Indenture Act Section 312, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Trust Indenture Act Section 312. SECTION 702. REPORTS BY TRUSTEE. Within 60 days after April 30 of each year commencing with the first April 30 after the Security Issue Date, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such April 30 if required by Trust Indenture Act Section 313(a). SECTION 703. REPORTS BY COMPANY. The Company shall: (a) file with the Trustee, within 30 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with rules 72 64 and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates); (b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates); and (c) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Trust Indenture Act Section 313(c), such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 703 as may be required by rules and regulations prescribed from time to time by the Commission. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Company shall not consolidate or merge with or into, or sell, assign, transfer, lease, convey, or otherwise dispose of all or substantially all of its assets to, any Person, unless: (a) the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, 73 65 conveyance or disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia and shall assume by supplemental indenture hereto all the obligations of the Company under the Securities and this Indenture; (b) immediately before and immediately after such transaction, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; (c) immediately after such transaction, and after giving effect thereto, the Person formed by or surviving any such consolidation or merger, or to which such sale, assignment, transfer, lease or conveyance or disposition shall have been made (the "successor"), shall have a Cash Flow Ratio not in excess of 9 to 1; and (d) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if one is required by this Section 801, comply with this Section 801 and that all conditions precedent herein provided for relating to such transaction have been complied with. Cash Flow Ratio for purposes of this Section 801 shall be computed as if any such successor were the Company. SECTION 802. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger, or any sale, assignment, transfer, Lease or conveyance or other disposition of all or substantially all of the assets, of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, assignment, transfer, Lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein. When a successor assumes all the obligations of its predecessor under this Indenture and the Securities, the predecessor will be released from those obligations, provided that in the case of a transfer by lease, the predecessor corporation shall not be released from the payment of principal and interest on the Securities. 74 66 ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; (b) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein or in the Securities conferred upon the Company; (c) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture; provided that, in each case, such provisions shall not adversely affect the interests of the Holders in any material respect; (d) to secure the Securities, if the Company so elects; (e) to supplement any provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of the Securities pursuant to Sections 1201, 1202 and 1203. (f) to make any changes necessary to qualify this Indenture under the Trust Indenture Act in connection with the Exchange Offer or the Shelf Registration Statement; or (g) to make any other change that does not adversely affect the rights of any Holder. SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority in aggregate principal amount of the Initial Securities and the Exchange Securities then Outstanding, voting together as a single class, by Act of such Holders delivered to the Company and the Trustee and the Company, each when authorized by a Board Resolution, and the Trustee may enter 75 67 into one or more indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of waiving or modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture, amendment or waiver shall, without the consent of the Holder of each Outstanding Security affected thereby: (a) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon, or change the coin or currency in which the principal of any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof; or (b) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (c) modify any of the provisions of this Section 902 or Section 513, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby. It shall not be necessary for any Act of Holders under this Section 902 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Trust Indenture Act Section 315(a) through 315(d) and Section 602 hereof) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall 76 68 form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. ARTICLE TEN COVENANTS SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST. The Company will duly and punctually pay the principal of and interest on the Securities in accordance with the terms of the Securities and this Indenture. SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain, in The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. If the Corporate Trust Office is located in New York City, then it shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. 77 69 The Company may from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Securities may be presented or surrendered for any or all such purposes, and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such office or agency. SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities, it will, on or before each due date of the principal of or interest on any Securities, deposit with a Paying Agent a sum in same day funds (or New York Clearing House funds if such deposit is made prior to the date on which such deposit is required to be made) sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of such action or any failure so to act. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 1003, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal or interest; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such 78 70 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 or interest on any Security and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on Company Request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. SECTION 1004. CORPORATE EXISTENCE. Subject to Article Eight, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and that of each Restricted Subsidiary and the corporate rights (charter and statutory), corporate licenses and corporate franchises of the Company and its Restricted Subsidiaries, except where a failure to do so, singly or in the aggregate, is not likely to have a materially adverse effect upon the business, assets, financial condition or results of operations of the Company and the Restricted Subsidiaries taken as a whole determined on a consolidated basis in accordance with generally accepted accounting principles; provided that the Company shall not be required to preserve any such existence (except of the Company), right, license or franchise if the Board of Directors, or of the Restricted Subsidiary concerned, shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company or such Restricted Subsidiary and that the loss thereof is not disadvantageous in any material respect to the Holders. SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon it or any Subsidiary or upon the income, profits or property of the Company or any of its Subsidiaries and (b) all material lawful claims for labor, materials and supplies, which, if unpaid, might by law become a lien upon the property of the Company or any Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. SECTION 1006. MAINTENANCE OF PROPERTIES. The Company shall cause all material properties owned by or leased to it or any 79 71 Restricted Subsidiary and necessary in the conduct of its business or the business of such Restricted Subsidiary to be maintained and kept in normal condition, repair and working order, ordinary wear and tear excepted; provided that nothing in this Section 1006 shall prevent the Company or any Restricted Subsidiary from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Board of Directors or the Restricted Subsidiary concerned, or of any officer (or other agent employed by the Company or any Restricted Subsidiary) of the Company or such Restricted Subsidiary having managerial responsibility for any such property, desirable in the conduct of the business of the Company or any Restricted Subsidiary of the Company and if such discontinuance or disposal is not adverse in any material respect to the Holders. The Company shall provide or cause to be provided, for itself and any Restricted Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of the kinds customarily insured against by corporations similarly situated and owning like properties in the same general areas in which the Company or such Restricted Subsidiaries operate. SECTION 1007. LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur, create, issue, assume, guarantee or otherwise become liable for, contingently or otherwise, or become responsible for the payment of, contingently or otherwise, any Indebtedness (other than Indebtedness between or among any of the Company and Restricted Subsidiaries) unless, after giving effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1. SECTION 1008. LIMITATION ON LIENS. The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind, except for Permitted Liens, on or with respect to any of its property or assets, whether owned at the date of this Indenture or hereafter acquired, or any income, profits or proceeds therefrom, or assign or otherwise convey any right to receive income thereon, unless (x) in the case of any Lien securing Indebtedness that is subordinated in right of payment to the Securities, the Securities are secured by a Lien on such property, assets or proceeds that is senior in priority to such Lien and (y) in the case of any other Lien, the Securities are equally and ratably secured. SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS. Except as otherwise provided in this Section 1009, the Company shall not, and shall not permit any Restricted Subsidiary to, make any Restricted Payment if (a) at the time of such proposed Restricted Payment, a Default or Event of Default shall have occurred and be 80 72 continuing or shall occur as a consequence of such Restricted Payment or (b) immediately after giving effect to such Restricted Payment, the aggregate of all Restricted Payments that shall have been made on or after July 1, 1988 would exceed the sum of: (a) $25,000,000, plus (b) an amount equal to the difference between (i) the Cumulative Cash Flow Credit and (ii) 1.2 multiplied by Cumulative Interest Expense. For purposes of this Section 1009, the amount of any Restricted Payment, if other than cash, shall be based upon fair market value as determined by the Board of Directors, whose good faith determination shall be conclusive. The foregoing provisions of this Section 1009 shall not prevent (i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment complied with the provisions or this Section 1009; and (ii) the retirement, redemption, purchase, defeasance or other acquisition of any shares of the Company's Capital Stock or warrants, rights or options to acquire Capital Stock of the Company in exchange for, or out of the proceeds of a sale (within one year before or 180 days after such retirement, redemption, purchase, defeasance or other acquisition) of, other shares of the Company's Capital Stock or warrants, rights or options to acquire Capital Stock of the Company. For purposes of determining the aggregate permissible amount of Restricted Payments in accordance with clause (b) of the first paragraph of this Section 1009, all amounts expended pursuant to clause (i) of this paragraph shall be included and all amounts expended or received pursuant to clause (ii) of this paragraph shall be excluded; provided, however, that amounts paid pursuant to clause (i) of this paragraph shall be included only to the extent that such amounts were not previously included in calculating Restricted Payments. For the purposes of this Section 1009, the net proceeds from the issuance of shares of Capital Stock of the Company upon conversion of Indebtedness shall be deemed to be an amount equal to (i) the accreted value of such Indebtedness on the date of such conversion and (ii) the additional consideration, if any, received by the Company upon such conversion thereof, less any cash payment on account of fractional shares (such consideration, if in property other than cash, to be determined by the Board of Directors, whose good faith determination shall be conclusive and evidenced by a Board Resolution). If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment, would in the good faith determination of the Company be permitted under the requirements of this Section 1009, such Restricted Payment shall be deemed to have been made in compliance with this Section 1009 notwithstanding any subsequent adjustments made in good faith to the Company's financial statements affecting Cumulative Cash Flow Credit or Cumulative Interest Expense for any period. 81 73 SECTION 1010. LIMITATION ON INVESTMENTS IN UNRESTRICTED SUBSIDIARIES AND AFFILIATES. The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, (a) make any Investment or (b) allow any Restricted Subsidiary to become an Unrestricted Subsidiary (a "redesignation of a Restricted Subsidiary"), in each case unless (i) no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence of such Investment or such redesignation of a Restricted Subsidiary and (ii) after giving effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1. The foregoing provisions of this Section 1010 shall not prohibit (a) any renewal or reclassification of any Investment existing on the date hereof or (b) trade credit extended on usual and customary terms in the ordinary course of business. SECTION 1011. TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, an Affiliate of the Company that is not a Subsidiary, having a value, or for consideration having a value, in excess of $10,000,000 individually or in the aggregate unless the Board of Directors shall make a good faith determination that the terms of such transaction are, taken as a whole, no less favorable to the Company or such subsidiary, as the case may be, than those which might be available in a comparable transaction with an unrelated Person. For purposes of clarification, this Section 1011 shall not apply to any Restricted Payments permitted by Section 1009. SECTION 1012. PROVISION OF FINANCIAL STATEMENTS. (a) The Company shall supply without cost to each Holder of the Securities, and file with the Trustee (if not otherwise filed with the Trustee pursuant to Section 703) within 30 days after the Company is required to file the same with the Commission, copies of the annual reports and quarterly reports and of the information, documents and other reports which the Company may be required to file with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange. (b) If the Company is not required to file with the Commission such reports and other information referred to in Section 1012(a), the Company shall furnish without cost to each Holder of the Securities and file with the Trustee (i) within 140 days after the end of each fiscal year, annual reports containing the information required to be contained in Items 1, 2, 3, 6, 7, 8 and 9 of Form 10-K promulgated under the Exchange Act, or substantially the same information required to be contained in comparable items of any successor form, and (ii) 82 74 within 75 days after the end of each of the first three fiscal quarters of each fiscal year, quarterly reports containing the information required to be contained in Form 10-Q promulgated under the Exchange Act, or substantially the same information required to be contained in any successor form. (c) At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a Holder of a Restricted Security, the Company will promptly furnish or cause to be furnished such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) to such Holder or to a prospective purchaser of such Security designated by such holder, as the case may be, in order to permit compliance by such holder with Rule 144A under the Securities Act. SECTION 1013. STATEMENT AS TO COMPLIANCE. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year ending after March 22, 2001, a brief certificate of its principal executive officer, principal financial officer or principal accounting officer stating whether, to such officer's knowledge, the Company is in compliance with all covenants and conditions under this Indenture. For purposes of this Section 1013, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. SECTION 1014. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 1007 through 1012 if, before or after the time for such compliance, the Holders of a majority in aggregate principal amount of the Outstanding Securities, by Act of such Holders, waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. SECTION 1015. STATEMENT BY OFFICERS AS TO DEFAULT. The Company shall deliver to the Trustee, as soon as possible and in any event within five days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers' Certificate setting forth the details of such Event of Default or default and the action which the Company proposes to take with respect thereto. 83 75 ARTICLE ELEVEN REDEMPTION OF SECURITIES SECTION 1101. NO RIGHT OF REDEMPTION. The Securities are not subject to redemption at the option of the Company. ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE SECTION 1201. OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. The Company may, at its option by Board Resolution, at any time, with respect to the Securities, elect to have either Section 1202 or Section 1203 be applied to all Outstanding Securities upon compliance with the conditions set forth below in this Article Twelve. SECTION 1202. DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 1201 of the option applicable to this Section 1202, the Company shall be deemed to have been discharged from its obligations with respect to all Outstanding Securities on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 1205 and the other Sections of this Indenture referred to in (A) and (B) below, and to have satisfied all its other obligations under such Securities and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities to receive solely from the trust fund described in Section 1204 and as more fully set forth in such Section, payments in respect of the principal of and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (D) this Article Twelve. Subject to compliance with this Article Twelve, the Company may exercise its option under this Section 1202 notwithstanding the prior exercise of its option under Section 1203 with respect to the Securities. 84 76 SECTION 1203. COVENANT DEFEASANCE. Upon the Company's exercise under Section 1201 of the option applicable to this Section 1203, the Company shall be released from its obligations under any covenant contained in Article Eight and in Sections 1004 through 1012 with respect to the Outstanding Securities on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Securities shall thereafter be deemed to be not "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "Outstanding" for all other purposes hereunder (it being understood that such Securities shall not be deemed Outstanding for financial accounting purposes). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under Section 501(c), but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. In addition, upon the Company's exercise under Section 1201 of the option applicable to Section 1203, Sections 501(c) through 501(e) shall not constitute Events of Default. SECTION 1204. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following shall be the conditions to application of either Section 1202 or Section 1203 to the Outstanding Securities: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 608 who shall agree to comply with the provisions of this Article Twelve applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) cash in U.S. Dollars in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, cash in U.S. Dollars in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of and interest on the Outstanding Securities on the Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to the Outstanding Securities on the day on which such payments are due and payable in accordance with 85 77 the terms of this Indenture and of such Securities; provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Securities. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. (2) No Default or Event of Default with respect to the Securities shall have occurred and be continuing on the date of such deposit or, insofar as Subsection 501(f) or 501(g) is concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period). (3) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound. (4) In the case of an election under Section 1202, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since March 22, 2001, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. (5) In the case of an election under Section 1203, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States to the effect that the 86 78 Holders of the Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred. (6) In the case of an election under either Section 1202 or 1203, the Company shall represent to the Trustee that the deposit made by the Company pursuant to its election under Section 1202 or 1203 was not made by the Company with the intent of preferring the Holders over other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others. (7) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel in the United States, each stating that all conditions precedent provided for relating to either the defeasance under Section 1202 or the covenant defeasance under Section 1203 (as the case may be) have been complied with. SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in respect of the Outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal and interest, but such money need not be segregated from other funds except to the extent required by law. Money and U.S. Government Obligations so held in trust are not subject to Article Twelve. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 1204 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities. Anything in this Article Twelve to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1204 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 1204(1)), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance. 87 79 SECTION 1206. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money in accordance with Section 1202 or 1203, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 1202 or 1203, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1202 or 1203, as the case may be; provided, however, that, if the Company makes any payment of principal of or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. * * * * * 88 80 This Indenture may be signed in any number of counterparts with the same effect as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this Indenture. 89 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. CSC HOLDINGS, INC. By: /s/ William J. Bell -------------------------------------- Name: William J. Bell Title: Vice Chairman Attest: /s/ Robert S. Lemle - --------------------------------------------------- Name: Robert S. Lemle Title: Vice Chairman, General Counsel and Secretary 90 THE BANK OF NEW YORK By: /s/ Julie Salovitch-Miller -------------------------------------- Name: Julie Salovitch-Miller Title: Vice President 91 EXHIBIT A RESTRICTED SUBSIDIARIES(1) (* - material subsidiary) 151 Fulton Street Corporation A-R Cable Services - NY, Inc. Arsenal MSub 2 Inc. Cablevision Area 9 Corporation Cablevision Fairfield Corporation Cablevision Lightpath, Inc. Cablevision MFR, Inc. Cablevision of Brookhaven, Inc. Cablevision of Brookline, Inc. Cablevision of Cleveland G.P., Inc. Cablevision of Cleveland L.P., Inc. Cablevision of Cleveland, L.P. Cablevision of Connecticut Corporation Cablevision of Connecticut Limited Partnership Cablevision of Hudson County, Inc. Cablevision of Litchfield, Inc. Cablevision of Monmouth, Inc. Cablevision of New Jersey, Inc. Cablevision of Newark Cablevision of Oakland, Inc. Cablevision of Ossining Limited Partnership (f/k/a Cablevision of Brookline LP) Cablevision of Paterson, Inc. Cablevision of Rockland/Ramapo, Inc. Cablevision of Southern Westchester, Inc. Cablevision of the Midwest Holding, Inc. Cablevision of Wappingers Falls, Inc. (f/k/a Cablevision of Boston, Inc.) Cablevision of Warwick, Inc. Cablevision Systems Brookline Corporation Cablevision Systems Dutchess Corporation Cablevision Systems East Hampton Corporation Cablevision Systems Great Neck Corporation Cablevision Systems Huntington Corporation Cablevision Systems Islip Corporation Cablevision Systems Long Island Corporation * Cablevision Systems New York City Corporation (f/k/a NYC LP Corp.) Cablevision Systems of Southern Connecticut Limited Partnership Cablevision Systems Suffolk Corporation Cablevision Systems Westchester Corporation 92 Communications Development Corporation CSC Acquisition - MA, Inc. CSC Acquisition - NY, Inc. CSC Acquisition Corporation CSC Gateway Corporation CSC TKR, Inc. CSC TKR I, Inc. KRC/CCC Investment Partnership Montague Cable Company, Inc. Petra Cablevision Corporation Samson Cablevision Corp. Suffolk Cable Corporation Suffolk Cable of Shelter Island, Inc. Suffolk Cable of Smithtown, Inc. Telerama, Inc. 93 EXHIBIT B FORM OF REGISTRATION RIGHTS AGREEMENT EX-5.1 5 y48336ex5-1.txt OPINION OF SULLIVAN & CROMWELL 1 EXHIBIT 5.1 April 26, 2001 CSC Holdings, Inc., 1111 Stewart Avenue, Bethpage, New York 11714. Ladies and Gentlemen: In connection with the registration under the Securities Act of 1933 (the "Act") of $1,000,000,000 principal amount of 7 5/8% Series B Senior Notes due 2011 (the "Securities") of CSC Holdings, Inc., a Delaware corporation (the "Company"), we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. Upon the basis of such examination, we advise you that, in our opinion, when the Registration Statement has become effective under the Act and the Securities have been duly executed and authenticated in accordance with the Indenture relating to the Securities and issued and delivered as contemplated in the Registration Statement, the Securities will constitute valid and legally binding 2 CSC Holdings, Inc. -2- obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The foregoing opinion is limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. We have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible, and we have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee thereunder, an assumption which we have not independently verified. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading "Validity of the New Notes" in the Prospectus. In giving such consent, we do not 3 CSC Holdings, Inc. -3- thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, SULLIVAN & CROMWELL EX-8.1 6 y48336ex8-1.txt OPINION RE TAX MATTERS 1 EXHIBIT 8.1 April 27, 2001 CSC Holdings, Inc., 1111 Stewart Avenue, Bethpage, New York 11714. Re: Form S-4 Registration Statement Ladies and Gentlemen: We have acted as your counsel in connection with the Registration Statement on Form S-4 filed on the date hereof with the Securities and Exchange Commission (the "Registration Statement") and hereby confirm to you that, in our opinion, the discussion under the heading "Material U.S. Federal Income Tax Considerations" in the Registration Statement accurately describes the United States federal income tax considerations associated with the exchange of the old notes for the new notes pursuant to the exchange offer described in the Registration Statement. We hereby consent to the filing with the Securities and Exchange Commission of this letter as an exhibit to the Registration Statement and all amendments thereto. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, SULLIVAN & CROMWELL EX-23.1 7 y48336ex23-1.txt CONSENT OF KPMG LLP 1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS The Boards of Directors CSC Holdings, Inc.: We consent to the incorporation by reference in the registration statement on Form S-4 of CSC Holdings, Inc., of our report dated March 29, 2001, relating to the consolidated financial statements and schedule of CSC Holdings, Inc. and subsidiaries as of December 31, 2000 and 1999 and for each of the years in the three-year period ended December 31, 2000, which report appears in the December 31, 2000 combined Annual Report on Form 10-K of CSC Holdings, Inc. and Cablevision Systems Corporation, and to the references to our firm under the headings "Selected Financial Data" and "Experts" in the registration statement. /s/ KPMG LLP KPMG LLP Melville, New York April 25, 2001 EX-25.1 8 y48336ex25-1.txt STATEMENT OF ELIGIBILITY 1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) CSC HOLDINGS, INC. (Exact name of obligor as specified in its charter) Delaware 11-2776686 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1111 Stewart Avenue Bethpage, New York 11714 (Address of principal executive offices) (Zip code) ------------- 7 5/8% Series B Senior Notes (Title of the indenture securities) ================================================================================ 1 2 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- ------------------------------------------------------------------------------------- Name Address - ------------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 2. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 3. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 4. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. 2 3 SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of April, 2001. THE BANK OF NEW YORK By: /s/ THOMAS E. TABOR ------------------------------- Name: THOMAS E. TABOR Title: ASSISTANT VICE PRESIDENT 3 4 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .................... $ 3,083,720 Interest-bearing balances ............................................. 4,949,333 Securities: Held-to-maturity securities ........................................... 740,315 Available-for-sale securities ......................................... 5,328,981 Federal funds sold and Securities purchased under agreements to resell ... 5,695,708 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 36,590,456 LESS: Allowance for loan and lease losses ............................. 598,536 LESS: Allocated transfer risk reserve ................................. 12,575 Loans and leases, net of unearned income, allowance, and reserve ...... 35,979,345 Trading Assets ........................................................... 11,912,448 Premises and fixed assets (including capitalized leases) ................. 763,241 Other real estate owned .................................................. 2,925 Investments in unconsolidated subsidiaries and associated companies ...... 183,836 Customers' liability to this bank on acceptances outstanding ............. 424,303 Intangible assets ........................................................ 1,378,477 Other assets ............................................................. 3,823,797 ------------ Total assets ............................................................. $ 74,266,429 ============
5 LIABILITIES Deposits: In domestic offices ..................................................... $ 28,328,548 Noninterest-bearing ..................................................... 12,637,384 Interest-bearing ........................................................ 15,691,164 In foreign offices, Edge and Agreement subsidiaries, and IBFs ........... 27,920,690 Noninterest-bearing ..................................................... 470,130 Interest-bearing ........................................................ 27,450,560 Federal funds purchased and Securities sold under agreements to repurchase.. 1,437,916 Demand notes issued to the U.S.Treasury .................................... 100,000 Trading liabilities ........................................................ 2,049,818 Other borrowed money: With remaining maturity of one year or less ............................. 1,279,125 With remaining maturity of more than one year through three years ....... 0 With remaining maturity of more than three years ........................ 31,080 Bank's liability on acceptances executed and outstanding ................... 427,110 Subordinated notes and debentures .......................................... 1,646,000 Other liabilities .......................................................... 4,604,478 ------------ Total liabilities .......................................................... $ 67,824,765 ============ EQUITY CAPITAL Common stock ............................................................... 1,135,285 Surplus .................................................................... 1,008,775 Undivided profits and capital reserves ..................................... 4,308,492 Net unrealized holding gains (losses) on available-for-sale securities ..... 27,768 Accumulated net gains (losses) on cash flow hedges ......................... 0 Cumulative foreign currency translation adjustments ........................ (38,656) ------------ Total equity capital ....................................................... 6,441,664 ------------ Total liabilities and equity capital ....................................... $ 74,266,429 ============
6 I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Alan R. Griffith Directors Gerald L. Hassell EX-99.1 9 y48336ex99-1.txt FORM OF LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 LETTER OF TRANSMITTAL FOR 7 5/8% SENIOR NOTES OF CSC HOLDINGS, INC. PURSUANT TO THE EXCHANGE OFFER IN RESPECT OF ALL OF ITS OUTSTANDING 7 5/8% SENIOR NOTES DUE 2011 FOR 7 5/8% SERIES B SENIOR NOTES DUE 2011 --------------- PURSUANT TO THE PROSPECTUS DATED MAY __, 2001 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [DATE] UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE. The Exchange Agent For The Exchange Offer Is: THE BANK OF NEW YORK
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail: (Eligible Institutions Only) The Bank of New York The Bank of New York 101 Barclay Street (212) 815-5915 101 Barclay Street - 21W Corporate Trust Services Window New York, New York 10286 21W To Confirm by Telephone Attention: Santino Ginocchetti, Attention: Santino Ginocchetti or for Information Call: Corporate Trust Services Window (212) 815-6331
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. 2 By execution hereof, the undersigned acknowledges receipt of the Prospectus (the "Prospectus"), dated May __, 2001, of CSC Holdings, Inc., a Delaware corporation (the "Company"), which, together with this Letter of Transmittal and the instructions hereto (the "Letter of Transmittal"), constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 7 5/8% Series B Senior Notes due 2011 (the "New Notes") that have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus constitutes a part, for each $1,000 principal amount of its outstanding 7 5/8% Senior Notes due 2011 (the "Old Notes"), upon the terms and subject to the conditions set forth in the Prospectus. This Letter of Transmittal is to be used by Holders if: (1) certificates representing Old Notes are to be physically delivered to the Exchange Agent herewith by Holders; (2) tender of Old Notes is to be made by book-entry transfer to the Exchange Agent's account at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in the Prospectus under "How to Tender Your Old Notes--Procedures for Tendering" by any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Notes (such participants, acting on behalf of Holders, are referred to herein, together with such Holders, as "Acting Holders"); or (3) tender of Old Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under "How to Tender Your Old Notes--Guaranteed Delivery Procedures." DELIVERY OF DOCUMENTS TO THE BOOK- ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The term "Holder" with respect to the Exchange Offer means any person: (1) in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered Holder; or (2) whose Old Notes are held of record by DTC who desires to deliver such Old Notes by book-entry transfer at DTC. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this letter in its entirety. All capitalized terms used herein and not defined herein shall have the meaning ascribed to them in the Prospectus. The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent. See Instruction 6 herein. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. -2- 3 List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, list the certificate numbers and principal amounts on a separately executed schedule and affix the schedule to this Letter of Transmittal. Tenders of Old Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof.
- ----------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES - ----------------------------------------------------------------------------------------- CERTIFICATE AGGREGATE NUMBER(S)* PRINCIPAL (ATTACH SIGNED AMOUNT NAME(S) AND ADDRESS(ES) OF HOLDER(S) LIST IF NECESSARY) TENDERED (IF LESS (PLEASE FILL IN, IF BLANK) THAN ALL) ** - ----------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------- TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED ========================================================================================= * Need not be completed by Holders tendering by book-entry transfer. ** Need not be completed by Holders who wish to tender with respect to all Old Notes listed. See Instruction 2. - -----------------------------------------------------------------------------------------
-3- 4 [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ----------------------------------------- DTC Book-Entry Account No.: -------------------------------------------- Transaction Code No.: -------------------------------------------------- If Holders desire to tender Old Notes pursuant to the Exchange Offer and (1) certificates representing such Old Notes are not lost but are not immediately available, (2) time will not permit this Letter of Transmittal, certificates representing such Old Notes or other required documents to reach the Exchange Agent prior to the Expiration Date or (3) the procedures for book-entry transfer cannot be completed prior to the Expiration Date, such Holders may effect a tender of such Old Notes in accordance with the guaranteed delivery procedures set forth in the Prospectus under "How to Tender Your Old Notes--Guaranteed Delivery Procedures." [ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Holder(s) of Old Notes: ------------------------------------- Window Ticket No. (if any): -------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------------------- Name of Eligible Institution that Guaranteed Delivery: ----------------- If Delivered by Book-Entry Transfer: Name of Tendering Institution: -------------------------------- DTC Book-Entry Account No.: ----------------------------------- Transaction Code No.: ----------------------------------------- [ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE. -4- 5 [ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ------------------------------------------------------------------ Address: --------------------------------------------------------------- -5- 6 Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company, the above described aggregate principal amount of the Company's 7 5/8% Senior Notes due 2011 (the "Old Notes") in exchange for a like aggregate principal amount of the Company's 7 5/8% Series B Senior Notes due 2011 (the "New Notes") which have been registered under the Securities Act upon the terms and subject to the conditions set forth in the Prospectus dated May __, 2001 (as the same may be amended or supplemented from time to time, the "Prospectus"), receipt of which is acknowledged, and in this Letter of Transmittal (which, together with the Prospectus, constitute the "Exchange Offer"). Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and as Trustee under the Indenture for the Old Notes and the New Notes) with respect to the tendered Old Notes with full power of substitution to (1) deliver certificates for such Old Notes to the Company, or transfer ownership of such Old Notes on the account books maintained by DTC, together in either such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company and (2) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest. The undersigned hereby represents and warrants that he or she has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are acquired by the Company. The undersigned also acknowledges that this Exchange Offer is being made in reliance upon an interpretation by the staff of the Securities and Exchange Commission that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for sale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such New Notes are acquired in the ordinary course of such holder's business and such holders have no arrangement with any person to participate in the distribution of such New Notes. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the New Notes. The undersigned will upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the assignment and transfer of the Old Notes tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Notes when, and as if the Company has given oral or written notice thereof to the Exchange Agent. If any tendered Old Notes are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Notes will be returned (except as noted below with respect to tenders through DTC), without expense, to the undersigned at the address shown below or at a different address shown below or at a different address as may be indicated under "Special Issuance Instructions" as promptly as practicable after the Expiration Date. -6- 7 All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned and every obligation under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that tenders of Old Notes pursuant to the procedures described under the caption "How to Tender Your Old Notes--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated under "Special Issuance Instructions," please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned (or in either such event in the case of Old Notes tendered by DTC, by credit to the account at DTC). Similarly, unless otherwise indicated under "Special Delivery Instructions," please send the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signatures, unless, in either event, tender is being made through DTC. In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged in the name(s) of, and send said certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered. BY TENDERING OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (1) THE UNDERSIGNED IS NOT AN "AFFILIATE" OF CSC HOLDINGS, INC., (2) ANY NEW NOTES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (3) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW NOTES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (4) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW NOTES. BY TENDERING OLD NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (a) SUCH OLD NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (b) SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT). THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN EXCHANGE FOR OLD NOTES, WHERE SUCH OLD NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW NOTES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF -7- 8 NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW NOTES, IT SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW NOTES BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW NOTES OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE. THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN SUCH BOX. -8- 9 PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD NOTES REGARDLESS OF WHETHER OLD NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH) This Letter of Transmittal must be signed by the Holder(s) of Old Notes exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if tendered by a participant in DTC, exactly as such participant's name appears on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below under "Capacity" and submit evidence satisfactory to the Company of such person's authority to so act. See Instruction 3 herein. If the signature appearing below is not of the registered Holder(s) of the Old Notes, then the registered Holder(s) must sign a valid proxy. X . . . . . . . . . . . . . . . . . . . . . Date: . . . . . . . . . . . . . X . . . . . . . . . . . . . . . . . . . . . Date: . . . . . . . . . . . . . SIGNATURE(S) OF HOLDER(S) OR AUTHORIZED SIGNATORY Name(s): . . . . . . . . . . . . . . . . Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (PLEASE PRINT) (INCLUDING ZIP CODE) Capacity: . . . . . . . . . . . . . . . Area Code and Telephone No.:. . . . . . Social Security No.: . . . . . . . . . SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN) Certain Signatures Must Be Guaranteed by an Eligible Institution ................................................................................ (NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES) ................................................................................ (ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE) OF FIRM) ................................................................................ (AUTHORIZED SIGNATURE) ................................................................................ (PRINTED NAME) ................................................................................ (TITLE) Date: . . . . . . . . . . . . . - -------------------------------------------------------------------------------- -9- 10 - -------------------------------------------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTION 4 HEREIN) To be completed ONLY if certificates for Old Notes in a principal amount not tendered are to be issued in the name of, or the New Notes issued pursuant to the Exchange Offer are to be issued to the order of, someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or issued to an address different from that shown in the box entitled "Description of Old Notes" within this Letter of Transmittal, or if Old Notes tendered by book-entry transfer that are not accepted for purchase are to be credited to an account maintained at DTC. Name: .......................................................................... (PLEASE PRINT) Address: ....................................................................... (PLEASE PRINT) ................................................................................ ZIP CODE ................................................................................ TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTION 4 HEREIN) To be completed ONLY if certificates for Old Notes in a principal amount not tendered or not accepted for purchase or the New Notes issued pursuant to the Exchange Offer are to be sent to someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or to an address different from that shown in the box entitled "Description of Old Notes" within this Letter of Transmittal. Name: .......................................................................... (PLEASE PRINT) Address: ....................................................................... (PLEASE PRINT) ................................................................................ ZIP CODE ................................................................................ TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER - -------------------------------------------------------------------------------- -10- 11 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER AND THE SOLICITATION 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The certificates for the tendered Old Notes (or a confirmation of a book-entry transfer into the Exchange Agent's account at DTC of all Old Notes delivered electronically), as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to 5:00 P.M., New York City time, on the Expiration Date. The method of delivery of the tendered Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder and, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Old Notes should be sent to the Company. Holders who wish to tender their Old Notes and (1) whose Old Notes are not immediately available or (2) who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Old Notes and follow the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedures: (1) such tender must be made by or through an Eligible Institution; (2) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder of the Old Notes, the certificate number or numbers of such Old Notes and the principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the Expiration Date, this Letter of Transmittal (or facsimile thereof) together with the certificate(s) representing the Old Notes (or a confirmation of electronic delivery of book-entry delivery into the Exchange Agent's account at DTC) and any of the required documents will be deposited by the Eligible Institution with the Exchange Agent; and (3) such properly completed and executed Letter of Transmittal (or facsimile hereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Old Notes in proper form for transfer (or a confirmation of electronic mail delivery of book-entry delivery into the Exchange Agent's account at DTC), must be received by the Exchange Agent within five business days after the Expiration Date, all as provided in the Prospectus under the caption "How to Tender Your Old Notes--Guaranteed Delivery Procedures." Any Holder of Old Notes who wishes to tender his Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 P.M., New York City time, on the Expiration Date. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For Old Notes to be properly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein) (1) a bank; (2) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (3) a credit union; (4) a national securities exchange, registered securities association or clearing agency; or (5) a savings association that is a participant in a Securities Transfer Association. THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS ARE AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN -11- 12 ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering Holders of Old Notes, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 2. PARTIAL TENDERS; WITHDRAWAL RIGHTS. Tenders of Old Notes will be accepted in all denominations of $1,000 and integral multiples in excess thereof. If less than the entire principal amount of any Old Notes is tendered, the tendering Holder should fill in the principal amount tendered in the third column of the chart entitled "Description of Old Notes." The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, Old Notes for the principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, Old Notes for the principal amount of Old Notes not tendered and a certificate or certificates representing New Notes issued in exchange of any Old Notes accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal or unless tender is made through DTC, promptly after the Old Notes are accepted for exchange. Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written, telegraphic, telex or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth above or in the Prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Notes to be withdrawn, the aggregate principal amount of Old Notes to be withdrawn, and (if Certificates for Old Notes have been tendered) the name of the registered holder of the Old Notes as set forth on the certificate for the Old Notes, if different from that of the person who tendered such Old Notes. If certificates for the Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such certificates for the Old Notes, the tendering holder must submit the serial numbers shown on the particular certificates for the Old Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Notes tendered for the account of an Eligible Institution. If Old Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under "How to Tender Your Old Notes--Procedures for Tendering," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Old Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or -12- 13 facsimile transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "How to Tender Your Old Notes--Procedures for Tendering." 3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Notes without alternation, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of Old Notes tendered and the certificate(s) for New Notes issued in exchange therefor is to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered Holder, such Holder need not and should not endorse any tendered Old Note, nor provide a separate bond power. In any other case, such holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder(s) of any Old Notes listed, such Old Notes must be endorsed or accompanied by appropriate bond powers signed as the name of the registered Holder(s) appears on the Old Notes. If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Letter of Transmittal. Endorsements on Old Notes or signatures on bond powers required by this Instruction 3 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal (or facsimile hereof) must be guaranteed by an Eligible Institution unless the Old Notes tendered pursuant thereto are tendered (1) by a registered Holder (including any participant in DTC whose name appears on a security position listing as the owner of Old Notes) who has not completed the box set forth herein entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" or (2) for the account of an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable spaces, the name and address to which New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal (or in the case of tender of the Old Notes through DTC, if different from DTC). In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 5. IRREGULARITIES. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Old Notes, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for which, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under "The Exchange Offer--Terms of the Exchange Offer" or any conditions or irregularity in any tender of Old Notes of any particular holder whether or not similar conditions or irregularities are -13- 14 waived in the case of other holders. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Old Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. The Company, any affiliates or assigns of the Company, the Exchange Agent, or any other person shall not be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification. 6. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter of Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee. 7. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend, waive or modify specified conditions in the Exchange Offer in the case of any Old Notes tendered. 8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instruction. 9. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Notes tendered, or if a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. (DO NOT WRITE IN SPACE BELOW)
============================================================================================== Certificate Surrendered Old Notes Tendered Old Notes Accepted Delivery Prepared by ________________ Checked by __________________ Date ___________ ==============================================================================================
-14- 15 The Exchange Agent for the Exchange Offer is: The Bank of New York
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail: (Eligible Institutions Only) The Bank of New York The Bank of New York 101 Barclay Street (212) 815-5915 101 Barclay Street - 21W Corporate Trust Services Window New York, New York 10286 21W To Confirm by Telephone Attention: Santino Ginocchetti, Attention: Santino Ginocchetti or for Information Call: Corporate Trust Services Window (212) 815-6331
-15- EX-99.2 10 y48336ex99-2.txt FORM OF NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF ANY AND ALL OUTSTANDING 7 5/8% SENIOR NOTES DUE 2011 OF CSC HOLDINGS, INC. As set forth in the Prospectus, dated May __, 2001 (the "Prospectus"), of CSC Holdings, Inc. (the "Company"), in the accompanying Letter of Transmittal and instructions thereto (the "Letter of Transmittal"), this form or one substantially equivalent hereto must be used to accept the Company's exchange offer (the "Exchange Offer") to purchase all of its outstanding 7 5/8% Senior Notes due 2011 (the "Old Notes") if (1) certificates representing the Old Notes to be tendered for purchase and payment are not lost but are not immediately available, (2) time will not permit the Letter of Transmittal, certificates representing such Old Notes or other required documents to reach the Exchange Agent prior to the Expiration Date or (3) the procedures for book-entry transfer cannot be completed prior to the Expiration Date. This form may be delivered by an Eligible Institution by mail or hand delivery or transmitted, via telegram, telex or facsimile, to the Exchange Agent as set forth below. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "How to Tender Your Old Notes--Guaranteed Delivery Procedures" in the Prospectus. In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal relating to the Old Notes (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Prospectus. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [DATE] UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE. - -------------------------------------------------------------------------------- The Exchange Agent: THE BANK OF NEW YORK
By Registered or Certified Mail: Facsimile Transmissions: By Hand or Overnight Delivery: (Eligible Institutions Only) The Bank of New York (212) 815-5915 The Bank of New York 101 Barclay Street - 21W 101 Barclay Street New York, New York 10286 Confirm by Telephone Corporate Trust Services Window Attn: Santino Ginocchetti, or for Information Call 21W Corporate Trust Services (212) 815-6331 New York, New York 10286 Window Attention: Santino Ginocchetti
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 Ladies and Gentlemen: The undersigned hereby tender(s) to the Company, upon the terms and subject to the conditions set forth in the Exchange Offer and the Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus. The undersigned understands that tenders of Old Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned understands that tenders of Old Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 P.M., New York City time on the Business Day prior to the Expiration Date. Tenders of Old Notes may also be withdrawn if the Exchange Offer is terminated without any such Old Notes being purchased thereunder or as otherwise provided in the Prospectus. All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned. PLEASE SIGN AND COMPLETE
Signature(s) of Registered Owner(s) or Authorized Signatory: Name(s) of Registered Holder(s): ------ - ------------------------------------------------------------------ ---------------------------------------------- - ------------------------------------------------------------------ ---------------------------------------------- - ------------------------------------------------------------------ ---------------------------------------------- Principal Amount of Old Notes Tendered: Address:-------------------------------------- -------------------------- - ------------------------------------------------------------------ ---------------------------------------------- Certificate No(s). of Old Notes (if available): Area Code and Telephone No.: ------------------ ------------------ - ------------------------------------------------------------------ If Old Notes will be delivered by book-entry - ------------------------------------------------------------------ transfer at The Depository Trust Company, insert, Depository Account No.: --------------- Date: ------------------------------------------------------------
- -------------------------------------------------------------------------------- This Notice of Guaranteed Delivery must be signed by the registered holder(s) of Old Notes exactly as its (their) name(s) appear on certificates for Old Notes or on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information. Please print name(s) and address(es) Name(s): ------------------------------------------------------------------------ ------------------------------------------------------------------------ Capacity: ----------------------------------------------------------------------- Address(es): -------------------------------------------------------------------- -------------------------------------------------------------------- -------------------------------------------------------------------- DO NOT SEND OLD NOTES WITH THIS FORM. NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL. - -------------------------------------------------------------------------------- -2- 3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (1) a bank; (2) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker, government securities dealer; (3) a credit union; (4) a national securities exchange, registered securities association or learning agency; or (5) a savings association that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at The Depository Trust Company, pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and any other required documents within five business days after the date of execution of this Notice of Guaranteed Delivery. THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL AND OLD NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD SET FORTH ABOVE AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE UNDERSIGNED. Name of Firm: ------------------------- -------------------------------- Authorized Signature Address: Name: ----------------------------- --------------------------- - -------------------------------------- Title: --------------------------- Area Code and Telephone No.: Date: --------- --------------------------- NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL. - -------------------------------------------------------------------------------- -3- EX-99.3 11 y48336ex99-3.txt FORM OF EXCHANGE AGENT AGREEMENT 1 EXHIBIT 99.3 EXCHANGE AGENT AGREEMENT May __, 2001 The Bank of New York Corporate Trust Trustee Administration 101 Barclay Street - 21st Floor New York, New York 10286 Ladies and Gentlemen: CSC Holdings, Inc., a Delaware corporation (the "Company"), has made an offer (the "Exchange Offer") to exchange its 7 5/8% Senior Notes due 2011 (the "Existing Notes") for 7 5/8% Series B Senior Notes due 2011 (the "New Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus, dated May __, 2001 (the "Prospectus"), proposed to be distributed to all record holders of the Existing Notes. The Existing Notes and the New Notes are collectively referred to herein as the "Notes." The Company hereby appoints The Bank of New York to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Bank of New York. The Exchange Offer is expected to be commenced by the Company on or about May __, 2001. The Letter of Transmittal accompanying the Prospectus (or in the case of book entry securities, the ATOP system) is to be used by the holders of the Existing Notes to accept the Exchange Offer and contains instructions with respect to the delivery of certificates for Existing Notes tendered in connection therewith. The Exchange Offer shall expire at 5:00 P.M., New York City time, on the 30th day following its commencement or on such later date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (confirmed in writing) or written notice to you before 9:00 A.M., New York City time, on the business day following the previously scheduled Expiration Date. The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Existing Notes not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer -- Expiration Date" and "The Exchange Offer--We Can Amend or Extend the Exchange Offer." The Company shall give oral (confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 2 1. You will perform such duties and only such duties as are specifically set forth in the sections of the Prospectus captioned "The Exchange Offer" and "How to Tender Your Old Notes," in the Letter of Transmittal accompanying the Prospectus or as specifically set forth herein; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish an account with respect to the Existing Notes at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Existing Notes by causing the Book-Entry Transfer Facility to transfer such Existing Notes into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. You are to examine each of the Letters of Transmittal and certificates for Existing Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Existing Notes to ascertain whether: (a) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and (b) the Existing Notes have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Existing Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be necessary or advisable to cause such irregularity to be corrected. 4. With the approval of the President, Vice Chairman, Senior Vice President, Executive Vice President or any Vice President of the Company, or of counsel to the Company or any other party designated by any officer named in this Paragraph 4 (such approval, if given orally, to be confirmed in writing), you are authorized to waive any irregularities in connection with any tender of Existing Notes pursuant to the Exchange Offer. 5. Tenders of Existing Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "How to Tender Your Old Notes--Procedures for Tendering," and Existing Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this paragraph 5, Existing Notes that the President, Vice Chairman, Senior Vice President, Executive Vice President or any Vice President of the Company shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be confirmed in writing). 6. You shall advise the Company with respect to any Existing Notes received subsequent to the Expiration Date and accept its instructions with respect to disposition of such Existing Notes. -2- 3 7. You shall accept tenders: (a) in cases where the Existing Notes are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Existing Notes provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Existing Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Existing Notes to the transfer agent for split-up and return any untendered Existing Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice if given orally, to be confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Existing Notes properly tendered and you, on behalf of the Company, will exchange Existing Notes duly tendered for New Notes on the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal. Delivery of New Notes will be made on behalf of the Company by you at the rate of $1,000 principal amount of New Notes for each $1,000 principal amount of Existing Notes tendered as soon as practicable after notice (such notice if given orally, to be confirmed in writing) of acceptance of said Existing Notes by the Company; provided, however, that in all cases, Existing Notes tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Existing Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other required documents. Unless otherwise instructed by the Company, you shall issue New Notes only in denominations of $1,000 or any integral multiple thereof. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Existing Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. 10. The Company shall not be required to exchange any Existing Notes tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company not to exchange any Existing Notes tendered shall be given (and confirmed in writing) by the Company to you. 11. If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Existing Notes tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "How to Tender Your Old Notes--Conditions" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Existing Notes (or effect appropriate book-entry transfer), together with any -3- 4 related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Existing Notes, unaccepted Existing Notes or for New Notes shall be forwarded by first-class certified mail, return receipt requested under a blanket surety bond protecting you and the Company from loss or liability arising out of the non-receipt or non-delivery of such certificates. 13. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) shall have no duties or obligations other than those specifically set forth in the sections of the Prospectus captioned "The Exchange Offer" and "How to Tender Your Old Notes," in the "Letter of Transmittal" accompanying the Prospectus or herein or as may be subsequently agreed to in writing by you and the Company; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Existing Notes represented thereby deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing; (c) shall not be obligated to take any legal action hereunder that might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity; (d) may reasonably rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties; (e) may reasonably act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or represented by a proper person or persons; (f) may rely on and shall be protected in acting upon written or oral instructions from any officer of the Company; (g) may consult with your counsel with respect to any questions relating to your duties and responsibilities and the written opinion of such counsel shall be full and complete -4- 5 authorization and protection in respect of any action taken, suffered or omitted to be taken by you hereunder in good faith and in accordance with the written opinion of such counsel; and (h) shall not advise any person tendering Existing Notes pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Existing Notes. 15. You shall take such action as may from time to time be requested by the Company or its counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms as may be approved from time to time by the Company, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents at your request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: Secretary. 16. You shall advise by facsimile transmission or telephone, and promptly thereafter confirm in writing to the Company and such other person or persons as it may request, daily (and more frequently during the week immediately preceding the Expiration Date and if otherwise requested) up to and including the Expiration Date, as to the amount of Existing Notes that have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons upon oral request made from time to time prior to the Expiration Date of such other information as it or he reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Existing Notes tendered, the aggregate principal amount of Existing Notes accepted and deliver said list to the Company. 17. Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and the time of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities. You shall dispose of unused Letters of Transmittal and other surplus materials as instructed by the Company. 18. You hereby expressly waive any lien, encumbrance or right of set-off whatsoever that you may have with respect to funds deposited with you for the payment of transfer taxes by reasons of amounts, if any, borrowed by the Company, or any of its subsidiaries or affiliates pursuant to any loan or credit agreement with you or for compensation owed to you hereunder. 19. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as set forth in Schedule I attached hereto. -5- 6 20. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal and further acknowledge that you have examined each of them. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to the duties, liabilities and indemnification of you as Exchange Agent which shall be controlled by this Agreement. 21. The Company covenants and agrees to indemnify and hold you in your capacity as Exchange Agent hereunder harmless against any loss, liability, cost or expense, including reasonable attorneys' fees arising out of or in connection with any act, omission, delay or refusal made by you in reasonable reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Existing Notes reasonably believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Existing Notes; provided, however, that the Company shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your gross negligence, willful misconduct or bad faith. In no case shall the Company be liable under this indemnity with respect to any claim against you unless the Company shall be notified by you, by letter or facsimile confirmed by letter, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or notice of connection of action. The Company shall be entitled to participate at its own expense in the defense of any such claim or other action, and, if the Company so elects, the Company shall assume the defense of any suit brought to enforce any such claim. In the event that the Company shall assume the defense of any such suit, the Company shall not be liable for the fees and expenses of any additional counsel thereafter retained by you, so long as the Company shall retain counsel reasonably satisfactory to you to defend such suit. 22. You shall comply with all requirements under the tax laws of the United States. 23. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Existing Notes, your check in the amount of all transfer taxes so payable, and the Company shall reimburse you for the amount of any and all transfer taxes payable by the Company in respect of the exchange of Existing Notes in accordance with the Section of the Prospectus captioned "How to Tender Your Old Notes--Fees and Expenses"; provided, however, that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you. 24. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto. 25. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. -6- 7 26. In case any provision of this Agreement 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. 27. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. 28. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: If to the Company: CSC Holdings, Inc. 1111 Stewart Avenue Bethpage, New York 11714 Facsimile: (516) 803-2577 Attention: Legal Department with a copy to: John P. Mead Sullivan & Cromwell 125 Broad Street New York, New York 10004 Facsimile: (212) 558-3588 If to the Exchange Agent: The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Facsimile: (212) 815-5915 Attention: Corporate Trust Administration 29. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates, funds or property then held by you as Exchange Agent under this Agreement. 30. This Agreement shall be binding and effective as of the date hereof. -7- 8 Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. CSC HOLDINGS, INC. By: __________________________ Name: Title: Accepted as of the date first above written. THE BANK OF NEW YORK, as Exchange Agent By: _________________________________ Name: Title: -8- 9 Schedule I EXCHANGE AGENT FEE . . . . . . . . . . . . . . . . . . . . . $[|-|] Services Include: - Receive and process Letters of Transmittal - Data entry and processing - Calculation of securities entitlement - Proof and control of presentations - Answer bondholder inquiries - Process guaranteed deliveries - Initiation of Certificate debit down to presenting bondholder account Extension Fee . . . . . . . . . . . . . . . . . . . . . . . . $ [|-|]/extension I-1 -----END PRIVACY-ENHANCED MESSAGE-----