Exhibit 10.02
$350,000,000 EXECUTION COPY
Adelphia Communications Corporation
9 7/8% Senior Notes due 2007
PURCHASE AGREEMENT
February 21, 1997
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell to
you, as the initial purchaser (the "Initial Purchaser"), $350,000,000 in
aggregate principal amount of its 9 7/8% Senior Notes due 2007 (the "Senior
Notes"). The Senior Notes will (i) have the terms and provisions which are
summarized in the Offering Memorandum (as defined herein), (ii) be in the forms
specified by the Initial Purchaser pursuant to Section 3 hereof, and (iii) be
issued pursuant to the provisions of an Indenture, to be dated as of February
26, 1997 (the "Indenture"), between the Company and Bank of Montreal Trust
Company, as trustee (the "Trustee").
The Company wishes to confirm as follows their agreement
with you the Initial Purchaser in connection with the
purchase and resale of the Senior Notes.
1. Preliminary Offering Memorandum and Offering
Memorandum. The Senior Notes will be offered and sold
to the Initial Purchaser without registration under the Securities Act of 1933,
as amended (the "Act"), in reliance on an exemption pursuant to Section 4(2)
under the Act. The Company has prepared a preliminary offering memorandum, dated
February 19, 1997, which includes the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1996 and Annual Report on Form 10-K for the
fiscal year ended March 31, 1996, as amended by Form 10-K/A dated July 29, 1996
(the "Preliminary Offering Memorandum"), and an offering memorandum, dated
February 21, 1997, which includes the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1996 and Annual Report on Form 10-K for the
fiscal year ended March 31, 1996, as amended by Form 10-K/A dated July 29, 1996
(the "Offering Memorandum"), setting forth information regarding the Company,
the Senior Notes and the Exchange Notes (as defined herein). Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, if any. The Company
hereby confirms that they have authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and
resale of the Senior Notes by the Initial Purchaser.
The Company understands that the Initial Purchaser proposes
to make offers (the "Exempt Resales") of the Senior
Notes purchased by the Initial Purchaser hereunder only on the terms set forth
in the Offering Memorandum, and Section 2 hereof, as soon as the Initial
Purchaser deems advisable after this Agreement has been executed and delivered,
solely to (i) persons whom the Initial Purchaser reasonably believes to be
"qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs")
and (ii) a limited number of other institutional "accredited investors," as
defined in Rule 501(a) (1), (2), (3) and (7) under the Act, that make the
representations and agreements to the Company specified in Annex A to the
Offering Memorandum (each, an "Accredited Institution") (such persons specified
in clauses (i) and (ii) being referred to herein as the "Eligible Purchasers").
It is understood and acknowledged that upon original
issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Senior Notes
(and all securities issued in exchange therefor, in substitution thereof) shall
bear the following legend:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (5) TO
AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
OTHER JURISDICTIONS."
It is also understood and acknowledged that holders
(including subsequent transferees) of the Senior Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Senior Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission")
under the circumstances set forth therein, (i) a registration statement under
the Act relating to the Company's 9 7/8% Senior Notes due 2007 (the "Exchange
Notes") to be offered in exchange for the Senior Notes (the "Registered Exchange
Offer") and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Act relating to the resale by certain holders of
the Senior Notes, and to use its best efforts to cause such registration
statements to be declared effective. As used herein, the Senior Notes and the
Exchange Notes are hereinafter referred to collectively as the "Notes." This
Agreement, the Indenture, the Notes and the Registration Rights Agreement are
hereinafter referred to collectively as the "Operative Documents."
2. Agreements to Sell, Purchase and Resell.
(a) The Company hereby agrees, on the basis of the
representations, warranties and agreements of the Initial Purchaser contained
herein and subject to all the terms and conditions set forth herein, to issue
and sell to the Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, the Initial Purchaser agrees to purchase
from the Company, at a purchase price of 97.75% of the principal amount thereof,
all of the Senior Notes. The Company shall not be obligated to deliver any of
the Senior Notes to be delivered hereunder except upon payment for all of the
Senior Notes to be purchased as provided herein.
The Initial Purchaser hereby represents and
warrants to the Company that it will offer the Senior
Notes for sale upon the terms and conditions set forth in this Agreement and in
the Offering Memorandum. The Initial Purchaser hereby represents and warrants
to, and agrees with, the Company that such Initial Purchaser (i) is either a QIB
or an Accredited Institution, in either case with such knowledge and experience
in financial and business matters as are necessary in order to evaluate the
merits and risks of an investment in the Senior Notes; (ii) is purchasing the
Senior Notes pursuant to a private sale exempt from registration under the Act;
(iii) in connection with the Exempt Resales, will solicit offers to buy the
Senior Notes only from, and will offer to sell the Senior Notes only to, the
Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the
Senior Notes, nor has it offered or sold the Senior Notes by, or otherwise
engaged in, any form of general solicitation or general advertising (within the
meaning of Regulation D; including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising) in connection with the offering of the Senior Notes. The Initial
Purchaser has advised the Company that the Initial Purchaser will initially
offer the Senior Notes to Eligible Purchasers at a price of 99.217% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance of the Senior Notes. Such price may be changed by the Initial Purchaser
at any time thereafter without notice.
The Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to the
Initial Purchaser pursuant to Sections 7(d) and 7(h) hereof, counsel to the
Company and counsel to the Initial Purchaser, will rely upon the accuracy and
truth of the foregoing representations, warranties and agreements and the
Initial Purchaser hereby consents to such reliance.
3. Delivery of the Notes and Payment Therefor.
Delivery to the Initial Purchaser of and payment for
the Senior Notes shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 A.M., New York City time,
on February 26, 1997 (the "Closing Date"). The place of closing for the Senior
Notes and the Closing Date may be varied by agreement between the Initial
Purchaser and the Company.
The Senior Notes will be delivered to the Initial Purchaser
against payment of the purchase price therefor in
immediately available funds. The Senior Notes will be evidenced by one or more
global securities in definitive form (the "Global Note") and/or by additional
definitive securities, and will be registered, in the case of the Global Note,
in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
and in the other cases, in such names and in such denominations as the Initial
Purchaser shall request prior to 9:30 A. M., New York City time, on the second
business day preceding the Closing Date. The Senior Notes to be delivered to the
Initial Purchaser shall be made available to the Initial Purchaser in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
4. Agreements of the Company. The Company agrees
with the Initial Purchaser as follows:
The Company will furnish to the Initial
Purchaser, without charge, such number of copies of the
Offering Memorandum as the Initial Purchaser may reasonably request.
The Company will not make any amendment or
supplement to the Preliminary Offering Memorandum or to
the Offering Memorandum of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object after
being so advised, including by way of filing any document with the Commission
that would be incorporated therein by reference.
Prior to the execution and delivery of this
Agreement, the Company shall have delivered or will
deliver to the Initial Purchaser, without charge, in such quantities as the
Initial Purchaser shall have requested or may hereafter reasonably request,
copies of the Preliminary Offering Memorandum. The Company consents to the use,
in accordance with the securities or Blue Sky laws of the jurisdictions in which
the Senior Notes are offered by the Initial Purchaser and by dealers, prior to
the date of the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Company. The Company consents to the use of the Offering
Memorandum in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Senior Notes are offered by the Initial Purchaser and
by all dealers to whom Senior Notes may be sold, in connection with the offering
and sale of the Senior Notes.
If, at any time prior to completion of the
distribution of the Senior Notes by the Initial Purchaser
to Eligible Purchasers, any event shall occur that in the judgment of the
Company, or in the opinion of counsel for the Initial Purchaser, should be set
forth in the Offering Memorandum in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Offering Memorandum in order to comply
with any law, the Company will forthwith prepare an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Initial Purchaser and
dealers a reasonable number of copies thereof.
The Company will cooperate with the Initial
Purchaser and with its counsel in connection with the
qualification of the Senior Notes for offering and sale by the Initial Purchaser
and by dealers under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
qualification; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Senior Notes, in any
jurisdiction where it is not now so subject.
So long as any of the Notes are outstanding, the
Company will furnish to the Initial Purchaser (i)
as soon as available, a copy of each report of the Company mailed to
stockholders generally or filed with any stock exchange or regulatory body and
(ii) from time to time such other information concerning the Company as the
Initial Purchaser may reasonably request.
If this Agreement shall terminate or shall be
terminated after execution and delivery pursuant to
any provisions hereof (otherwise than by notice given by the Initial Purchaser
terminating this Agreement pursuant to Section 10 hereof) or if this Agreement
shall be terminated by the Initial Purchaser because of any failure or refusal
on the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the Initial
Purchaser for all out-of-pocket expenses (including reasonable fees and expenses
of its counsel) reasonably incurred by it in connection herewith, but without
any further obligation on the part of the Company for loss of profits or
otherwise.
The Company will apply the net proceeds from the
sale of the Senior Notes to be sold by it hereunder substantially in accordance
with the description set forth in the Offering Memorandum under the caption
"Use of Proceeds."
Except as stated in this Agreement and in the
Preliminary Offering Memorandum and Offering
Memorandum, the Company has not taken, nor will any of them take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Senior Notes to
facilitate the sale or resale of the Senior Notes. Except as permitted by the
Act, the Company will not distribute any offering material in connection with
the Exempt Resales.
The Company will use its best efforts to permit
the Notes to be designated Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market and to permit
the Notes to be eligible for clearance and settlement through DTC.
From and after the Closing Date, so long as any
of the Notes are outstanding and are "restricted
securities" within the meaning of the Rule 144(a)(3) under the Act or, if
earlier, until three years after the Closing Date, and during any period in
which the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company will furnish
to holders of the Notes and prospective purchasers of Notes designated by such
holders, upon request of such holders or such prospective purchasers, the
information (the "Additional Company Information") required to be delivered
pursuant to Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in
connection with resales of the Notes.
The Company has complied and will comply with
all provisions of Florida Statutes Section 517.075
relating to issuers doing business with Cuba.
The Company agrees not to sell, offer for sale
or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Act) that would be integrated with
the sale of the Senior Notes in a manner that would require the registration
under the Act of the sale to the Initial Purchaser or the Eligible Purchasers of
the Senior Notes.
The Company agrees to comply with all the terms
and conditions of the Registration Rights Agreement
and all agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Notes by DTC for "book entry" transfer.
The Company agrees to cause the Exchange Offer
to be made in the appropriate form, as contemplated
by the Registration Rights Agreement, to permit registration of the Exchange
Notes to be offered in exchange for the Senior Notes, and to comply with all
applicable federal and state securities laws in connection with the Registered
Exchange Offer.
The Company agrees that prior to any
registration of the Senior Notes pursuant to the Registration
Rights Agreement, or at such earlier time as may be required, the Indenture
shall be qualified under the Trust Indenture Act of 1939 (the "1939 Act") and
any necessary supplemental indentures will be entered into in connection
therewith.
The Company will not voluntarily claim, and will
resist actively all attempts to claim, the benefit
of any usury laws against holders of the Notes.
The Company will do and perform all things
required or necessary to be done and performed under this
Agreement by it prior to the Closing Date, and to satisfy all conditions
precedent to the Initial Purchaser's obligations hereunder to purchase the
Senior Notes.
5. Representations and Warranties of the Company.
The Company represents and warrants to the Initial Purchaser that:
The Preliminary Offering Memorandum and the
Offering Memorandum have been prepared in connection
with the offering of the Senior Notes. The Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, and any
amendments or supplements thereto did not and will not, as of their
respective dates, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Initial Purchaser
concerning the Initial Purchaser expressly for use therein (the
"Initial Purchaser Information"). Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
The Company has not sustained since
December 31, 1996 any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum; and, since the respective
dates as of which information is given in the Offering Memorandum,
there has not been any reduction in the consolidated stockholders'
equity or change in the capital stock, as applicable (other than
reductions in the ordinary course of business consistent with prior
periods), material increase in the total amount of short-term debt
(excluding trade payables) and long-term debt of the Company or any
of its material subsidiaries (the "Subsidiaries") or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, partners' equity, shareholders' equity or results
of operations of the Company and its Subsidiaries, otherwise than as
set forth or contemplated in the Offering Memorandum;
Each of the Company and its Subsidiaries has
good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Offering Memorandum or
such as do not affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company and its Subsidiaries; and any real property and buildings
held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and
its Subsidiaries; except in any case that would not have a material
adverse effect on the business, general affairs, management,
financial position, partners equity or shareholders' equity (other
than reductions in the ordinary course of business consistent with
prior periods), results of operations or prospects of the Company and
its Subsidiaries, taken as a whole a "Material Adverse Effect";
(i) Each of the Subsidiaries that are
partnerships has been duly formed and is validly existing as
a partnership in good standing under the laws of its state of
formation, with full power and authority (partnership and other) to
own its properties and conduct its business as described in the
Offering Memorandum, and has been duly qualified as a foreign
partnership for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect; and (ii) each of the Company and the Subsidiaries
that are corporations has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
state of incorporation, with full power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect;
Each of the Company and its Subsidiaries has the
ownership or authorized capitalizations, as the
case may be, as set forth in the Offering Memorandum, and all of the
partnership interests of the Subsidiaries that are partnerships and
all of the issued shares of capital stock of its Subsidiaries that
are corporations have been duly and validly authorized and issued and
with respect to shares of capital stock are fully paid and
non-assessable; and all of the partnership interests of the
Subsidiaries disclosed in the Offering Memorandum as being owned
directly or indirectly by the Company and all of the issued shares of
capital stock of the Subsidiaries that are corporations have been
duly and validly authorized and issued are fully paid and
non-assessable and are owned directly or indirectly by the Company
free and clear of all liens, encumbrances, equities or claims (other
than liens to secure indebtedness under credit facilities disclosed
in the Offering Memorandum); and ownership of the various interests
and shares of the Company and its Subsidiaries is as described in the
Offering Memorandum;
The Notes have been duly authorized and, when
issued and delivered pursuant to this Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture under which they
are to be issued, which will be substantially in the form previously
delivered to the Initial Purchaser; the Indenture has been duly
authorized by the Company and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms
against the Company, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Notes and the Indenture will conform to the
descriptions thereof in the Offering Memorandum and will be in
substantially the form previously delivered to the Initial Purchaser;
None of the transactions contemplated by this
Agreement (including, without limitation, the use of
the proceeds from the sale of the Senior Notes) will violate or
result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation,
Regulations G, T, U, and X of the Board of Governors of the Federal
Reserve System;
Prior to the date hereof, none of the Company or
any of their affiliates (other than the Initial
Purchaser or any person acting on its behalf as to which the Company
makes no representation) has taken, directly or indirectly, any
action which is designed to or which has constituted or which might
have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in
connection with the offering of the Senior Notes;
The Registration Rights Agreement has been duly
authorized by the Company and, when executed and
delivered by the Company and the Initial Purchaser, will constitute a
valid and legally binding instrument, enforceable against the Company
in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Registration Rights Agreement will
conform to the description thereof in the Offering Memorandum and
will be in substantially the form previously delivered to the Initial
Purchaser;
The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument (including,
without limitation, any license or franchise granted to the Company
or one of its Subsidiaries by a local franchising governmental body)
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or has rights
under or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or
bylaws of the Company or its Subsidiaries that are corporations or
the certificates of limited partnership or the partnership agreements
of its Subsidiaries that are partnerships or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or
any of their properties; and 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
Notes or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration
Rights Agreement, other than (i) such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Senior Notes by the Initial
Purchaser, (ii) the filing of a registration statement by the Company
with the Commission pursuant to the Act pursuant to the Registration
Rights Agreement, and (iii) such other consents, approvals,
authorizations, registrations or qualifications as may be required
under the Act, state or foreign securities or Blue Sky laws in
connection with the exchange, offer or resale registration
contemplated in the Offering Memorandum and described in the
Registration Rights Agreement in connection with the purchase and
resale of the Senior Notes by the Initial Purchaser;
None of the Company or its Subsidiaries is in
violation of its certificate of incorporation or
bylaws, as the case may be, or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument (including,
without limitation, any license or franchise granted to the Company
or a subsidiary by a local franchising governmental body) to which
the Company or a subsidiary is a party or by which it or any of its
properties may be bound, except for such defaults as would not have
individually or in the aggregate a Material Adverse Effect;
The statements set forth in the Offering
Memorandum under the caption "Description of the Notes,"
insofar as they purport to constitute a summary of the terms of the
Notes, and under the captions "Business," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete
and fair in all material respects;
When the Senior Notes are issued and delivered
pursuant to this Agreement, the Senior Notes will not
be of the same class (within the meaning of Rule 144 under the Act)
as securities of the Company which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
None of the Company or its Subsidiaries is or,
after giving effect to the offering and sale of the
Notes, will be an "investment company", or an entity "controlled" by
an "investment company", as such terms are defined in the United
States Investment Company Act of 1940, as amended (the "Investment
Company Act");
None of the Company or any person acting on its
or their behalf (other than the Initial Purchaser,
as to which the Company makes no representation or warranty) has
offered or sold the Senior Notes by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the
Act;
Within the preceding six months, none of the
Company or any other person acting on behalf of the
Company (other than the Initial Purchaser, as to which the Company
makes no representation or warranty) has offered or sold to any
person any Notes, or any securities of the same or a similar class as
the Notes, other than Senior Notes offered or sold to the Initial
Purchaser hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Notes or any substantially similar security issued by the
Company, within six months subsequent to the date on which the
distribution of the Notes has been completed (as notified by the
Initial Purchaser), is made under restrictions and other
circumstances reasonably designed not to affect the status of the
offer and sale of the Notes in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the
registration provisions of the Act;
None of the Company or any of their affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes;
Other than as set forth in the Offering
Memorandum (including those matters referred to therein
relating to general rulemakings and similar matters relating
generally to the cable television industry), there are no legal or
governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or
any of its Subsidiaries is the subject which, if determined adversely
to the Company or any of its Subsidiaries, would individually or in
the aggregate have a Material Adverse Effect and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or by others; and except
with respect to general rulemakings and similar matters relating
generally to the cable television industry, during the time the
Systems (as defined below) have been owned by the Company or a
subsidiary (i) there has been no adverse judgment, order, or decree
issued by the United States Federal Communications Commission (the
"FCC") relating to any of the Systems that has not been disclosed in
the Offering Memorandum that would be required to be disclosed in a
public offering registered under the Act; (ii) there are no actions,
suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its
Subsidiaries or any System; and (iii) to the Company's knowledge,
after due inquiry, there is no reasonable basis for any such action,
suit, proceeding or investigation;
Deloitte & Touche LLP, who have reported on the
financial statements of the Company, is an independent public
accountant as required by the Act and the rules and regulations of
the Commission thereunder;
This Agreement has been duly authorized,
executed and delivered by the Company;
Except for matters covered by paragraph
(x) below or with respect to matters that would not
individually or in the aggregate have a Material Adverse Effect, (i)
the Company and its Subsidiaries have made all filings, recordings
and registrations with, and possess all validations or exemptions,
approvals, orders, authorizations, consents, licenses, certificates
and permits from, the FCC, applicable public utilities and other
federal, state and local regulatory or governmental bodies and
authorities or any subdivision thereof, including, without
limitation, cable television franchises, pole attachment agreements,
and cable antenna relay service, broadcast auxiliary, earth station,
business radio, microwave or special safety radio service licenses
issued by the FCC (collectively, the "Authorizations") necessary or
appropriate to own, operate and construct the cable communication
systems owned by them (the "Systems") or otherwise for the operation
of their businesses and are not in violation thereof; (ii) all such
Authorizations are in full force and effect, and no event has
occurred that permits, or after notice or lapse of time could permit,
the revocation, termination or modification of any Authorization
which is necessary or appropriate to own, operate and construct the
Systems or otherwise for the operation of any such business; (iii)
none of the Company or any of its Subsidiaries is in violation of any
duty or obligation required by the United States Communications Act
of 1934, as amended (the "Communications Act"), or any FCC rule or
regulation applicable to the operation of any portion of any of the
Systems; (iv) none of the Company or any of its Subsidiaries is in
violation of any duty or obligation required by state or local laws,
or local rules or regulations applicable to the operation of any
portion of any of the Systems; (v) there is not pending or, to the
best knowledge of the Company or any of its Subsidiaries, threatened,
any action by the FCC or state or local regulatory authority to
modify, revoke, cancel, suspend or refuse to renew any Authorization;
(vi) other than as described in the Offering Memorandum, there is not
now issued or outstanding or, to the best knowledge of the Company or
any of its Subsidiaries, threatened, any notice of any hearing,
material violation or material complaint against the Company or any
of its Subsidiaries with respect to the operation of any portion of
the Systems and none of the Company or its Subsidiaries has any
knowledge that any person intends to contest renewal of any material
Authorization;
(i) (A) The Company and its Subsidiaries
have entered into, or have rights under, all required
programming agreements (including, without limitation, all
non-broadcast affiliation agreements under which the Company and its
Subsidiaries are accorded retransmission rights relating to
programming that the Systems provide to their customers) that are
material to the conduct of their business as described in the
Offering Memorandum; and (B) all such material agreements are in full
force and effect and none of the Company, any of its Subsidiaries or
any of its affiliates has received any written notice of revocation
or material modifications of such material agreements; and (ii) (A)
either the Company or its Subsidiaries has entered into agreements
with the television stations that have notified the Company or its
Subsidiaries that such station's respective consent is required to
carry such stations on the Systems or has ceased carrying such
stations; (B) all such agreements grant the Company or one of its
Subsidiaries retransmission consent in exchange for various non-cash
consideration; and (C) all such agreements are in full force and
effect and are not subject to revocation (except in the case of
material breach by the Company or its Subsidiaries) or material
modifications, and no event has occurred that permits, or after
notice or lapse of time could permit, the revocation, termination or
material modification of any such agreement, except where the failure
of such agreements to be in full force and effect or such revocation
would not, in either case, individually or in the aggregate have a
Material Adverse Effect;
Except for matters that would not individually
or in the aggregate have a Material Adverse Effect,
(i) all registration statements and all other documents (including
but not limited to annual reports) required by the FCC in connection
with the operation of the Systems have been filed with the FCC; (ii)
all frequencies within the restricted aeronautical and navigational
bands (i.e., 108-136 MHz and 225-400 MHz) which are currently being
used in connection with the operation of the Systems have been
authorized for such use by the FCC; (iii) each of the Systems subject
to Equal Employment Opportunity Commission ("EEO") compliance
certification by the FCC has been certified by the FCC for annual EEO
compliance during the time such Systems have been owned by the
Company or its Subsidiaries; and (iv) all towers associated with the
Systems are in compliance with the rules and regulations of the
United States Federal Aviation Administration;
Except for matters that would not individually
or in the aggregate have a Material Adverse Effect,
none of the Company or any of its Subsidiaries is in breach or
violation of, or in default under, any of the terms, conditions or
provisions of the Communications Act or the rules, regulations or
policies of the FCC thereunder;
(i) Except for matters that would not
individually or in the aggregate have a Material Adverse
Effect, all statements of accounts and any other filings that are
required under Section 111 of the United States Copyright Act of
1976, as amended, in connection with the retransmission of any
broadcast television and radio signals on the Systems have been
timely filed with the United States Copyright Office and indicated
royalty payments have been made for each System for each accounting
period during which such Systems have been owned by the Company or
its Subsidiaries; (ii) none of the Company, any of its Subsidiaries
or any System has received any inquiry or request from the United
States Copyright Office or from any other party challenging or
questioning any such statements of account or royalty payments; and
(iii) no claim of copyright infringement has been made or threatened
in writing against the Company, any of its Subsidiaries or any
System;
Neither the execution and delivery of this
Agreement, the Indenture or the Registration Rights
Agreement, nor the consummation of the transactions contemplated
hereby and thereby or by the Offering Memorandum under "Use of
Proceeds," nor compliance with the terms, conditions and provisions
thereof by the Company, will conflict with the Communications Act or
the rules, regulations or policies of the FCC thereunder, or will
cause any suspension, revocation, impairment, forfeiture, nonrenewal
or termination of any material license, permit, franchise,
certificate, consent, authorization, designation, declaration,
filing, registration or qualification;
Neither the execution and delivery of this
Agreement, the Indenture or the Registration Rights
Agreement, nor the execution, delivery, offer, issuance and sale of
the Notes, nor compliance with the terms, conditions and provisions
thereof by the Company, requires any license, permit, franchise,
certificate, consent, authorization, designation, declaration,
filing, registration or qualification by or with the FCC;
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or Offering Memorandum, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Initial Purchaser furnished in writing to the Company by or on behalf of the
Initial Purchaser expressly for use in connection therewith; provided, however,
that the indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser (or to the benefit of any person controlling such Initial Purchaser)
on account of any such loss, claim, damage, liability or expense arising from
the sale of the Senior Notes by such Initial Purchaser to any person if the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in the Preliminary Offering Memorandum was corrected
in the Offering Memorandum and the Initial Purchaser sold Senior Notes to that
person without sending or giving at or prior to the written confirmation of such
sale, a copy of the Offering Memorandum (as then amended or supplemented) if the
Company has previously furnished sufficient copies thereof to the Initial
Purchaser on a timely basis to permit such sending or giving. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have.
If any action, suit or proceeding shall be
brought against the Initial Purchaser or any person
controlling the Initial Purchaser in respect of which indemnity may be sought
against the Company, the Initial Purchaser or such controlling person shall
promptly notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Initial Purchaser or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Initial Purchaser or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both the Initial Purchaser
or such controlling person and the indemnifying parties and the Initial
Purchaser or such controlling person shall have been advised in writing by its
counsel that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of the Initial Purchaser or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Initial
Purchaser and controlling persons not having actual or potential differing
interests with the Initial Purchaser or among themselves, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless the
Initial Purchaser, to the extent provided in paragraph (a), and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
The Initial Purchaser agrees to indemnify and
hold harmless the Company and its directors and
officers, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the same extent as the
indemnity from the Company to the Initial Purchaser set forth in paragraph (a)
hereof, but only with respect to Initial Purchaser Information furnished in
writing by or on behalf of the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or Offering Memorandum. If any action, suit or
proceeding shall be brought against the Company, any of its directors or
officers, or any such controlling person based on the Preliminary Offering
Memorandum or Offering Memorandum, and in respect of which indemnity may be
sought against the Initial Purchaser pursuant to this paragraph (c), the Initial
Purchaser shall have the rights and duties given to the Company by paragraph (b)
above (except that if the Company shall have assumed the defense thereof, the
Initial Purchaser shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the Initial Purchaser's expense), and the
Company, its directors and officers, and any such controlling person shall have
the rights and duties given to the Initial Purchaser by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Initial Purchaser may otherwise have.
If the indemnification provided for in this
Section 6 is unavailable (except if inapplicable
according to its terms) to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other hand from the offering of the Senior Notes, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchaser on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchaser, in each
case as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company on the one hand and the Initial Purchaser on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or by the Initial Purchaser on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Initial Purchaser agree that
it would not be just and equitable if contribution
pursuant to this Section 6 were determined by a pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions of
this Section 6, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price of the Senior Notes
purchased by it and distributed to the purchasers pursuant to Exempt Resales
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 6 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred but only to the extent that such losses,
claims, damages, liabilities or expenses are required to be paid by an
indemnified party. The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Initial Purchaser or any
person controlling the Initial Purchaser, the Company, its directors or officers
or any person controlling the Company, (ii) acceptance of any Senior Notes and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to the Initial Purchaser or any person controlling the Initial
Purchaser, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
No indemnifying party shall, without the prior
written consent of the indemnified party, effect any
settlement of any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding.
7. Conditions of the Initial Purchaser's
Obligation. The obligation of the Initial Purchaser to
purchase the Senior Notes hereunder is subject to the following conditions:
At the time of execution of this Agreement and
on the Closing Date, no order or decree preventing
the use of the Offering Memorandum, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, be
contemplated. No stop order suspending the sale of the Senior Notes in any
jurisdiction designated by the Initial Purchaser shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company, shall be contemplated.
Subsequent to the date as of which information
is given in the Offering Memorandum, except as
otherwise stated in the Offering Memorandum, there shall not have occurred (i)
any change, or any development involving a prospective change, in or affecting
the condition (financial or other), business, properties, net worth, or results
of operations of the Company or its Subsidiaries not contemplated by the
Offering Memorandum, which in the opinion of the Initial Purchaser, would
materially adversely affect the market for the Senior Notes, or (ii) any event
or development relating to or involving the Company, any of its Subsidiaries or
any officer or director of the Company or any of its Subsidiaries which makes
any statement made in the Offering Memorandum untrue or which, in the opinion of
the Company and its counsel or the Initial Purchaser and its counsel, requires
the making of any addition to or change in the Offering Memorandum in order to
state a material fact required by any law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Offering Memorandum to reflect such event or development
would, in the opinion of the Initial Purchaser, materially adversely affect the
market for the Senior Notes.
The Final Offering Memorandum shall have been
printed and copies thereof distributed to the Initial
Purchaser in such quantities as shall have been previously specified by the
Initial Purchaser not later than 9:00 A.M., New York City time, on February 24,
1997, or at such later date and time as the Initial Purchaser may approve in
writing.
The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxxxx Ingersoll
Professional Corporation, counsel for the Company, dated the Closing Date and
addressed to the Initial Purchaser, to the effect that:
The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the state of its formation with full
corporate power and authority to own its properties and conduct its
business as described in the Offering Memorandum;
This Agreement has been duly
authorized, executed and delivered by the Company;
The Registration Rights Agreement
has been duly authorized, executed and delivered by the Company;
The Notes have been duly authorized
and, when issued and delivered pursuant to this
Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the Indenture and
enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and further except that (a) rights to contribution or
indemnification may be limited by the laws, rules or regulations of
any governmental authority or agency thereof or by public policy, and
(b) waivers as to usury, stay or extension laws may be unenforceable;
and the Notes and the Indenture conform in all material respects to
the descriptions thereof in the Offering Memorandum;
The Indenture has been duly
authorized, executed and delivered by the Company and will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms against the Company, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles and further except
that (a) rights to contribution or indemnification may be limited by
the laws, rules or regulations of any governmental authority or
agency thereof or by public policy, and (b) waivers as to usury, stay
or extension laws may be unenforceable;
The Registration Rights Agreement has
been duly authorized by the Company and, when
executed and delivered by the parties thereto, will constitute a
valid and legally binding instrument, enforceable in accordance with
its terms against the Company, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights, to
general equity principles and further except that (a) rights to
contribution or indemnification may be limited by the laws, rules or
regulations of any governmental authority or agency thereof or by
public policy and (b) waivers as to usury, stay or extension laws may
be unenforceable; and the Registration Rights Agreement will conform
in all material respects to the description thereof in the Offering
Memorandum;
The issue and sale of the Notes and
the compliance by the Company with all of the
provisions of the Notes, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not contravene the provisions of
the certificate of incorporation and bylaws of the Company, or to the
best of our knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company;
The statements set forth in the
Offering Memorandum under the caption "Description of the
Senior Notes," insofar as they purport to constitute a summary of the
terms of the Notes, the statements set forth in the Offering
Memorandum under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Financing Activities," insofar as they purport to describe
the debt instruments referred to therein and the statements set forth
in the Offering Memorandum under the caption "Certain United States
Federal Tax Considerations for Non-United States Holders," insofar as
they purport to describe the provisions of the laws referred to
therein, are, when taken together with the other information included
in the Offering Memorandum, accurate in all material respects;
No registration of the Senior Notes
under the Act, and no qualification of an indenture
under the 1939 Act with respect thereto, is required for the offer,
sale and initial resale of the Senior Notes by the Initial Purchaser
in the manner contemplated by this Agreement; and
The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act.
In addition, such counsel shall also state that
such counsel has participated in conferences with
officers and representatives of the Company, representatives of the independent
public accountants for the Company and the Initial Purchaser at which the
contents of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for and has not verified the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, and has not made any
independent check or verification thereof, on the basis of the foregoing
(relying as to materiality to the extent such counsel deemed appropriate upon
facts provided by officers and other representatives of the Company), no facts
have come to the attention of such counsel that lead such counsel to believe
that the Offering Memorandum, as of its date or as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and other financial and statistical data included
therein).
The opinion of such counsel may be limited to the laws of
the State of New York, the General Corporation Law of
the State of Delaware and the federal laws of the United States.
The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxxx X. Xxxxxx, Esq.,
General Counsel of the Company, dated the Closing Date and addressed to the
Initial Purchaser to the effect that:
Except as set forth in the Offering
Memorandum, each of the Company and its Subsidiaries
has all of the licenses, permits, franchises and authorizations, if
any, required by the relevant governmental authorities of each of New
York, Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New
Hampshire, Vermont, Michigan and Connecticut and/or its political
subdivisions for the provision of cable television service (as such
counsel understands service to be provided which may be based on a
certificate of an officer of the Company, provided that such counsel
shall state that they believe that both the Initial Purchaser and he
are justified in relying on such certificate), where the failure to
obtain or hold such license, permit, franchise or authorization would
have a Material Adverse Effect;
To the best of such counsel's
knowledge after due inquiry, each of the Company and its
Subsidiaries has made all filings, reports, applications and
submissions required by the laws and ordinances relating to cable
services of each of New York, Virginia, Pennsylvania, Ohio, New
Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and the ordinances of the state's political subdivisions
relating thereto, and the rules and regulations promulgated
therewith;
Each of the Company and its
Subsidiaries has the consents, approvals, authorizations,
licenses, certificates, permits, or orders of any governmental
authorities of the each of New York, Virginia, Pennsylvania, Ohio,
New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and its political subdivisions, if any, required for the
consummations of the transactions contemplated in the Purchase
Agreement where the failure to obtain the consents, approvals,
authorizations, licenses, certificates, permits or orders would have
a Material Adverse Effect;
There are no actions, suits or
proceedings pending or, to the best of such counsel's
knowledge, threatened by or before any court or governmental body
each of New York, Virginia, Pennsylvania, Ohio, New Jersey,
Massachusetts, New Hampshire, Vermont, Michigan and Connecticut,
against or affecting any of the Company or its Subsidiaries, or the
business of the Company and its Subsidiaries;
The statements in the Offering
Memorandum under the headings "Risk Factors - Regulation in
the Telecommunications Industry," "Risk Factors - Competition," and
"Legislation and Regulation," insofar as they relate to the Company
and its Subsidiaries operations each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire,
Vermont, Michigan and Connecticut, and purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects; and
Neither the execution and delivery of
the Purchase Agreement nor the offering of the
Senior Notes contemplated thereby will conflict with or result in a
violation of any order or regulation of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire,
Vermont, Michigan and Connecticut, or its political subdivisions
applicable to the Company and its Subsidiaries, the conflict with or
the violation of which would have a material adverse effect on the
Company and its Subsidiaries.
The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxx X. Xxxxxx, Deputy
General Counsel to the Company, dated the Closing Date and addressed to the
Initial Purchaser, to the effect that:
None of the Company or its
Subsidiaries is in violation of its certificate of
incorporation, by-laws, certificate of limited partnership or
partnership agreement, as applicable, or in default in the
performance or observance of any material obligation, covenant or
condition contained in any partnership agreement, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound;
Each of the Company and its
Subsidiaries has been duly qualified as a foreign corporation
or partnership, as the case may be, for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction, except where the failure to so qualify would not have a
Material Adverse Effect (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state that he believes
that both the Initial Purchaser and he are justified in relying upon
such opinions and certificates);
Each subsidiary of the Company is
owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (other than
liens to secure indebtedness under credit facilities disclosed in the
Offering Memorandum) (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the
Company or its Subsidiaries, provided that such counsel shall state
that he believes that both the Initial Purchaser and he are justified
in relying upon such opinions and certificates);
To the best of such counsel's
knowledge and other than as set forth in the Offering
Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which
any property of the Company or any of its Subsidiaries is the subject
which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, shareholder's equity, partners' equity, or results of
operations of the Company and its Subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
The issue and sale of the Notes and
the compliance by the Company with all of the
provisions of the Notes, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not, to the best of my knowledge
after due inquiry, conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under
any material indenture, mortgage, deed of trust, sale/leaseback
transaction, loan agreement or other similar financing agreement, or
instrument or other agreement or instrument (including, without
limitation, any license or franchise granted to the Company or a
Subsidiary by a local franchising governmental body) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, nor
will such actions result in any violation of the provisions of the
certificate of incorporation, by-laws, the certificate of limited
partnership or the partnership agreements of the Company and its
Subsidiaries, as appropriate, or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their properties; and
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 Senior Notes or the consummation by the Company of
the transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and resale of the Senior Notes by the Initial Purchaser.
In addition, such counsel shall also state that
such counsel has participated in conferences with
officers and representatives of the Company, representatives of the independent
public accountants for the Company and the Initial Purchaser at which the
contents of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for and has not verified the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, and has not made any
independent check or verification thereof, on the basis of the foregoing
(relying as to materiality to the extent such counsel deemed appropriate upon
facts provided by officers and other representatives of the Company), no facts
have come to the attention of such counsel that lead such counsel to believe
that the Offering Memorandum, as of its date or as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and other financial and statistical data included
therein).
The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxxxxxx & Xxxxx,
P.C., special regulatory counsel for the Company and its Subsidiaries, dated the
Closing Date, and addressed to the Initial Purchaser to the effect that:
The communities listed in Section A
of Attachment 1 to the opinion have been registered
with the FCC in connection with the operation of the Systems. The
filing of a registration statement constitutes initial FCC
authorization for the commencement of cable television operations in
the community registered.
The Subsidiaries hold certain FCC
licenses, as that term is defined below ("FCC
Licenses"). All FCC Licenses and receive-only earth station
registrations held by the Subsidiaries in connection with the
operation of the Cable Systems are listed on Attachment 1 to the
Opinion. To the best of our knowledge, all such FCC Licenses have
been validly issued or assigned to the present licensee and are
currently in full force and effect. We have no knowledge of any event
which would allow, or after notice or lapse of time which would
allow, revocation or termination of any FCC License held by the
Subsidiaries or would result in any other material impairment of the
rights of the holder of such license. To the best of our knowledge,
no other FCC Licenses are required in connection with the operation
of the Cable Systems by the Subsidiaries in the manner we have
advised they are presently being operated. For the purposes of this
opinion, an FCC License is defined as an authorization, or renewal
thereof, issued by the FCC authorizing the transmission of radio
energy through the airways.
Other than proceedings affecting the
cable television industry generally, there is no
action, suit or proceeding pending before or, to the best of our
knowledge, threatened by the FCC which is reasonably likely to have a
materially adverse impact upon the cable television operations of the
Company and its Subsidiaries taken as a whole.
To the best of our knowledge after
due inquiry, the Company and the Subsidiaries have
filed all current and routine filings, reports, applications and
submissions required under the Communications Act, as amended, and
under the rules and regulations of the FCC.
The Subsidiaries hold all
authorizations and/or have filed all notifications required by
the FCC in connection with their operation on all frequencies in the
108-137 MHz and 225-400 MHz bands which we have been advised are
currently being utilized on the Cable Systems. The geographic and
technical parameters with respect to the authorized use of these
frequencies are listed on Attachment 1 hereto.
The employment units covered by the
Cable Systems and operated by the Subsidiaries have
been certified, where required, by the FCC for compliance with equal
employment opportunity ("EEO") requirements in each of calendar years
1992 through 1996 in which such Cable Systems have been owned and
operated by the Company or the Subsidiaries. Employment certification
records for the years prior to 1992 have been purged from the FCC's
database and are therefore outside the scope of this opinion.
Statements of Account required by
Section 111 of the Copyright Act of 1976, as amended
have been filed, together with royalty payments accompanying said
Statements of Account, with the U.S. Copyright Office for the Cable
Systems covering each of the accounting periods beginning with July 1
through December 31, 1993 accounting period and ending with the
January 1 through June 30, 1996 accounting period during which such
Cable Systems have been operated by the Subsidiaries. We have not
received the information or calculations contained in these
Statements, and express no opinion with respect to the accuracy
thereof. To the best of our knowledge, there are no currently
outstanding inquiries received from the U.S. Copyright Office or any
other party which question the copyright filings or payments made by
the Company or the Subsidiaries with respect to the Cable Systems. It
is possible that there may be matters pending before the U.S.
Copyright Office relating to the Cable Systems, the Company or the
Subsidiaries of which we do not have knowledge because such matters
have not yet been incorporated into the available public files of the
U.S. Copyright Office. However, we are not aware of the pending or
threatened claim, action or demand for copyright infringement or for
non-payment of royalties with respect to the Statements of Account or
related royalty payments filed by the Company and the Subsidiaries
for the Cable Systems.
The Company has obtained all
consents, approvals and authorizations of the FCC, if any,
required for the consummation of the transactions of the transactions
contemplated in the Purchase Agreement where the failure to obtain
the consents, approval, authorizations, licenses, certificates,
permits or orders would reasonably be expected to have a materially
adverse impact on the Company or the Subsidiaries.
Neither the execution and delivery of
the Purchase Agreement nor the offering of the
Senior Notes contemplated thereby will conflict with or result in a
violation of any order or regulation of the FCC applicable to the
Company and the Subsidiaries, the conflict with or the violation of
which would reasonably be expected to have a materially adverse
impact on the Company or the Subsidiaries. However, we call your
attention to the following.
Under the Act as now in effect, the
sale or other disposition of certain pledged
collateral and the exercise of certain other rights and remedies
conferred upon you by any agreement or by applicable law might
constitute an assignment of an FCC licensee, or transfer of control
of an FCC license, requiring for its consummation the prior consent
of the FCC granted upon an appropriate application thereof.
Under the Act as now in effect, and
as now interpreted by the FCC, no valid security
interest may be granted in an FCC license. To the extent that the
Purchase Agreement and/or related financing documents purport to
grant to you a security interest in any FCC licenses, such security
interest may not be legally enforceable.
In the course of our representation
of the Company and its Subsidiaries, no matters have
come to our attention, other than matters affecting the cable
television industry generally, which would reasonable be expected to
have a materially adverse impact upon the cable television operations
of the Company and the Subsidiaries taken as a whole.
In our opinion, the Statements in the
Offering Memorandum under the headings "Risk Factors
- Regulation in the Telecommunications Industry," "Risk Factors -
Competition," and "Legislation and Regulation," insofar as the
purport to describe the provisions of the law referred to therein,
are accurate, complete and fair in all material respects.
The Initial Purchaser shall have received on the
Closing date an opinion, of Xxxxxx & Xxxxxxx,
counsel for the Initial Purchaser, dated the Closing Date, and addressed to the
Initial Purchaser, with respect to the Offering Memorandum and such other
related matters as the Initial Purchaser may reasonably request, and such
counsel shall have received such certificates, documents and information as they
may reasonably request to enable them to pass upon such matters.
The Initial Purchaser shall have received
letters addressed to the Initial Purchaser, and dated the
date hereof and the Closing Date from Deloitte & Touche LLP, independent
certified public accountants, substantially in the forms heretofore approved by
the Initial Purchaser and its counsel.
(i) There shall not have been any decrease in
stockholders' equity of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or specifically contemplated in
the Offering Memorandum; (ii) the Company and its Subsidiaries shall not have
any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and it
subsidiaries, taken as a whole, other than those reflected in the Offering
Memorandum; and (iii) all the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and the Initial Purchaser shall have received a
certificate, dated the Closing Date and signed by the Chief Executive Officer
and the Chief Financial Officer of the Company (or such other officers as are
acceptable to the Initial Purchaser), to the effect set forth in this Section
7(j) and in Section 7(k) hereof.
The Company shall not have failed at or prior to
the Closing Date to have performed or complied in
all material respects with any of its agreements herein contained and required
to be performed or complied with by it hereunder at or prior to the Closing
Date.
There shall not have been any announcement by
any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g) under the Act, that (i) it
is downgrading its rating assigned to any class of securities of the Company or
any of its Subsidiaries, or (ii) it is reviewing its ratings assigned to any
class of securities of the Company or any of its Subsidiaries with a view to
possible downgrading, or with negative implications, or direction not
determined.
The Senior Notes shall have been approved for
trading in the PORTAL Market.
The Company shall have obtained, in writing, all
consents and waivers required under the terms of
any of its material agreements necessary to ensure that the transactions
contemplated by this Agreement and the other Operative Documents will not
conflict with or constitute a breach of, or a default under any of such
agreements. The Company shall have furnished photocopies of such waivers and
consents, if any, to the Initial Purchaser.
The Company shall have furnished or caused to be
furnished to the Initial Purchaser such further
certificates and documents as the Initial Purchaser or its counsel shall have
requested.
All such opinions, certificates, letters, consents, waivers
amendments and other documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory in form and
substance to the Initial Purchaser and counsel for the Initial Purchaser. Any
certificate or document signed by any officer of the Company and delivered to
the Initial Purchaser, or to counsel for the Initial Purchaser, shall be deemed
a representation and warranty by the Company to the Initial Purchaser as to the
statements made therein.
8. Expenses. The Company agrees to pay the
following costs, expenses and fees and all other costs and
expenses incident to the performance by it of any of its obligations hereunder:
(i) the preparation and reproduction of the Preliminary Offering Memorandum and
the Final Offering Memorandum (including, without limitation, financial
statements thereto), and each amendment or supplement to any of them, this
Agreement and the Indenture; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Final Offering Memorandum, the Preliminary Offering
Memorandum, and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Senior Notes; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes, including any stamp taxes in connection
with the original issuance and sale of the Notes; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Senior Notes; (v) the
application for quotation of the Notes on the PORTAL Market; (vi) the
qualification of the Senior Notes for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 4(e) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Initial Purchaser relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
qualification); (vii) the performance by the Company of its obligations under
the Registration Rights Agreement; (viii) fees and expenses of the Trustee and
its counsel; (ix) the transportation and other expenses, if any, incurred by or
on behalf of the Company representatives in connection with presentations to
prospective purchasers of the Senior Notes; and (x) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel, if any) for the Company. The Company hereby agrees that they
will pay in full on the Closing Date the fees and expenses referred to in clause
(vi) of this Section 8 by delivering to counsel for the Initial Purchaser on
such date a check payable to such counsel in the requisite amount.
9. Effective Date of Agreement. This Agreement
shall become effective upon the execution and delivery
hereof by all the parties hereto.
10. Termination of Agreement. This Agreement shall
be subject to termination in the absolute discretion
of the Initial Purchaser, without liability on the part of the Initial Purchaser
to the Company, by notice to the Company, if prior to the Closing Date, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York shall have been declared, or (iii) there shall have occurred any
outbreak or escalation of hostilities involving the United States or other
domestic, foreign or international calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in the judgment of the Initial
Purchaser, impracticable or inadvisable to commence or continue the offering of
the Senior Notes on the terms set forth on the cover page of the Offering
Memorandum or to enforce contracts for the resale of the Senior Notes by the
Initial Purchaser. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
11. Information Furnished by the Initial Purchaser.
The statements set forth in the last paragraph of
the cover page of the Preliminary Offering Memorandum and the Offering
Memorandum and the second to last paragraph on the inside cover page of the
Preliminary Offering Memorandum and the Offering Memorandum, constitute the only
Initial Purchaser Information furnished by or on behalf of the Initial Purchaser
as such information is referred to in Sections 5(a) and 6 hereof.
12. Miscellaneous. Except as otherwise provided in
Sections 4, 9 and 10 hereof, notice given pursuant
to any provision of this Agreement shall be in writing and shall be delivered
(i) if to the Company, at the office of the Company at Main at Xxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: Chief Financial Officer with a copy to
Xxxxxxxx Xxxxxxxxx Professional Corporation, 1 Oxford Center, 000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxxx, XX 00000, Attention: Xxx Xxxxx, or (ii) if to the
Initial Purchaser, addressed to Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Manager, Investment Banking Division, with a copy to
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx X.
Xxxxxxxxx.
This Agreement has been and is made solely for the benefit
of the Initial Purchaser, the Company and their
respective directors, officers and the controlling persons referred to in
Section 6 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by
virtue of this Agreement. Neither the term "successor" nor the term "successors
and assigns" as used in this Agreement shall include a purchaser from the
Initial Purchaser of any of the Senior Notes in his status as such purchaser.
13. Applicable Law; Counterparts This Agreement
shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed within the State of New York and without regard to the conflicts of
law principles thereof.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If
signed in counterparts, this Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of
each party hereto.
[signature page follows]
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchaser.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By:
Name:
Title:
Confirmed as of the date first above mentioned.
XXXXX XXXXXX INC.
By:
Name:
Title:
Exhibit A
Form of Registration Rights Agreement
