FRONTIERVISION HOLDINGS, L.P.
FRONTIERVISION HOLDINGS CAPITAL II CORPORATION
$91,298,000
11 7/8% Senior Discount Notes due 2007, Series B
Purchase Agreement
December 2, 1998
X.X. Xxxxxx Securities Inc.
Chase Securities Inc.
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
FrontierVision Holdings, L.P., a Delaware limited partnership (the
"Company"), and FrontierVision Holdings Capital II Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company ("Capital" and,
together with the Company, the "Issuers"), propose to issue and sell to X.X.
Xxxxxx Securities Inc. and Chase Securities Inc. (the "Initial Purchasers")
$91,298,000 aggregate principal amount at maturity of their 11 7/8% Senior
Discount Notes due 2007, Series B (the "Securities"). The Securities will be
issued pursuant to the provisions of an Indenture (the "Indenture") to be dated
as of December 9, 1998 between the Issuers and U.S. Bank National Association,
as Trustee (the "Trustee").
The offering and sale of the Securities to the Initial Purchasers will be
made without registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon the exemption therefrom provided by Section
4(2) of the Securities Act. Holders of Securities will have the benefits of a
Registration Rights Agreement to be dated as of December 9, 1998 among the
Issuers and the Initial Purchasers, substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"). This Agreement, the Indenture,
the Securities and the Registration Rights Agreement are collectively referred
to herein as the "Offering Agreements."
2
The Issuers hereby agree with the Initial Purchasers as follows:
1. The Issuers agree to issue and sell the Securities to the Initial
Purchasers as hereinafter provided, and each Initial Purchaser, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Issuers the respective principal amount at maturity of Securities set
forth opposite such Initial Purchaser's name in Schedule I hereto at a price
(the "Purchase Price") equal to 79.68453% of their principal amount at maturity.
2. The Issuers understand that the Initial Purchasers intend (i) to offer
privately their respective portions of the Securities as soon after this
Agreement has become effective as in the judgment of the Initial Purchasers is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Offering Memorandum (as defined below).
The Issuers confirm that they have authorized the Initial Purchasers,
subject to the restrictions set forth below, to distribute copies of the
Offering Memorandum in connection with the offering of the Securities. Each
Initial Purchaser hereby makes to the Issuers the following representations and
agreements:
(a) it is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act;
(b) (A) it will not solicit offers for, or offer to sell, the Securities by
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Securities Act) and (B) it will solicit offers for the
Securities only from, and will offer the Securities only to, (1) persons whom it
reasonably believes to be "qualified institutional buyers" within the meaning of
Rule 144A under the Securities Act or (2) upon the terms and conditions set
forth in Annex I to this Agreement; and
(c) it will deliver a copy of the Offering Memorandum to each person who
acquires Securities from it.
3. Payment for the Securities shall be made by wire transfer in immediately
available funds, to the account specified by the Company to the Initial
Purchasers no later than
3
noon on the Business Day (as defined below) prior to the Closing Date (as
defined below), on December 9, 1998, or at such other time on the same or such
other date as the Initial Purchasers and the Issuers may agree upon in writing.
The time and date of such payment are referred to herein as the "Closing Date."
As used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the account of the Initial Purchasers of one or
more global notes representing the Securities (collectively, the "Global Note"),
with any transfer taxes payable in connection with the transfer to the Initial
Purchasers paid by the Company. The Global Note will be made available for
inspection by the Initial Purchasers at the office of X.X. Xxxxxx Securities
Inc. at the address set forth above, or at such other location as the Company
and the Initial Purchasers agree, not later than 1:00 P.M., New York City time,
on the Business Day prior to the Closing Date.
4. The Issuers, jointly and severally, represent and warrant to each
Initial Purchaser as follows:
(a) An offering memorandum, dated December 2, 1998 (including the documents
incorporated by reference therein, the "Offering Memorandum"), has been prepared
in connection with the offering of the Securities. The Offering Memorandum and
any amendments or supplements thereto did not and will not, as of its date or as
of the Closing Date, contain an 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; provided, however,
that the foregoing shall not apply to statements or omissions in the Offering
Memorandum or any amendment or supplement thereto made in reliance upon and in
conformity with information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser expressly for use therein.
(b) The financial statements, and the related notes thereto, included or
incorporated by reference in the Offering Memorandum present fairly the
financial position of the applicable entity (such entities, collectively, the
"Entities") as of the dates indicated and the results of operations of each of
the Entities and the changes in their cash flows for the periods specified; said
financial
4
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis. The pro forma financial statements,
and the related notes thereto, and other pro forma financial information
included in the Offering Memorandum have been prepared in accordance with the
applicable requirements of the Securities Act with respect to pro forma
financial statements and are based upon good faith estimates and assumptions
believed by the Issuers to be reasonable.
(c) Since the respective dates as of which information is given in the
Offering Memorandum, there has not been any change in the equity interests or
long-term debt of the Company or any of the Subsidiaries (as defined below), or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, partners' equity or results of operations of the
Company and the Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum (a "Material Adverse Change" or a
"Prospective Material Adverse Change," respectively). Except as set forth or
contemplated in the Offering Memorandum, neither the Company nor any of the
Subsidiaries has entered into any transaction or agreement (whether or not in
the ordinary course of business) material to the Company and the Subsidiaries
taken as a whole.
(d) Each of the Issuers has been duly organized or incorporated, as the
case may be, and is validly existing as a limited partnership or corporation, as
the case may be, in good standing under the laws of the State of Delaware, with
corporate or partnership power, as the case may be, and authority and all
necessary material authorizations, approvals, orders, licenses, certificates and
permits of and from regulatory or governmental officials, bodies and tribunals
to (i) own its properties and conduct its business in all material respects as
described in the Offering Memorandum; and (ii) enter into, deliver, incur and
perform its obligations under the Offering Agreements; and each of the Issuers
has been duly qualified as a foreign limited partnership or foreign corporation,
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, other than where
the failure to be so qualified or in good standing, singly or in the aggregate
with all other such failures, would
5
not have a material adverse effect on the general affairs, business, prospects,
management, financial position, partners' equity or results of operations of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) Except as set forth in the Offering Memorandum, all of the outstanding
equity interests of the Company have been duly authorized and validly issued and
are not subject to any preemptive or similar rights; and, except as described in
or expressly contemplated by the Offering Memorandum, there are no outstanding
rights (including, without limitation, preemptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any equity
interests in the Company or any of the Subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind to which the
Company or any of the Subsidiaries is a party relating to the issuance of any
equity interests of the Company or of any such Subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options.
(f) Each of the subsidiaries of the Company (the "Subsidiaries") that is a
corporation has been duly incorporated and is validly existing as a corporation
under the laws of its jurisdiction of incorporation, with corporate power and
authority to own and lease 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, other than where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.
Each Subsidiary that is a limited partnership has been duly formed and is
validly existing as a limited partnership in good standing under the laws of the
state of its organization, with partnership power and authority to own and lease
its properties and conduct its business as described in the Offering Memorandum,
and has been duly qualified as a foreign limited 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, other than where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. All of the issued equity
interests of each Subsidiary have been duly
6
authorized and validly issued and, as to shares of capital stock of any
Subsidiary that is a corporation, are fully paid and non-assessable, and (except
as otherwise set forth in the Offering Memorandum) will be owned, as of the
Closing Date, by the Company, directly or indirectly, free and clear of all
material liens, encumbrances, security interests or claims, except for the
pledge of such stock pursuant to the Senior Credit Facility (as defined in the
Offering Memorandum) as described in the Offering Memorandum.
(g) The general partner of the Company is FrontierVision Partners, L.P., a
Delaware limited partnership (the "General Partner"), which has been duly
organized and is validly existing as a limited partnership in good standing
under the laws of the State of Delaware with full partnership power and
authority to own its properties and to conduct its business as described in the
Offering Memorandum, and has been duly qualified as a foreign limited
partnership for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases property or conducts
any business so as to require such qualification other than where the failure to
be so qualified or in good standing would not reasonably be expected to have a
Material Adverse Effect.
(h) The general partner of the General Partner is FVP GP, L.P., a Delaware
limited partnership ("FVPGP"), which has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware with full partnership power and authority to own its properties and
to conduct its business as described in the Offering Memorandum, and has been
duly qualified as a foreign limited partnership for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases property or conducts any business so as to require such
qualification other than where the failure to be so qualified or in good
standing would not reasonably be expected to have a Material Adverse Effect.
(i) The general partner of FVPGP is FrontierVision Inc., a Delaware
corporation ("FV Inc."), which has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and to
conduct its business as described in the Offering Memorandum, and has been duly
qualified as a for-
7
eign corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases property or
conducts any business so as to require such qualification other than (i) the
State of Tennessee, where FV Inc. is processing the necessary application for
reinstatement to be qualified to do business or (ii) where the failure to be so
qualified or in good standing would not reasonably be expected to have a
Material Adverse Effect.
(j) This Agreement has been duly authorized, executed and delivered by the
Issuers.
(k) The Registration Rights Agreement has been duly authorized, executed
and delivered by the Issuers and constitutes a valid and legally binding
agreement of the Issuers, enforceable in accordance with its terms except (a)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium (whether general or specific), fraudulent conveyance
or similar laws relating to or affecting the enforcement of creditors' rights
generally, (b) the enforceability thereof may be subject to the application of
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (c) no representation is made herein
concerning the enforceability of (i) waivers of notice or of any other
constitutional, statutory or common law rights, including, without limitation,
waiver of stay, extension or usury laws, (ii) indemnification provisions to the
extent such provisions are deemed to violate public policy or federal or state
securities laws, and (iii) submissions to the personal jurisdiction of any
particular court.
(l) The Securities and the Exchange Securities (as defined in the
Registration Rights Agreement) have been duly authorized by each of the Issuers,
and, when issued and delivered pursuant to this Agreement or the Registration
Rights Agreement, as the case may be, and duly authenticated by the Trustee,
will have been duly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of each of the Issuers, entitled to the
benefits provided by the Indenture, except (a) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium (whether general
or specific), fraudulent conveyance or similar laws relating to or affecting the
enforcement of creditors' rights generally, (b) the enforceability
8
thereof may be subject to the application of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and (c) no representation is made herein concerning the enforceability of
(i) waivers of notice or of any other constitutional, statutory or common law
rights, including, without limitation, waiver of stay, extension or usury laws,
(ii) indemnification provisions to the extent such provisions are deemed to
violate public policy or federal or state securities laws, and (iii) submissions
to the personal jurisdiction of any particular court; the Indenture has been
duly authorized by each of the Issuers and, when executed and delivered by the
Issuers and the Trustee (assuming due authorization, execution and delivery by
the Trustee), the Indenture will constitute a valid and binding instrument; and
the Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Memorandum.
(m) Neither the Company nor any of the Subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default under
its respective Certificate of Limited Partnership, Limited Partnership
Agreement, Certificate of Incorporation or By-Laws (each an "Organizational
Document"), as the case may be, or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of them is a party or by
which any of them or any of their respective properties is bound, except for
violations and defaults which would not reasonably be expected to have a
Material Adverse Effect; the issue and sale of the Securities and the
performance by each of the Issuers of all of its obligations under the Offering
Agreements and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (including any default resulting after
notice or lapse of time or both) under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them is bound or to which any of
the property or assets of any of them is subject, nor will any such action
result in any violation of the provisions of any of their respective
Organizational Documents or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
any of them or any of their respective properties, including, without
limitation, any law, statute, rule or regula-
9
tion or any judgment, decree or order applicable to the cable television
industry in general, except for conflicts, breaches, defaults and violations
which would not reasonably be expected to have a Material Adverse Effect; and no
consent, approval, authorization, order, license, registration or qualification
of or with any such court or governmental agency or body, including, without
limitation, under the Communications Act of 1934, as amended (the
"Communications Act"), the Cable Communications Policy Act of 1984 (the "1984
Cable Act"), the Cable Television Consumer Protection and Competition Act of
1992 (the "1992 Cable Act"), the Telecommunications Act of 1996 (the "1996
Telecom Act" and, together with the 1984 Cable Act and the 1992 Cable Act, the
"Cable Acts") or any order, rule or regulation of the Federal Communications
Commission ("FCC"), is required for the issue and sale of the Securities, the
execution and delivery by each of the Issuers of, and the performance by each of
the Issuers of its obligations under, the Offering Agreements or the
consummation by each of the Issuers of the transactions contemplated by the
Offering Agreements, except (i) such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been obtained and are
in full force and effect under the Communications Act, the Cable Acts or any
order, rule or regulation of the FCC and such as may be required under state
securities or Blue Sky laws in connection with the purchase and resale of the
Securities by the Initial Purchasers, (ii) in the case of performance of the
Registration Rights Agreement, such as may be required under the Securities Act
and the Trust Indenture Act or (iii) where the failure to obtain such consents,
approvals, authorizations, orders, licenses, registrations or qualifications
would not reasonably be expected to have a Material Adverse Effect.
(n) Other than as set forth or contemplated in the Offering Memorandum
(including those matters referred to therein relating to general rulemakings and
similar matters relating generally to the cable television industry, in each
case on a national, regional, state or county basis), there are no legal or
governmental investigations, actions, suits or proceedings pending or, to the
best knowledge of each of the Issuers, threatened against or affecting the
Company or any of the Subsidiaries or any of their respective properties or to
which the Company or any of the Subsidiaries is or may be a party or to which
any property of the Company or any of the Subsidiaries is or may be subject
which, if determined adversely to the Co-
10
mpany or any of the Subsidiaries, would individually or in the aggregate have,
or would reasonably be expected to have, a Material Adverse Effect, and, to the
best of each of the Issuers' knowledge, no such proceedings are threatened by
governmental authorities or by others; and there are no statutes, regulations,
contracts or other documents that would be required to be described in a
registration statement or prospectus filed with the Commission with respect to a
public offering of the Securities which are not described in the Offering
Memorandum.
(o) KPMG Peat Marwick LLP and Xxxxxx Xxxxxxxx LLP are each independent
public accountants as required by the Securities Act.
(p) Each of the Company and the Subsidiaries has good and marketable title
in fee simple to all material items of real property owned by it and good and
marketable title to all material items of personal property owned by it, in each
case free and clear of all liens, encumbrances and defects, except such as are
described or referred to in the Offering Memorandum or such liens, encumbrances
or defects as do not materially affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company or any of the Subsidiaries in such a manner as would reasonably be
expected to result in a Material Adverse Effect; and any real property and
buildings held under lease by the Company or any of the Subsidiaries are held by
the Company or such Subsidiary under valid, existing and enforceable leases with
such exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or any of the
Subsidiaries in such a manner as would reasonably be expected to result in a
Material Adverse Effect.
(q) No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries, on the one hand, and the directors,
officers, stockholders, holders of units of partnership interest, customers or
suppliers of the Company or any of the Subsidiaries, on the other hand, which
would be required by the Securities Act to be described in a registration
statement or prospectus filed with the Commission with respect to a public
offering of the Securities which is not described in the Offering Memorandum.
11
(r) Neither of the Issuers is nor, after giving effect to the offering and
sale of the Securities, will be an "investment company" or entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act").
(s) The documents incorporated by reference in the Offering Memorandum,
when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(t) Each of the Company and the Subsidiaries owns or possesses, or can
acquire on reasonable terms, adequate licenses, trademarks, service marks, trade
names, copyrights and know-how (including trade secrets and other proprietary or
confidential information, systems or procedures) (collectively, "intellectual
property") necessary to conduct the business of the Existing Systems (as such
term is defined in the Offering Memorandum) now or proposed to be operated by it
as described in the Offering Memorandum, except where the failure to own,
possess or have the ability to acquire any such intellectual property would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect; and, except as disclosed in the Offering Memorandum, neither the
Company nor any of the Subsidiaries has received any notice of infringement of
or conflict with (and neither knows of any such infringement of or conflict
with) asserted rights of others with respect to any of such intellectual
property which, if any such assertions of infringement or conflict were
sustained, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(u) Each of the Company and the Subsidiaries owns, possesses or has
obtained, or can acquire on reasonable terms, all franchises, licenses, permits,
certificates, consents, orders, approvals and other authorizations
(collectively, "Permits") from, and has made all declarations and filings
(collectively, "Filings") with, all federal, state, local and other governmental
authorities including the FCC, and all courts and other tribunals (collectively,
the "Governmental Authorities") required to own or lease, as the case may be,
and to operate the Ex-
12
isting Systems and to carry on the business of the Existing Systems in the
manner and to the full extent now operated or proposed to be operated as
described in the Offering Memorandum, except where the failure to obtain such
Permits or make such Filings, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; such Permits contain
no materially burdensome restrictions not customarily imposed by Governmental
Authorities on cable television systems of the same class and type as those
owned by the Company and the Subsidiaries other than such as would not have a
Material Adverse Effect; the execution and delivery by each of the Issuers of,
and the performance by each of the Issuers of its obligations under, the
Offering Agreements, the consummation of the transactions contemplated hereby
and thereby, and the operation of the Existing Systems in the manner and to the
full extent now operated or proposed to be operated as described in the Offering
Memorandum, did not or will not result in a violation of the Communications Act,
the Cable Acts or any order, rule or regulation of the FCC or any other
Governmental Authority except for violations that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
the business and operations of the Company and the Subsidiaries comply in all
respects with the Communications Act, the Cable Acts and all published orders,
rules and regulations of the FCC except for any such non-compliance as would not
reasonably be expected to have a Material Adverse Effect, and to the best of
each of the Issuers' knowledge, no event has occurred which permits, or with
notice or lapse of time or both would permit, the revocation or non-renewal of
any Permits or Filings, or which might result in any other material impairment
of the rights of the Company or any of the Subsidiaries in the Permits except
for any such revocation, non-renewal or impairment which would not reasonably be
expected to have a Material Adverse Effect; and, other than matters described in
the Offering Memorandum and except as to any other matters relating generally to
the cable television industry (in each case on a national, regional, state or
county basis), there is no proceeding pending or, to each of the Issuers' best
knowledge, threatened before the FCC or any other Governmental Authority that
has or would be reasonably expected to have a Material Adverse Effect; and each
of the Company and the Subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of the date
hereof, except for
13
any such non-compliance as would not reasonably be expected to have a Material
Adverse Effect.
(v) The statistical and market-related data included or incorporated by
reference in the Offering Memorandum are based on or derived from sources which
the Issuers believe to be reliable and accurate.
(w) To the best knowledge of each of the Issuers, there are no existing or
threatened labor disputes with the employees of the Company or any of the
Subsidiaries which are reasonably likely to have a Material Adverse Effect.
(x) Each of the Company and the Subsidiaries (i) is in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
respective businesses and (iii) is in compliance with all terms and conditions
of any such permit, license or approval, except where such non-compliance with
Environmental Laws or failure to receive required permits, licenses or other
approvals would not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(y) Each employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is
maintained, administered or contributed to by the Company or any of the
Subsidiaries or any of their affiliates for employees or former employees of the
Company or any of the Subsidiaries and their affiliates has been maintained in
compliance in all material respects with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the "Code"); no
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan which is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the
present
14
value of all benefits accrued under such plan determined using reasonable
actuarial assumptions does not materially exceed the fair market value of the
assets of such plan (excluding for these purposes accrued but unpaid
contributions).
(z) [Intentionally Omitted]
(aa) Neither of the Issuers and, to the knowledge of the Issuers, no
affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")) (other than an Initial Purchaser) thereof 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 Securities Act) which
is or will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the offering contemplated
by the Offering Memorandum.
(bb) Neither of the Issuers and, to the knowledge of the Issuers, no person
acting on behalf of either of them has offered or sold the Securities by means
of any general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or, with respect to Securities sold outside the
United States to non-U.S. persons (as defined in Rule 902 under the Securities
Act), by means of any directed selling efforts within the meaning of Rule 902
under the Securities Act, and the Issuers and all persons acting on their behalf
have complied with and will implement the "offering restriction" within the
meaning of such Rule 902.
(cc) Assuming, and subject to, the accuracy of, and compliance with, the
representations and agreements of the Initial Purchasers made herein, including,
without limitation, pursuant to Annex I, it is not necessary in connection with
the offer, sale and delivery of the Securities in the manner contemplated by
this Agreement to register the Securities under the Securities Act or to qualify
an indenture under the Trust Indenture Act.
(dd) The Securities satisfy the requirements set forth in Rule 144A(d)(3)
under the Securities Act.
5. The Issuers, jointly and severally, covenant and agree with each of the
Initial Purchasers as follows:
15
(a) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchasers a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchasers reasonably object;
(b) if, at any time prior to the completion of the Offering (as defined in
the Offering Memorandum), any event shall occur as a result of which it is
necessary to amend or supplement the Offering Memorandum in order that the
Offering Memorandum does not 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 when the Offering Memorandum is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with law, forthwith to prepare and furnish, at the
expense of the Company, to the Initial Purchasers and to the dealers (whose
names and addresses the Initial Purchasers will furnish to the Company) to which
Securities may have been sold by the Initial Purchasers and to any other dealers
upon request, such amendments or supplements to the Offering Memorandum as may
be necessary so that the Offering Memorandum as so amended or supplemented will
not contain an 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
when the Offering Memorandum is delivered to a purchaser, not misleading or so
that the Offering Memorandum will comply with law;
(c) the Issuers will cooperate with the Initial Purchasers and their
counsel in connection with the registration or qualification of the Securities
for offering and sale by the Initial Purchasers and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may
reasonably request and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall any Issuer be obligated to
qualify to do business as a foreign limited partnership or corporation, as the
case may be, or as a securities dealer in any jurisdiction where it is not now
so qualified or to take any action that would subject it to taxation or service
of process in suits, other than those specifically arising out of the offering
or sale of the Securities, in any jurisdiction where it is not now so subject;
16
(d) for five years from the Closing Date, to furnish to the Initial
Purchasers copies of all reports or other communications (financial or other)
furnished to holders of Securities, and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange;
(e) during the period beginning on the date hereof and continuing to and
including the Business Day following the Closing Date, not to offer, sell,
contract to sell, or otherwise dispose of any debt securities of or guaranteed
by the Company or any of the Subsidiaries which are substantially similar to the
Securities;
(f) to use the net proceeds received by the Company from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Memorandum under the caption "Use of Proceeds";
(g) to use their best efforts to cause such Securities to be eligible for
the PORTAL trading system ("PORTAL") of the National Association of Securities
Dealers, Inc.;
(h) during the period of two years after the Closing Date, the Company will
not, and will not permit any of its "affiliates" (as defined in Rule 144 under
the Securities Act) (other than any of the Initial Purchasers) to, resell any of
the Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them;
(i) whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of their obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, including any expenses of the Trustee, (ii)
incident to the preparation, printing and distribution of the Offering
Memorandum (including all exhibits, amendments and supplements thereto), (iii)
incurred in connection with the registration or qualification and determination
of eligibility for investment of the Securities under the laws of such
jurisdictions as the Initial Purchasers may designate (including reasonable fees
of counsel for the Initial Purchasers and their dis-
17
bursements), (iv) in connection with the listing of the Securities on any
securities exchange or inclusion of the Securities on PORTAL, (v) in connection
with the printing (including word processing and duplication costs) and delivery
of the Preliminary and Supplemental Blue Sky Memoranda and any Legal Investment
Survey and the furnishing to the Initial Purchasers and dealers of copies of the
Offering Memorandum (and any amendments and supplements thereto), including
mailing and shipping, as herein provided, (vi) payable to rating agencies in
connection with the rating of the Securities, and (vii) incurred by the Issuers
in connection with a "road show" presentation to potential investors; provided,
however, that except as provided in this Section 5 or otherwise provided in
Section 7 or 10 hereof, the Initial Purchasers will pay all of their own costs
and expenses, including, without limitation, the fees of their counsel;
(j) to take all reasonable action that is appropriate or necessary to
assure that offerings of other securities will not be integrated for purposes of
the Securities Act with the offering contemplated hereby;
(k) not to solicit any offer to buy or offer to sell Securities by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act;
(l) while the Securities remain outstanding and are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, to, during any
period in which they are not subject to Section 13 or 15(d) under the Exchange
Act, make available to the Initial Purchasers and any holder of Securities in
connection with any sale thereof and any prospective purchaser of Securities, in
each case upon request, the information specified in, and meeting the
requirements of, Rule 144A(d)(4) ("Rule 144A(d)(4) Information") under the
Securities Act (or any successor thereto); and
(m) not to take any action prohibited by Regulation M under the Exchange
Act in connection with the distribution of the Securities contemplated hereby.
6. The several obligations of the Initial Purchasers hereunder to purchase
the Securities on the Closing Date are subject to the performance by each of the
Issuers of its obligations hereunder and to the following additional conditions:
18
(a) The representations and warranties of the Issuers contained herein
shall be true and correct, in all material respects, on and as of the Closing
Date as if made on and as of the Closing Date and the Issuers shall have
complied, in all material respects, with all agreements and all conditions on
their part to be performed or satisfied hereunder at or prior to the Closing
Date.
(b) Except as disclosed in the Offering Memorandum, subsequent to the
execution and delivery of this Agreement and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any notice have been given of
(i) any downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Company or any of the
Subsidiaries by any "nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
(c) Since the respective dates as of which information is given in the
Offering Memorandum, there shall not have been any change in the equity
interests or long-term debt of the Company or any of the Subsidiaries or any
Material Adverse Change, or any development involving a Prospective Material
Adverse Change, otherwise than as set forth or contemplated in the Offering
Memorandum, the effect of which in the judgment of the Initial Purchasers makes
it impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the Closing Date on the terms and in the manner contemplated
in the Offering Memorandum.
(d) The Initial Purchasers shall have received on and as of the Closing
Date a certificate of two executive officers of each of the Issuers, with
specific knowledge about the Issuers' financial matters, reasonably satisfactory
to the Initial Purchasers to the effect set forth in subsections (a) through (c)
of this Section and to the further effect that there has not occurred any
Material Adverse Change, or any development involving a Prospective Material
Adverse Change.
(e) Xxx, Xxxxxx & Xxxxxxxxx, PLLC, counsel for the Issuers, shall have
furnished to the Initial Purchasers their written opinion, dated the Closing
Date, in form and substance reasonably satisfactory to the Initial Purchasers,
to the effect that:
19
(i) each of the Company and FrontierVision Operating Partners, L.P.
("Operating Partners") has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to own its properties and conduct its
business as described in the Offering Memorandum;
(ii) each of Capital, FrontierVision Capital Corporation and FrontierVision
Operating Partners Inc. has been duly incorporated and is validy existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its business as
described in the Offering Memorandum;
(iii) based solely on a review of certificates from the appropriate
governmental authorities in each jurisdiction listed below, Operating Partners
has been duly qualified as a foreign limited partnership for the transaction of
business and is in good standing under the laws of Colorado, Georgia, Indiana,
Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, North
Carolina, Ohio, Pennsylvania, Tennessee, Vermont, Virginia and West Virginia;
(iv) the General Partner has been duly organized and is validly existing as
a limited partnership in good standing under the laws of the State of Delaware
with full partnership power and authority to own its properties and to conduct
its business as described in the Offering Memorandum, and, based solely on a
review of certificates from the appropriate governmental authorities in such
jurisdictions, has been duly qualified as a foreign limited partnership for the
transaction of business and is in good standing under the laws of Colorado,
Georgia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, North
Carolina, Ohio, Pennsylvania, Tennessee, Vermont, Virginia and West Virginia;
(v) FVPGP has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware with full
partnership power and authority to own its properties and to conduct its
business as described in the Offering Memorandum, and, based solely on a review
of certificates from the appropriate governmental
20
authorities in such jurisdictions, has been duly qualified as a foreign limited
partnership for the transaction of business and is in good standing under the
laws of Colorado, Georgia, Maine, Maryland, Massachusetts, Michigan, New
Hampshire, North Carolina, Ohio, Pennsylvania, Tennessee, Vermont, Virginia and
West Virginia;
(vi) FV Inc. has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware with full
corporate power and authority to own its properties and to conduct its business
as described in the Offering Memorandum, and, based solely on a review of
certificates from the appropriate governmental authorities in such
jurisdictions, has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of Colorado,
Georgia, Maine, Maryland, Michigan, New Hampshire, North Carolina, Ohio,
Pennsylvania, Vermont, Virginia and West Virginia; such counsel shall
additionally state that they have been informed that FV Inc. is processing the
necessary application for reinstatement to be qualified to do business in the
State of Tennessee;
(vii) to such counsel's knowledge, based solely upon its review of the
publicly available records of the FCC and upon inquiry of Operating Partners'
management, and only with respect to the period that the Existing Systems have
been owned by Operating Partners, other than as set forth or contemplated in the
Offering Memorandum (including those matters referred to therein relating to
general rulemakings and similar matters relating generally to the cable
television industry (in each case on a national, regional, state or county
basis)), there are no legal or governmental investigations, actions, suits or
proceedings pending or threatened against or affecting specifically the Company
or any of the Subsidiaries or any of their respective properties or to which the
Company or any of the Subsidiaries is or may be a party or to which any property
of the Company or any of the Subsidiaries is or may be subject which, if
determined adversely to the Company or any of the Subsidiaries, would
individually or in the aggregate have, or reasonably be expected to have, a
Material Adverse Effect;
21
(viii) this Agreement and the Registration Rights Agreement have been duly
authorized, executed and delivered by each of the Issuers;
(ix) assuming due authorization, execution and delivery of the Indenture by
the Trustee, the Securities have been duly authorized, executed and delivered by
each of the Issuers and, when duly authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will constitute valid and binding
obligations of each of the Issuers entitled to the benefits provided by the
Indenture, enforceable in accordance with the terms thereof except (a) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium (whether general or specific), fraudulent conveyance or similar laws
relating to or affecting the enforcement of creditors' rights generally, (b) the
enforceability thereof may be subject to the application of general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law) and (c) no opinion shall be expressed concerning the enforceability
of (i) waivers of notice or of any other constitutional, statutory or common law
rights, including, without limitation, waiver of stay, extension or usury laws,
(ii) indemnification provisions to the extent such provisions are deemed to
violate public policy or federal or state securities laws, and (iii) submission
to the personal jurisdiction of any particular court;
(x) the Indenture has been duly authorized, executed and delivered by each
of the Issuers and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding instrument of each of
the Issuers, enforceable against each of the Issuers in accordance with its
terms, except (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium (whether general or specific), fraudulent
conveyance or other similar laws relating to or affecting creditors' rights
generally, (b) the enforceability thereof may be subject to the application of
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (c) no opinion shall be expressed concerning
22
the enforceability of (i) waivers of notice or of any other constitutional,
statutory or common law rights, including, without limitation, waiver of stay,
extension or usury laws, (ii) indemnification provisions to the extent such
provisions are deemed to violate public policy or federal or state securities
laws, and (iii) submission to the personal jurisdiction of any particular court;
(xi) the Securities, the Indenture and the Registration Rights Agreement
conform in all material respects to the descriptions thereof in the Offering
Memorandum under the caption "Description of the Notes";
(xii) the execution and delivery of the Offering Agreements, the issuance
and sale of the Securities and the performance by each of the Issuers of its
obligations under the Securities and the Offering Agreements and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default (including any default resulting after notice or lapse of
time or both) under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument that has been filed as an exhibit to any
registration statement or periodic or current report filed by the Company or any
of the Subsidiaries with the Commission, nor will any such action result in any
violation of the provisions of the Organizational Documents of the Company or
any of the Subsidiaries or the Communications Act, the Cable Acts, any rule or
regulation of the FCC or any other law or statute customarily applicable to
transactions of the type contemplated by the Offering Agreements or, to such
counsel's knowledge, any other applicable law or statute or, to such counsel's
knowledge, any order, rule or regulation of any court or governmental agency or
body having jurisdiction over any of them or any of their respective properties,
including, without limitation, any federal law, statute, rule or regulation, or
to such counsel's knowledge, any judgment, decree or order specifically and
primarily applicable to the cable television industry (as opposed to such items
generally applicable to other industries), except for conflicts, breaches,
defaults and violations which individually and in the aggregate
23
would not reasonably be expected to have a Material Adverse Effect;
(xiii) no consent, approval, authorization, order, license, registration or
qualification of or with any court or governmental agency or body customarily
required for transactions of the type contemplated by the Offering Agreements,
including, without limitation, under the Communications Act, the Cable Acts or
any order, rule or regulation of the FCC, is required for the issuance and sale
of the Securities, the execution and delivery by each of the Issuers of, and the
performance by each of the Issuers of its obligations under, the Offering
Agreements or the consummation by each of the Issuers of the transactions
contemplated by the Offering Agreements, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications (i) as have
been obtained and are in full force and effect under the Communications Act, the
Cable Acts or any order, rule or regulation of the FCC and such as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Initial Purchasers, (ii) in the case
of the performance of the Registration Rights Agreement, such as may be required
under the Securities Act or the Trust Indenture Act or (iii) that may be
required in the future due to the operations or actions of the Company or any of
the Subsidiaries, the cable systems of Operating Partners or affiliated parties;
(xiv) the statements in the Offering Memorandum under the captions "Risk
Factors Regulation in the Cable Television Industry" and in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 under the caption
"Legislation and Regulation," insofar as such statements summarize applicable
provisions of the Communications Act, the Cable Acts and the published orders,
rules and regulations of the FCC promulgated thereunder, are accurate
summarizies in all material respects of the provisions purported to be
summarized under such captions in the Offering Memorandum, and the FCC statutes
and regulations summarized under such captions are the FCC statutes and
regulations that are material to the business of the Company and the
Subsidiaries as described in the Offering Memorandum;
24
(xv) neither of the Issuers is nor, after giving effect to the offering and
sale of the Securities, will be an "investment company" or entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act;
(xvi) the statements made in the Offering Memorandum under the caption
"Certain United States Federal Income Tax Considerations," insofar as they
purport to constitute summaries of matters of United States federal tax law and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects;
(xvii) no registration under the Securities Act of the Securities is
required in connection with the sale of the Securities to the Initial Purchasers
as contemplated by this Agreement and the Offering Memorandum or in connection
with the initial resale of the Securities by the Initial Purchasers in
accordance with Section 2 (including Annex I) of this Agreement, and prior to
the commencement of the Exchange Offer (as defined in the Registration Rights
Agreement) or the effectiveness of the Shelf Registration Statement (as defined
in the Registration Rights Agreement), the Indenture is not required to be
qualified under the Trust Indenture Act, in each case (i) assuming that the
purchasers who buy the Securities in the initial resales are Qualified
Institutional Buyers or non-U.S. Persons (as defined in Rule 902 under the
Securities Act), and (ii) assuming, and subject to, the accuracy of, and
compliance with, the Initial Purchasers' representations and agreements and
those of the Issuers contained in this Agreement (including, without limitation,
pursuant to Annex I) regarding the absence of a general solicitation in
connection with the sale of the Securities to the Initial Purchasers and the
initial resales thereof (it being understood that no opinion is expressed as to
any subsequent resale of any of the Securities); and
(xviii) nothing has come to such counsel's attention to lead such counsel
to believe that (except for the financial statements and other financial
information and statistical data included therein as to which such counsel need
express no belief) neither
25
the Offering Memorandum nor any amendment or supplement thereto made by the
Issuers prior to the Closing Date contained as of its date or contains as of the
Closing Date any untrue statement of a material fact or omitted as of its date
or omits as of the Closing Date 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.
In rendering such opinions, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Issuers and certificates or other written statements of public officials.
With respect to the matters to be covered in subparagraph (xviii) above, such
counsel's opinion may state that their opinion and belief expressed therein is
based upon their participation in conferences with officers and other
representatives of the Issuers, representatives of the independent certified
public accountants of the Issuers, and representatives and counsel of the
Initial Purchasers, at which conferences the contents of the Offering Memorandum
and related matters were discussed and that such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum and has not made an
independent investigation, check or verification of facts for the purpose of
rendering their opinion.
The opinion of Dow, Xxxxxx & Xxxxxxxxx, PLLC described above shall be
rendered to the Initial Purchasers at the request of the Issuers and shall so
state therein.
(f) The Initial Purchasers shall have received on and as of the Closing
Date an opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers,
with respect to such matters as the Initial Purchasers may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters.
(g) On or prior to the Closing Date, each of KPMG Peat Marwick (Denver) and
Xxxxxx Xxxxxxxx LLP (Boston) shall have furnished to the Initial Purchasers
letters, dated the date of delivery thereof, in form and substance satisfactory
to the Initial Purchasers, containing statements and information of the type
customarily included in
26
accountants' "comfort letters" with respect to the financial statements and
certain financial information contained in the Offering Memorandum.
(h) The Issuers shall have executed and delivered the Registration Rights
Agreement.
(i) On the Closing Date, the Senior Credit Facility (as defined in the
Offering Memorandum) shall be in full force and effect with respect to Operating
Partners on the terms described in the Offering Memorandum and no breach or
violation of any of the material terms or provisions thereof or Event of Default
(as defined in the Senior Credit Facility) (or an event which, with notice or
lapse of time or both, would constitute an Event of Default) thereunder shall
exist.
(j) On or prior to the Closing Date, the Issuers shall have furnished to
the Initial Purchasers such further certificates and documents as the Initial
Purchasers shall reasonably request.
7. The Issuers, jointly and severally, agree to indemnify and hold harmless
each Initial Purchaser, and each person, if any, that controls any Initial
Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the reasonable legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum or any
amendment or supplement thereto, or caused by 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 or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Initial Purchaser furnished to the Issuers in
writing by such Initial Purchaser expressly for use therein; provided, however,
that neither of the Issuers shall be liable to the Initial Purchasers or any
other person affiliated or associated therewith under the indemnification
provided for in this Section 7 to the extent that any such loss, claim, damage
or liability of such Initial Purchaser or other person results from the fact
that such Initial Purchaser sold Securities to a person or entity as to whom it
shall be established that there was not sent or
27
given, at or prior to the written confirmation of such sale, a copy of the
Offering Memorandum or of the Offering Memorandum as then amended or
supplemented if the Company has previously furnished copies thereof in
sufficient quantity to the Initial Purchasers, and the Offering Memorandum or
the Offering Memorandum as then amended or supplemented would have cured the
defect giving rise to such loss, claim, damage or liability.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless each of the Issuers, its directors and executive officers and each
person that controls either of the Issuers within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Issuers to each Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished to the
Issuers in writing by such Initial Purchaser expressly for use in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indem-
28
nified Persons, and that all such fees and expenses shall be reimbursed as they
are incurred. Any such separate firm for the Initial Purchasers and such control
persons of Initial Purchasers shall be designated in writing by X.X. Xxxxxx
Securities Inc. and any such separate firm for the Issuers, their directors,
their respective executive officers and such control persons of either of the
Issuers shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent (not to be unreasonably withheld or delayed), but if settled
with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment to the extent
provided in this Section 7. Notwithstanding the foregoing sentence, if at any
time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed Indemnified Person in
accordance with said third sentence prior to the date of such settlement to the
extent it considers such request to be reasonable or provided written notice to
the Indemnified Person to substantiate the non-payment of the unpaid balance as
reasonable. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person (not to be unreasonably withheld or delayed), effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional written release, in form and substance reasonably satisfactory to
such Indemnified Person, of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Is-
29
suers on the one hand and the Initial Purchasers on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Issuers on the one hand and the Initial
Purchasers on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Issuers
on the one hand and the Initial Purchasers on the other hand shall be deemed to
be in the same respective proportions as the net proceeds from the offering
(before deducting expenses but after deducting the discount to the Initial
Purchasers) received by the Issuers and the total discounts and commissions
received by the Initial Purchasers, in each case as set forth in the table on
the cover of the Offering Memorandum, bear to the aggregate offering price of
the Securities. The relative fault of the Issuers on the one hand and the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Issuers and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased by it were offered in
connection with the initial resale of the Securities exceeds the amount of any
damages that such Initial Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresenta-
30
tion (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective principal amount at
maturity of Securities set forth opposite their names in Schedule I hereto, and
not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Issuers set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser or any person controlling any Initial Purchaser or by or
on behalf of the Issuers, such Issuers' respective officers or directors or any
other person controlling either of the Issuers and (iii) acceptance of and
payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice given
to the Issuers, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of or guaranteed by the Company or
any of the Subsidiaries shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Initial Purchasers, is material and adverse and
which, in the judgment of the Initial Purchasers, makes it impracticable to
market the Securities on the terms and in the manner contemplated in the
Offering Memorandum.
9. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
31
If on the Closing Date, any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities which it or they have agreed to purchase
hereunder, and the aggregate principal amount at maturity of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
at maturity of Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount at maturity of Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount at maturity of Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as the Initial Purchasers may specify, to purchase the
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided, however, that in no
event shall the principal amount at maturity of Securities that any Initial
Purchaser has agreed to purchase pursuant to Section 1 be increased pursuant to
this Section 9 by an amount in excess of one-ninth of such principal amount at
maturity of Securities without the written consent of such Initial Purchaser. If
on the Closing Date, any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase Securities which it or they have agreed to purchase
hereunder, and the aggregate principal amount at maturity of Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount at maturity of Securities to be purchased, and arrangements
satisfactory to the Initial Purchasers and the Issuers for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Issuers. In any such case either the Initial Purchasers or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of such Initial Purchaser under this
Agreement or the offering contemplated hereunder.
10. If this Agreement shall be terminated by the Initial Purchasers, or any
of them, because of any failure or refusal on the part of either of the Issuers
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason either of the Issuers shall be unable to perform its
obligations under this Agreement or any condition of
32
the Initial Purchasers' obligations cannot be fulfilled, the Issuers agree to
reimburse the Initial Purchasers or such Initial Purchasers as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel) reasonably incurred by such Initial Purchasers in connection with this
Agreement or the offering contemplated hereunder, but the Issuers shall then be
under no further liability to the Initial Purchasers except as provided in
Section 5(i) and Section 7 hereof.
11. This Agreement shall inure to the benefit of and be binding upon the
Issuers, the Initial Purchasers, any controlling persons referred to herein and
their respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor by reason merely of
such purchase.
12. Any action by the Initial Purchasers hereunder may be taken by X.X.
Xxxxxx Securities Inc. alone on behalf of the Initial Purchasers, and any such
action taken by X.X. Xxxxxx Securities Inc. alone shall be binding upon the
Initial Purchasers. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be given to the Initial Purchasers c/o X.X. Xxxxxx Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telecopy: 212/648-5121 or 212/648-5951);
Attention: Syndicate Department. Notices to the Issuers shall be given at c/o
FrontierVision Holdings, L.P., 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxxx,
XX 00000 (telecopy: (000) 000-0000); Attention: Xxxx X. Xxx, Senior Vice
President and Chief Financial Officer.
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
33
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
FRONTIERVISION HOLDINGS, L.P.
By: FrontierVision Partners, L.P., its general partner
By: FVP GP, L.P., its general partner
By: FrontierVision Inc., its general partner
By:
Title:
FRONTIERVISION HOLDINGS CAPITAL II CORPORATION
By:
Title:
Accepted: December 2, 1998
X.X. Xxxxxx Securities Inc.
Chase Securities Inc.
By: X.X. Xxxxxx Securities Inc.
By:
Title:
ANNEX I
(A) The Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Initial Purchaser represents that it
has offered and sold the Securities and will offer and sell the Securities (i)
as part of their distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S, Rule 144A or pursuant to paragraph B
of this Annex under the Securities Act. Accordingly, each Initial Purchaser
agrees that neither it, its affiliates nor any persons acting on its or their
behalf has engaged or will engage in any directed selling efforts with respect
to the Securities and it and they have complied and will comply with the
offering restrictions requirement of Regulation S. Each Initial Purchaser agrees
that, at or prior to confirmation of sale of Securities (other than a sale
pursuant to Rule 144A or paragraph B of this Annex), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Initial Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Securities, except with its affiliates or with the prior written
consent of the Company.
(B) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the In-
itial Purchasers in the United States and to U.S. persons pursuant to Section 2
of this Agreement without delivery of the written statement required by
paragraph (A) above.
(C) Each Initial Purchaser further represents and agrees that (i) it has
not offered or sold, and will not offer or sell, in the United Kingdom by means
of any document, any Securities 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 business or which it is reasonable
to expect will so do, or in circumstances which do not otherwise constitute an
offer to the public within the meaning of the Public Offers of Securities
Regulations 1995 of Great Britain, (ii) it has complied, and will comply, with
all applicable provisions of the Financial Services Act 1986 and any regulation
promulgated thereunder of Great Britain 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, in
the United Kingdom, any document received by it in connection with the issuance
of the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(D) Each Initial Purchaser agrees that it will not offer, sell or deliver
any of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Initial
Purchaser understands that no action has been taken to permit a public offering
in any jurisdiction outside the United States where action would be required for
such purposes. Each Initial Purchaser agrees not to cause any advertisement of
the Securities to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Securities.
2
SCHEDULE I
Principal Amount
at Maturity of
Securities to Be
Initial Purchaser Purchased
X.X. Xxxxxx Securities Inc.....................................$60,865,000
Chase Securities Inc...........................................$30,433,000
Total.....................................................$91,298,000
