(Exhibit 1.1)
CSC HOLDINGS, INC.
(a Delaware corporation)
8 1/8% Senior Notes due 2009
PURCHASE AGREEMENT
Dated: July 8, 1999
CSC HOLDINGS, INC.
(a Delaware corporation)
$500,000,000 8 1/8% Senior Notes due 2009
PURCHASE AGREEMENT
July 8, 1999
To the Initial Purchasers Named in Schedule I
Ladies and Gentlemen:
CSC Holdings, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Initial Purchasers") $500,000,000 aggregate
principal amount of its 8 1/8% Senior Notes due 2009 (the "Securities"). The
Securities are to be sold to each Initial Purchaser, acting severally and not
jointly, in the respective principal amounts as are set forth in Schedule I
opposite the name of the Initial Purchaser. The Securities are to be issued
pursuant to an indenture to be dated as of July 1, 1999 (the "Indenture"),
between the Company and The Bank of New York, as trustee (the "Trustee"). The
Securities and the Indenture are more fully described in the Offering Memorandum
referred to below. Capitalized terms used herein without definition have the
respective meanings specified in the Offering Memorandum.
The Securities will be offered and sold to you without each being
registered under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance on an exemption therefrom. The Company has prepared an offering
memorandum, dated July 8, 1999 (such offering memorandum, together with the
documents incorporated by reference therein in the form first furnished to the
Initial Purchasers for use in connection with the offering of the Securities,
being hereinafter referred to as the "Offering Memorandum"), setting forth
information regarding the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Offering Memorandum in connection
with the offering and resale of the Securities.
The Company understands that you propose to make an offering of the
Securities on the terms set forth in the Offering Memorandum, as soon as you
deem advisable after this Agreement has been executed and delivered, (i) to
persons in the United
2
States whom you reasonably believe to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the 1933 Act,
as such rule may be amended from time to time ("Rule 144A"), in a transaction
under Rule 144A and/or (ii) to non-U.S. persons outside the United States to
whom offers and sales of the Securities may be made in reliance upon Regulation
S under the 1933 Act, provided that such offers and sales are made in the manner
contemplated by Section 2(d) hereof.
The holders of the Securities will be entitled to the benefits of the
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit A.
Section 1. Representations and Warranties. (a) The Company represents and
warrants to you and agrees that:
(i) As of the date of the Offering Memorandum, and at all times subsequent
thereto up to the Closing Time referred to below, neither the Offering
Memorandum nor any amendment or supplement thereto will include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that this representation and warranty
does not apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing by you to the Company expressly
for use in the Offering Memorandum or any amendment or supplement thereto.
(ii) The documents incorporated by reference in the Offering Memorandum, at
the time they were filed with the Securities and Exchange Commission (the
"Commission"), complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations").
(iii) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the meaning of
Rule 144A) as securities of the Company which are listed on a national
securities exchange registered under Section 6 of the 1934 Act or quoted in a
U.S. automated inter-dealer quotation system.
(iv) The Company is subject to Section 13 or 15(d) of the 1934 Act.
(v) Neither the Company nor any affiliate (as defined in Rule 501(b) under
the 0000 Xxx) of the Company has, directly or through any agent, sold, offered
for sale, solicited offers to buy, or otherwise negotiated in respect of, any
security (as defined in the 1933 Act) which is or will be integrated with the
sale of the Securities in a manner that would require the registration of the
Securities under the 1933 Act.
3
(vi) None of the Company, any of its affiliates or any person acting on its
or their behalf (other than you, as to whom the Company makes no representation)
has engaged, in connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the 1933 Act. With respect to those Securities sold in reliance on
Regulation S, (A) none of the Company, its affiliates or any person acting on
its or their behalf (other than you, as to whom the Company makes no
representation) has engaged in any directed selling efforts within the meaning
of Regulation S and (B) each of the Company, its affiliates and each person
acting on its or their behalf (other than you, as whom the Company makes no
representation) has complied with the offering restrictions requirement of
Regulation S.
(vii) KPMG LLP, who are reporting upon the audited financial statements and
schedules included or incorporated by reference in the Offering Memorandum, are
independent accountants within the meaning of Rule 101 of the American Institute
of Certified Public Accountants.
(viii) The consolidated historical financial statements included or
incorporated by reference in the Offering Memorandum present fairly the
consolidated financial position of the Company and its subsidiaries as of the
dates indicated and the consolidated results of operations and changes in
financial position of the Company and its subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The selected financial data included in the
Offering Memorandum present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated financial
statements included or incorporated by reference in the Offering Memorandum.
(ix) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with power and authority
(corporate and other) under such laws to own, lease and operate its properties
and conduct its business as described in the Offering Memorandum; and the
Company is duly qualified to transact business as a foreign corporation and is
in good standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
4
(x) The subsidiaries of the Company set forth on Schedule III are, as of
the date hereof, all of the "Restricted Subsidiaries", as such term is defined
in the indenture, dated as of July 1, 1998, for the Company's 7 1/4% Senior
Notes due 2008 and its 7 5/8% Senior Debentures due 2018 (the "1998 Indenture")
and the Bank Credit Agreement (as such term is defined in the Indenture). The
subsidiaries of the Company set forth on Schedule IV are "Unrestricted
Subsidiaries", as such term is defined in the 1998 Indenture (the Restricted
Subsidiaries and the Unrestricted Subsidiaries are hereinafter referred to
collectively as the "Subsidiaries"). The Subsidiaries on Schedules III and IV
with an asterisk by their names are the only subsidiaries of the Company which
had at December 31, 1998 assets in excess of 10% of the consolidated assets of
the Company and its subsidiaries as at that date or had, in the aggregate, for
the fiscal year then ended revenues or operating cash flow in excess of 10% of
consolidated revenues or consolidated operating cash flow of the Company and its
subsidiaries for such period (such Subsidiaries are referred to herein as the
"Material Subsidiaries"). In making this determination, any subsidiary acquired
after December 31, 1998 shall be deemed to have been acquired as of such date.
(xi) Each Material Subsidiary that is a corporation is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation with power and authority (corporate and other) under such laws to
own, lease and operate its properties and conduct its business; and each such
Material Subsidiary is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, or the Company is subject to no material liability
or disability by reason of any failure of such Material Subsidiary to be so
qualified or in good standing. All of the outstanding shares of capital stock of
each Material Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and, except as disclosed on Schedule III or IV to
this Agreement or as disclosed or contemplated by the Offering Memorandum, are
owned by the Company, directly or through one or more subsidiaries, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
(xii) Each of the Material Subsidiaries in which the Company or a
subsidiary of the Company is a limited or general partner (hereinafter called
the "Partnerships") has been duly formed and is validly existing as a limited or
general partnership, as the case may be, under the laws of its jurisdiction of
organization, with full power and authority to own, lease and operate properties
and conduct its business; all necessary filings with respect to the formation of
the Partnerships as limited or general partnerships (as the case may be) have
been made under such laws; and each of the Partnerships is duly qualified to
transact business and is in good standing in each other jurisdiction in which it
owns or leases property
5
of a nature, or transacts business of a type, that would make such qualification
necessary, or the Company is subject to no material liability or disability by
reason of any failure of such Partnerships to be so qualified and in good
standing.
(xiii) The Company had at March 31, 1999 a duly authorized and outstanding
capitalization as set forth in the Offering Memorandum under the caption
"Capitalization"; the Securities conform in all material respects to the
description thereof contained in the Offering Memorandum and such description
conforms in all material respects to the rights set forth in the instruments
defining the same.
(xiv) The Securities have been duly authorized by the Company. When
executed, authenticated, issued and delivered in the manner provided for in the
applicable Indenture and sold and paid for as provided herein, the Securities
will constitute valid and binding obligations of the Company entitled to the
benefits of the applicable Indenture and enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(xv) All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable;
and none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive rights of any stockholder of the Company.
(xvi) This Agreement has been duly authorized, executed and delivered by
the Company.
(xvii) Each of the Indenture and the Registration Rights Agreement has been
duly authorized by the Company, will be substantially in the form heretofore
delivered to you or attached hereto as Exhibit A, respectively, and, when duly
executed and delivered by the Company and the other parties thereto will
constitute a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) and, in the case of the Registration Rights Agreement, except
as any rights to indemnity thereunder may be limited by federal and state
securities laws and public policy considerations underlying such laws; and the
form of the Indenture conforms in all material respects to the description
thereof contained in the Offering Memorandum.
6
(xviii) Since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein or contemplated thereby,
there has not been (A) any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree and
there has not been any change in the capital stock or long-term debt of the
Company or any of its Subsidiaries or any change which the Company has
reasonable cause to believe will involve any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
financial position, stockholder's equity or results of operations of the Company
and its subsidiaries, considered as one enterprise, or (B) any transaction
entered into by the Company or any subsidiary, other than in the ordinary course
of business, that is material to the Company and its subsidiaries, considered as
one enterprise, or (C), except for the cash and stock dividends on the Series H
Preferred Stock and the cash and stock dividends paid on the Series M Preferred
Stock, each paid on April 1, 1999 and July 1, 1999, any dividend or distribution
of any kind declared, paid or made by the Company on its capital stock.
(xix) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it may be bound
or to which any of its properties may be subject, except for such defaults that
would not have a material adverse effect on the financial position,
stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise. The execution and delivery of the
Indenture, the Registration Rights Agreement and this Agreement (collectively,
the "Operative Documents"), the issuance and delivery of the Securities, the
consummation by the Company of the transactions contemplated by the Operative
Documents and the compliance by the Company with the terms of the Operative
Documents have been duly authorized by all necessary corporate action on the
part of the Company and do not and will not result in any violation of the
charter or by-laws of the Company or any Subsidiary, and do not and will not
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary under, (A) any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the Company or any Subsidiary is
a party or by which it may be bound or to which any of its properties may be
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the financial
position, stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise) or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any
7
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of its properties (except
for such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the financial position,
stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise) or (C) any material agreement or
other material instrument (including any franchise agreement, license, permit or
other governmental authorization granted by the Federal Communications
Commission (hereinafter called the "FCC"), The New York State Public Service
Commission on Cable Television, The Massachusetts Department of Public Service
or any other governing body having jurisdiction over cable television
operations) binding upon the Company or any of its Subsidiaries (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a material adverse effect on the financial position, stockholder's equity
or results of operations of the Company and its subsidiaries, considered as one
enterprise).
(xx) The statements in the Offering Memorandum under "Risk Factors" and
"Description of Securities" and the statements in the Company's annual report on
Form 10-K for the year ended December 31, 1998 (the "1998 Form 10-K"), which is
incorporated by reference in the Offering Memorandum, under "Business --
Competition -- Cable Television" and "Business -- Regulation -- Cable
Television", insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, with respect to such
legal matters, documents and proceedings, do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
(xxi) Except as disclosed in the Offering Memorandum, no authorization,
approval, consent or license of any government, governmental instrumentality or
court, domestic or foreign, is required (i) for the valid authorization,
issuance, sale and delivery of the Securities in the United States, or (ii) for
the execution, delivery or performance by the Company of this Agreement, the
Indenture or the Registration Rights Agreement except for registrations in
connection with the registration of the Securities pursuant to the Registration
Rights Agreement under the 1933 Act and registrations under state securities or
blue sky laws and except for any such consent, approval, authorization, order or
registration the failure of which to obtain or make or the absence of which
would result in no material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(xxii) Except as disclosed in the Offering Memorandum, there is no action,
suit or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the best of the Company's
knowledge, threatened against or
8
affecting the Company or any Subsidiary that the Company has reasonable cause to
believe will result in any material adverse change in the consolidated financial
position, stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise, or that will materially and
adversely affect the properties or assets of the Company and its subsidiaries,
considered as one enterprise, or that the Company has reasonable cause to
believe will materially adversely affect the consummation of the transactions
contemplated in this Agreement.
(xxiii) The Company and the Subsidiaries each has good and marketable title
to all material properties and assets described in the Offering Memorandum as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (A) are described in the Offering Memorandum or (B) are neither
material in amount nor materially significant in relation to the business of the
Company and its subsidiaries, considered as one enterprise; and any material
real property and buildings under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as do not interfere, to an extent material to the Company and its subsidiaries,
considered as one enterprise, with the use made and proposed to be made of such
property and buildings by the Company and the Subsidiaries.
(xxiv) Except as disclosed in the Offering Memorandum, the Company and the
Subsidiaries each owns, possesses or has obtained all material agreements,
governmental licenses, permits, certificates, consents, orders, approvals and
other material authorizations (including, without limitation, all material
governmental authorizations and agreements with public utilities and microwave
transmission companies and pole access and rental agreements) necessary to own
or lease, as the case may be, and to operate its properties and to carry on its
business as presently conducted; and neither the Company nor any Subsidiary has
received any notice of proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders, approvals or
authorizations.
(xxv) To the best knowledge of the Company and except as disclosed in the
Offering Memorandum, no labor problem exists with its employees or with
employees of the Subsidiaries that could reasonably be expected to materially
and adversely affect the financial position, stockholder's equity or results of
operations of the Company and its subsidiaries, considered as one enterprise.
(b) Any certificate signed by any officer of the Company or any Subsidiary
and delivered to you or to counsel for the Initial Purchasers in connection with
the offering of the Securities shall be deemed a representation and warranty by
the Company to each Initial Purchaser as to the matters covered thereby.
9
Section 2. Purchase, Sale and Resale of the Securities; Closing.
(a) On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, the Company agrees to
sell to you, and you agree, severally and not jointly, to purchase from the
Company, at the purchase price to be paid by the Initial Purchasers set forth in
Schedule II, the principal amount of Securities set forth opposite your name on
Schedule I, plus accrued interest, if any, from July 13, 1999 plus any
additional principal amount of Securities which you may become obligated to
purchase pursuant to Section 10 hereof.
(b) Payment of the purchase price for, and delivery of, the Securities
shall be made at the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place in The City of New York, at 10:00
A.M. on July 13, 1999, or at such other time not more than ten full Business
Days thereafter as shall be agreed upon by the Company and you, or as shall
otherwise be provided in Section 10 (such date and time of payment and delivery
being herein called the "Closing Time"). Payment shall be made by wire transfer
of same day federal funds to the Company to an account designated by the Company
to the Initial Purchasers, against delivery of the Securities to you for the
respective accounts of the several Initial Purchasers. Except as otherwise
provided in Schedule II hereto, the Securities shall be in such denominations
($1,000 or an integral multiple thereof) and registered in such names as you may
request in writing at least two full business days before the Closing Time.
(c) You have advised the Company that you propose to offer the Securities
for sale at the price set forth on Schedule II, upon the terms and conditions
set forth in this Agreement and in the Offering Memorandum. Each of you hereby,
severally, represents and warrants to, and agrees with, the Company that you (i)
are a qualified institutional buyer within the meaning of Rule 144A (a
"Qualified Institutional Buyer"), (ii) have not and will not solicit offers for,
or offer or sell, such Securities by means of any form of general solicitation
or general advertising or in any manner involving a public offering within the
meaning of Section 4(2) of the 1933 Act, including but not limited to the
methods described in Rule 502(c) of the 1933 Act, (iii) have not and will not
engage in any directed selling efforts (as defined in Rule 902 of the 0000 Xxx)
in the United States in connection with the Securities being offered and sold
pursuant to Regulation S under the 1933 Act and (iv) have solicited and will
solicit offers for such Securities only from, and have offered and will offer,
sell or deliver such Securities, as part of their initial offering, only to (A)
persons in the United States whom you reasonably believe to be Qualified
Institutional Buyers or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to you that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
10
delivery is being made in reliance on Rule 144A, and, in each case, in a
transaction under Rule 144A and (B) non-U.S. persons outside the United States
to whom offers and sales of the Securities may be made in reliance upon
Regulation S under the 1933 Act.
(d) In connection with the transactions described in Section 2(c)(iv)(B),
each Initial Purchaser, severally, represents and warrants to, and agrees with,
the Company that such Initial Purchaser will sell the Securities in such
transactions only in accordance with Regulation S under the 1933 Act and has not
offered or sold, and will not offer or sell, the Securities to, or for the
account or benefit of, U.S. persons (i) as part of its distribution at any time
or (ii) otherwise until 40 days after the Closing Time, and each Initial
Purchaser will send to each distributor, dealer or other person receiving a
selling concession, fee or remuneration to which it sells the Securities during
the restricted period a confirmation or other notice setting forth the
restrictions on offers and sales of the Securities within the United States or
to, or for the account or benefit of, U.S. persons. Terms used in this paragraph
have the meanings given to them by Regulation S under the 1933 Act.
(e) Each of you hereby severally represents that (i) it has not offered or
sold, and will not offer or sell, any Securities in the United Kingdom by means
of any document, other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in transactions which have not
resulted and will not result in an offer to the public within the meaning of the
Public Offer of Securities Regulations 1995 (the "Regulations"), (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 and the Regulations with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (iii) it has only issued or passed on and will only issue or pass on to any
persons in the United Kingdom any document received by it in connection with the
issue of the Securities if that person is of a kind described in Article 11(3)
of the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1988 or is a person to whom such document may otherwise lawfully be issued
or passed on.
(f) Each of you severally represents that it has not offered or sold and
will not offer or sell any Securities in transactions described in Section
2(c)(iv)(B) except in compliance with the applicable laws and regulations of the
jurisdictions in which such sales occur.
Section 3. Certain Covenants of the Company. The Company covenants with you
as follows:
11
(a) The Company has furnished or will furnish to you as many copies of the
Offering Memorandum, as it may then be amended or supplemented, as you may
reasonably request from time to time.
(b) The Company will not at any time make any amendment or supplement to
the Offering Memorandum (other than amendments of the documents incorporated by
reference to the Offering Memorandum or the filing of subsequent documents under
the 1934 Act), of which you shall not have previously been advised and furnished
a copy, or to which you or your counsel shall reasonably object. The Company
shall not file any document under the 1934 Act before the completion of the
offering of the Securities by you, if such document would be deemed to be
incorporated by reference in the Offering Memorandum and if the filing of such
document would cause the Offering Memorandum, as amended or supplemented by the
filing of such document, to contain an untrue statement of a material fact or to
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(c) If at any time prior to completion of the distribution of the
Securities by you to purchasers who are not your affiliates, any event shall
occur or condition exist as a result of which it is necessary, in the opinion of
counsel for you or counsel for the Company to amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will promptly
prepare such amendment or supplement as may be necessary to correct such untrue
statement or omission and furnish you such number of copies as you may
reasonably request. Except as otherwise required by the preceding sentence, the
Company will not be obligated to update the Offering Memorandum. Such updating
may be done by means of the filing of one or more documents under the 1934 Act
which are deemed incorporated by reference in the Offering Memorandum.
(d) Notwithstanding any provision of paragraph (b) or (c) to the contrary,
however, the Company's obligations under paragraphs (b) and (c) shall terminate
on the earliest to occur of (i) the third anniversary of the Closing Time, (ii)
the closing date of an Exchange Offer pursuant to the Registration Rights
Agreement, (iii) the effective date of a Shelf Registration Statement pursuant
to the Registration Rights Agreement and (iv) the date upon which you and your
affiliates cease to hold Securities acquired by you as part of their initial
distribution.
12
(e) The Company will use its reasonable best efforts, in cooperation with
you, to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as you may designate, if
any, and to maintain such qualifications in effect for a period of not less than
one year from the date of the Offering Memorandum; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be required by
the laws of each jurisdiction in which the Securities have been qualified as
above provided.
(f) For a period of three years after the Closing Time, the Company will
furnish to you copies of all annual reports, quarterly reports and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company to its
securityholders generally.
(g) Neither the Company nor any affiliate (as defined in Rule 501(b) of the
0000 Xxx) will solicit any offer to buy or offer or sell the Securities by means
of any form of general solicitation or general advertising. With respect to
those Securities sold in reliance on Regulation S, (A) none of the Company, its
affiliates or any person acting on its or their behalf (other than you, as to
whom the Company makes no representation) will engage in any directed selling
efforts within the meaning of Regulation S and (B) each of the Company, its
affiliates and each person acting on its or their behalf (other than you, as to
whom the Company makes no representation) will comply with the offering
restrictions requirement of Regulation S.
(h) Neither the Company nor any affiliate (as defined in Rule 501(b) of the
0000 Xxx) of the Company will offer, sell or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the 1933 Act) which will be
integrated with the sale of the Securities in a manner that would require the
registration of the Securities under the 1933 Act at a time when such Securities
are not so registered.
(i) The Company will not be or become, at any time prior to the expiration
of three years after the Closing Time, an open-end investment trust, unit
investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
13
(j) During the period from the Closing Time to the earlier of (i) two years
after the Closing Time, or (ii) the date of effectiveness of a registration
statement as contemplated in the Registration Rights Agreement, the Company will
not, and will not permit any of its "affiliates" (as defined in Rule 144 under
the 0000 Xxx) to, resell any of the Securities that have been reacquired by
them, except for Securities purchased by the Company or any of its affiliates
and resold in a transaction registered under the 1933 Act.
(k) The Company will, so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the 1933 Act,
either (i) file reports and other information with the Commission under Section
13 or 15(d) of the 1934 Act, or (ii) in the event it is not subject to Section
13 or 15(d) of the 1934 Act, furnish to holders of Securities and prospective
purchasers of Securities designated by such holders, upon request of such
holders or such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the 1933 Act to permit compliance with Rule
144A in connection with resales of the Securities.
(l) The Company will use its reasonable best efforts in cooperation with
you to permit the Securities sold in transactions described in Section
2(c)(iv)(A) to be eligible for clearance and settlement through The Depository
Trust Company.
(m) Each of the Securities will bear the following legend until, in the
opinion of counsel to the Company, such legend is no longer advisable because
the Securities are no longer subject to the restrictions on transfer described
therein:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE DATE OF ORIGINAL ISSUE HEREOF
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED
14
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT; PROVIDED THAT THE COMPANY SHALL HAVE THE RIGHT PRIOR TO ANY
SUCH OFFER, SALE, PLEDGE OR TRANSFER PURSUANT TO CLAUSE (E) ABOVE TO REQUIRE THE
DELIVERY OF AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY) OF
COUNSEL SATISFACTORY TO THE COMPANY, AND CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY.
(n) The Company will apply the net proceeds that it receives from the offer
and sale of the Securities in the manner set forth in the Offering Memorandum
under the heading "Use of Proceeds".
(o) The Company has been advised in writing by KPMG LLP, independent public
accountants to the Company, that the consolidated financial statements and
schedules audited by them and included in the Company's 1998 Form 10-K comply in
form in all material respects with the applicable accounting requirements of the
1934 Act and the related published rules and regulations thereunder.
Section 4. Payment of Expenses. The Company will pay and bear all costs and
expenses incident to the performance of its obligations under this Agreement,
including (a) the preparation and printing of the Offering Memorandum and any
amendments or supplements thereto, and the cost of furnishing copies thereof to
the Initial Purchasers, (b) the preparation, printing and distribution of this
Agreement, the Indenture and the Securities, (c) the delivery of the Securities
to the Initial Purchasers, (d) the fees and disbursements of the Company's
counsel and accountants, (e) any fees charged by rating agencies for rating the
Securities and (f) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee and the Transfer Agent, in connection
with the Indenture and the Securities.
If this Agreement is terminated by you in accordance with the provisions of
Section 5 or 9(a)(i), the Company shall reimburse the Initial Purchasers for
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
15
Section 5. Conditions of Initial Purchasers' Obligations. The obligations
of the several Initial Purchasers to purchase and pay for the Securities that
they have respectively agreed to purchase hereunder are subject to the accuracy
of the representations and warranties of the Company contained herein or in
certificates of any officer of the Company or any Subsidiary delivered pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At the Closing Time, you shall have received a signed opinion of
Xxxxxxxx & Xxxxxxxx, counsel for the Company, dated as of the Closing Time, in
form and substance satisfactory to counsel for the Initial Purchasers, to the
effect that:
(i) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware.
(ii) Each of the Indenture and the Registration Rights Agreement, dated
July 13, 1999 (the "Registration Rights Agreement"), between the Company and
you, has been duly authorized, executed and delivered by the Company; the
Securities have been duly authorized, executed, authenticated, issued and
delivered; and the Indenture and the Securities constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(iii) The execution and delivery by the Company of the Indenture, this
Agreement and the Registration Rights Agreement, the issuance of the Securities
in accordance with the Indenture and the sale of the Securities by the Company
to you pursuant to this Agreement do not, and the performance by the Company of
its obligations under the Indenture and this Agreement will not, violate the
Company's Certificate of Incorporation or By-Laws.
(iv) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware for the issuance, sale and delivery of the Securities
by the Company to you have been obtained or made.
(v) This Agreement has been duly authorized, executed and delivered by the
Company.
(vi) Neither registration of the Securities under the 1933 Act nor
qualification of the Indenture under the Trust Indenture Act of 1939 is required
for (i) the offer and sale of the Securities by the Company to the Initial
Purchasers or (ii)
START
16
the reoffer and resale of the Securities by the Initial, in each case (i)
and (ii) in the manner contemplated by the Purchase Agreement and the Offering
Memorandum relating to the Securities.
Such counsel shall also furnish you with a letter to the effect that as
counsel to the Company, they reviewed the Offering Memorandum, participated in
discussions with representatives of the Initial Purchasers and of the Company
and its accountants; between the execution of this Agreement and the Closing
Time, such counsel participated in further discussions with representatives of
the Initial Purchasers and of the Company and its accountants in which the
contents of certain portions of the Offering Memorandum and related matters were
discussed and reviewed, certain documents filed by the Company with the
Commission, certificates of certain officers of the Company, an opinion
addressed to the Initial Purchasers from Xxxxxx X. Xxxxx, Esq. and a letter from
the Company's independent accountants; on the basis of the information that such
counsel gained in the course of the performance of the services referred to
above, considered in the light of such counsel's understanding of the applicable
law and the experience such counsel have gained through their practice, they
confirm to you that, in such counsel's opinion, nothing that came to such
counsel's attention in the course of such review has caused such counsel to
believe that, as of the date of the Offering Memorandum or as of the date
hereof, the Offering Memorandum contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; such counsel shall
state that the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the process of preparing
an offering memorandum are such that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum except for those made under the captions
"Description of Securities" and "Plan of Distribution" in the Offering
Memorandum insofar as they relate to provisions of documents therein described;
also, such counsel need express no opinion or belief as to the financial
statements, pro forma financial statements or other financial data contained in
the Offering Memorandum, or as to the description of statutes, regulations,
proceedings or matters referred to in Section 5(c) hereof.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the Federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware, and no opinion as to federal or state communications
laws. Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and the Subsidiaries and certificates of public
officials.
17
(b) At the Closing Time, you shall have received a signed opinion of Xxxxxx
X. Xxxxx, Esq., Executive Vice President, Secretary and General Counsel for the
Company, in form and substance satisfactory to counsel to the Initial
Purchasers, to the effect that:
(i) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with corporate power and
authority under such laws to own, lease and operate its properties and conduct
its business as described in the Offering Memorandum.
(ii) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(iii) Each Material Subsidiary that is a corporation is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority under such laws to own, lease
and operate its properties and conduct its business. Each Material Subsidiary
that is a partnership is duly organized under the laws of the jurisdiction of
its organization.
(iv) All of the outstanding shares of capital stock of each Material
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; except as set forth on Schedules III and IV to this Agreement or
as disclosed in or as contemplated by the Offering Memorandum, all of such
shares are owned by the Company, directly or through one or more subsidiaries,
free and clear of any material pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind; no holder thereof is subject to personal
liability under the certificate of incorporation or by-laws of the respective
Material Subsidiary or the corporation law of the jurisdiction in which such
Material Subsidiary is organized by reason of being such a holder and none of
such shares was issued in violation of the preemptive rights of any stockholder
of such Material Subsidiary under the certificate of incorporation or by-laws of
such Material Subsidiary or the corporation law of the jurisdiction in which
such Material Subsidiary is organized.
(v) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or may be a party, or of which any of their properties are or
may be the subject, of a character which are required to be disclosed in the
1998 Form 10-K or any Form 10-Q of the Company, other than those disclosed
therein.
18
(vi) The documents incorporated by reference in the Offering Memorandum or
any further amendment or supplement thereto made by the Company prior to the
Closing Time (other than the financial statements and related schedules therein
and any untrue statement or omission of a material fact contained therein which
was corrected in the Offering Memorandum, as to which such counsel need express
no opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and he has no reason to believe
that such documents, read together, as of the date of the Offering Memorandum or
as of the Closing Time, contained or contain an untrue statement of a material
fact or omitted or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(vii) Such counsel does not know of any contracts or documents of a
character required to be described or referred to in the documents incorporated
by reference in the Offering Memorandum or to be filed as exhibits to the
documents incorporated by reference in the Offering Memorandum that are not
described, referred to or filed as required.
(viii) To the knowledge of such counsel, no default exists in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the Company's
1998 Form 10-K or filed as an exhibit to the 1998 Form 10-K or any subsequent
Form 10-Q of the Company, which default would have a material adverse effect on
the financial position, stockholder's equity or results of operations of the
Company and its subsidiaries, considered as one enterprise.
(ix) The execution and delivery of this Agreement and the Indenture by the
Company, the issuance and delivery of the Securities, the consummation by the
Company of the transactions contemplated in this Agreement and compliance by the
Company with the terms of this Agreement and the Indenture will not conflict
with the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
(including any franchise agreement, license, permit or other governmental
authorization granted by the FCC, The New York State Public Service Commission
on Cable Television, The Massachusetts Department of Public Service or any other
Federal or New York State governing body having jurisdiction over cable
television operations) known to such counsel to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or to
which any of the property or assets of the Company or any Subsidiary is subject,
which conflict, breach, violation or default
19
would have a material adverse effect on the financial position, stockholder's
equity or results of operations of the Company and its subsidiaries, taken as a
whole, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any Federal, New York
or Delaware General Corporation Law statute or any order, rule or regulation
known to such counsel of any Federal, New York or Delaware court or governmental
agency or body having jurisdiction over the Company or any Subsidiary or any of
their properties, which violation in each case would have a material adverse
effect on the financial position, stockholder's equity or results of operations
of the Company and its subsidiaries, taken as a whole; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by this
Agreement, except with respect to such consents, approvals, authorizations,
registrations or qualifications as may be required under state or foreign
securities laws in connection with the purchase and distribution of the
Securities by the Initial Purchasers.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than the Federal laws of the
United States (other than federal communications laws, as to which such counsel
need express no opinion), the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of any other jurisdiction, upon
opinions of other counsel, who shall be counsel satisfactory to counsel for the
Initial Purchasers, in which case the opinion shall state that he believes you
and he are entitled to so rely. Such counsel may also state that, insofar as
such opinion involves factual matters, he has relied, to the extent he deems
proper, upon certificates of officers of the Company and the Subsidiaries and
certificates of public officials.
(c) At the Closing Time, you shall have received a signed opinion of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as special communications counsel
to the Company, in form and substance satisfactory to counsel to the Initial
Purchasers, to the effect that:
(i) The approvals, if any, required to be obtained from the FCC to
consummate the transactions contemplated by this Agreement have been obtained
and are in full force and effect.
(ii) Such counsel does not know of any federal communications and copyright
statutes that are principally directed to the regulation of cable properties
applicable to the Company that are not described in the Offering Memorandum but
would be material and
20
relevant to the business of the Company, and the descriptions in the Offering
Memorandum of such statutes therein described are accurate and fairly summarize
the information shown.
(iii) The information in the Offering Memorandum under the captions "Risk
Factors -- Regulatory Risks Are Inherent and Substantial in Our Businesses",
"Risk Factors -- We Are Exposed to a Significant and Credible Risk of
Competition", "Risk Factors -- Recent FCC and Congressional Issues May Affect
Our Businesses" and "Risk Factors -- Competition from Telephone Companies" and
in the 1998 Form 10-K under the captions "Business -- Competition -- Cable
Television" and "Business -- Regulation Cable Television", to the extent that
such sections describe statutes, regulations and governmental proceedings or
matters involving federal communications and copyright law and policy and the
impact thereof on the business in which the Company and its subsidiaries are
engaged, has been reviewed by them and fairly represents the communications and
copyright law described therein applicable to the Company and its subsidiaries
as disclosed in the Offering Memorandum and material and relevant to the
business of the Company and its subsidiaries.
In giving such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the District of Columbia, the
Federal law of the United States and the corporate law of the State of Delaware,
upon opinions of other counsel, who shall be counsel satisfactory to counsel for
the Initial Purchasers, in which case the opinion shall state that they believe
you and they are entitled to so rely. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the Subsidiaries
and certificates of public officials.
(d) At the Closing Time, you shall have received the favorable opinion of
Shearman & Sterling, counsel for the Initial Purchasers, dated as of the Closing
Time, to the effect that the opinions delivered pursuant to Sections 5(a), 5(b)
and 5(c) appear on their face to be appropriately responsive to the requirements
of this Agreement except, specifying the same, to the extent waived by you, and
with respect to the incorporation and legal existence of the Company, the
Securities, this Agreement, the Indenture, the Offering Memorandum, the
documents incorporated by reference therein and such other related matters as
you may require. In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and no opinion as to federal or state
communications laws. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Subsidiaries and certificates of
public officials.
21
(e) At the Closing Time, (i) the Offering Memorandum, as it may then be
amended or supplemented, shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) there shall not have been,
since the respective dates as of which information is given in the Offering
Memorandum, any material adverse change or any development involving a
prospective material adverse change, in or affecting the financial position,
stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise, (iii) the Company shall have
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and (iv) the other
representations and warranties of the Company set forth in Section 1(a) shall be
accurate as though expressly made at and as of the Closing Time. At the Closing
Time, you shall have received a certificate of the President, a Vice Chairman or
a Vice President, and the Treasurer or Controller, of the Company, dated as of
the Closing Time, to such effect.
(f) You shall have received the letter specified in Sections 1 and 2 of
Exhibit B at the date hereof and the letter specified in Section 3 of Exhibit B
at the Closing Time.
(g) On or after the date hereof, (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
(h) At the Closing Time, the Securities shall have been designated as
eligible for trading in the Private Offering, Resale and Trading through
Automatic Linkages (PORTAL) market.
(i) At the Closing Time, counsel for the Initial Purchasers shall have been
furnished with all such documents, certificates and opinions as they may
reasonably request for the purpose of enabling them to pass upon the issuance
and sale of the Securities contemplated in this Agreement and the matters
referred to in Section 5(d) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements of the
Company, the performance of any of the covenants of the Company, or the
fulfillment of any of the conditions herein contained.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated
22
by you on notice to the Company at any time at or prior to the Closing Time, and
such termination shall be without liability of any party to any other party.
Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged untrue
statement of a material fact contained in or included the Offering Memorandum
(or any amendment or supplement thereto), and any documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including fees
and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).
(b) Each Initial Purchaser severally agrees to indemnify and hold harmless
the Company, its directors, officers, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity agreement
in Section 6(a), as incurred, but only with respect to untrue statements or
23
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser through you expressly for use in the Offering Memorandum (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for in Section
6 is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Initial Purchasers
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity incurred by the Company
and one or more of the Initial Purchasers, as incurred, in such proportions that
the Initial Purchasers are responsible for that portion represented by the
percentage that the discount hereunder with respect to the offering of the
Securities bears to the offering price of the Securities, and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls an Initial Purchaser within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as such Initial Purchaser,
and each director or officer of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
Section 8. Agreements to Survive Delivery. The agreements and other
statements of the Company or its officers and of the Initial Purchasers set
forth in or made pursuant to this Agreement will remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Company, or any Initial Purchaser or controlling person within the meaning of
Section 15 of the 1933 Act and will survive delivery of and payment for the
Securities.
24
Section 9. Termination of Agreement. (a) You may terminate this Agreement,
by notice to the Company, at any time at or prior to the Closing Time (i) if
there has been, since the respective dates as of which information is given in
the Offering Memorandum, any material adverse change or any development
involving a prospective material adverse change in or affecting the financial
position, stockholder's equity or results of operations of the Company and its
subsidiaries, considered as one enterprise, or (ii) if there has occurred any
outbreak or escalation of hostilities or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, impracticable to market the Securities or enforce contracts for
the sale of Securities or (iii) if trading in any securities of the Company has
been suspended by the Commission, the National Association of Securities
Dealers, Inc. or the American Stock Exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or in the over-the-counter
market has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by such
exchange or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6, 7 and 8 shall remain in effect.
Section 10. Default by One or More of the Initial Purchasers. If one or
more of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting Initial
Purchasers, or any other Initial Purchasers, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms set forth in this Agreement; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the Securities to be purchased pursuant to this Agreement, the
non-defaulting Initial Purchasers shall be obligated to purchase the full amount
thereof in the proportions that their respective purchase obligation proportions
bear to the purchase obligations of all non-defaulting Initial Purchasers, or
25
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the Securities to be purchased pursuant to this Agreement, this Agreement
shall terminate without liability on the part of any non-defaulting Initial
Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Offering Memorandum or in any other documents or
arrangements. As used herein, the term "Initial Purchaser" includes any person
substituted for an Initial Purchaser under this Section 10.
Section 11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to you shall be directed to Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxxx X. Xxxxxx, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, World Financial Center, North Tower - 30th Floor,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxxxx,
Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention of Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxx Xxxxxx Inc., 0 Xxxxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxx Xxxxxx, Xxxxxxx, Xxxxx & Co., 00
Xxx Xxxx - 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxx,
and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention of Xxx XxXxxxx, and notices to the Company shall
be directed to it at CSC Holdings, Inc., 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx
00000, attention of Xxxxxx X. Xxxxx, Esq., Executive Vice President, General
Counsel and Secretary, with a copy to Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention of Xxxx X. Xxxx, Esq.
Section 12. Parties. This Agreement is made solely for the benefit of the
several Initial Purchasers, the Company and, to the extent expressed, any person
controlling the Company or any of the Initial Purchasers, and the directors and
officers of the Company, and their respective executors, administrators,
successors and assigns and, subject to the provisions of Section 10, no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include any purchaser, as such
purchaser, from any of the several Initial Purchasers of the Securities. All of
the obligations of the Initial Purchasers hereunder are several and not joint.
26
Section 13. Governing Law and Time. This Agreement shall be governed by the
laws of the State of New York. Specified times of the day refer to New York City
time.
Section 14. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not considered to be part of this
Agreement.
Section 15. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the Initial Purchasers
in accordance with its terms.
Very truly yours,
CSC HOLDINGS, INC.
By /s/ Xxxxxxx X. Xxxx
----------------------
Name: Xxxxxxx X. Xxxx
Title: Vice Chairman
Confirmed and accepted as of the date first above written:
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX BARNEY INC.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By /s/ Xxxx Xxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
SCHEDULE I
Principal Amount of
8 1/8% Senior
Initial Purchaser Notes due 2009
----------------- --------------
Bear, Xxxxxxx & Co. Inc. $150,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated 150,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation 50,000,000
Xxxxxxx, Sachs & Co. 50,000,000
Xxxxxx Xxxxxxx & Co. Incorporated 50,000,000
Xxxxxxx Xxxxx Barney Inc. 50,000,000
Total $500,000,000
============
SCHEDULE II
CSC HOLDINGS, INC.
8 1/8% Senior Notes
due 2009
Principal amount to be issued: $500,000,000
Interest rate: 8 1/8%
Interest accrues from: July 13, 1999
Date of maturity: July 15, 2009
Redemption Provisions: None
Sinking fund requirements: None
Initial offering price to investors: 99.534% of the principal amount of the
Notes plus accrued interest from July 13, 1999.
Purchase price: 98.159% of the principal amount of the Notes plus accrued
interest from July 13, 1999.
Method of Payment: Payment shall be made to the Company in same day federal
funds by wire transfer.
Closing date, time and location: 10:00 A.M., July 13, 1999 at the offices of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Listing requirement: None
SCHEDULE III
RESTRICTED SUBSIDIARIES(1)
(* - material subsidiary)
3300 Lakeside Corporation
A-R Cable Investments, Inc.
A-R Cable Services - NY, Inc.
Arsenal MSub 2 Inc.
Arsenal MSub 7, Inc.
Cable Science Corporation
Cablevision Area 9 Corporation
Cablevision Fairfield Corporation
Cablevision Lightpath, Inc.
Cablevision MFR, Inc.
Cablevision of Boston, Inc.
Cablevision of Brookhaven, Inc.
Cablevision of Brookline Limited Partnership
Cablevision of Brookline, Inc.
Cablevision of Cleveland G.P., Inc.
Cablevision of Cleveland L.P., Inc.
Cablevision of Cleveland, L.P.
Cablevision of Connecticut Corporation
Cablevision of Connecticut Limited Partnership
Cablevision of Xxxxxx County, Inc.
Cablevision of Massachusetts, Inc. (f/k/a Cablevision of Nashoba, Inc.)
Cablevision of Michigan, Inc.
Cablevision of Monmouth, Inc.
Cablevision of New Jersey, Inc.
*Cablevision of New York City - Master L.P.
Cablevision of New York City - Phase I L.P.
Cablevision of Newark
Cablevision of Oakland, Inc.
Cablevision of Paterson, Inc.
Cablevision of Rockland/Ramapo, Inc.
Cablevision of Southern Westchester, Inc.
Cablevision of the Midwest Holding, Inc.
Cablevision of the Midwest, Inc.
Cablevision of Warwick, Inc.
Cablevision Systems Brookline Corporation
Cablevision Systems Dutchess Corporation
Cablevision Systems East Hampton Corporation
III-2
Cablevision Systems Great Neck Corporation
Cablevision Systems Huntington Corporation
Cablevision Systems Islip Corporation
Cablevision Systems Long Island Corporation
Cablevision Systems New York City Corporation
Cablevision Systems of Southern Connecticut Limited Partnership
Cablevision Systems Suffolk Corporation
Cablevision Systems Westchester Corporation
Communications Development Corporation
CSC Acquisition - MA, Inc.
CSC Acquisition - NY, Inc.
CSC Acquisition Corporation
CSC Gateway Corporation
CSC TKR, Inc.
CSC TKR I, Inc.
KRC/CCC Investment Partnership
NYC GP Corp.
NYC LP Corp.
Petra Cablevision Corporation
Xxxxxxx Cablevision Corp.
Suffolk Cable Corporation
Suffolk Cable of Shelter Island, Inc.
Suffolk Cable of Smithtown, Inc.
Telerama, Inc.
V Cable, Inc.
VC Holding, Inc.
SCHEDULE IV
UNRESTRICTED SUBSIDIARIES
(* - material subsidiary)
A-R Cable Services, Inc.
AMC II Holding Corporation(1)
AMC Productions, Inc.(2)
American Movie Classics Company
American Movie Classics Holding Corporation(1)
American Pop, LLC(1)
American Sports Classics, L.L.C.
Bravo Company
Bravo Holding Corporation(1)
Bravo International, a division of Bravo Company
Bravo Programming, Inc.(1)
Cable Networks, Inc.(1)
Cablevision Programming Incorporated
Cleveland Radio Holding, Inc.
CV Radio Associates, L.P.
Extra Help Holding Corporation(1)
Extra Help L.L.C.
Florida Holdings I, L.L.C.
Florida Holdings II, L.L.C.
Foxwatch Productions, Inc.
Garden Programming, L.L.C.
IFC Productions I L.L.C.
Independent Film Channel, a division of Bravo Company
*Madison Square Garden, L.P.(4)
Madison Square Garden CT, LLC
Metro Channel, L.L.C.
Metro Channel Holdings I, LLC
Metro Channel Holdings II, LLC
MSG Aircraft Leasing, LLC
MSG Boxing, LLC
MSG Flight Operations, LLC
MSG Eden Corp.
MSG/TJF Scarlet Productions, LLC
MuchMusic U.S.A. Venture
National Advertising Partners
National PSNA Holdings I, LLC
National PSNA Holdings II, LLC
IV-2
National Sports Partners
Neighborhood News Holdings, Inc.(1)
News 12 Holding Corporation(1)
News 12 New Jersey L.L.C.
News 12 The Bronx, LLC(1)
News 12 The Bronx Holding Corporation(1)
Next Wave Films, L.L.C.(1)
New England Sea Wolves, L.L.C.
New York Rangers Enterprises Company
Northern Ohio Interconnect
Prime SportsChannel Networks Associates
PS Holding Acquisition Corporation
Radio City Networks LLC
Radio City Networks Holdings I, LLC
Radio City Networks Holdings II, LLC
Radio City Productions, L.L.C.
Radio City Trademarks, L.L.C.
Rainbow Advertising Holdings, LLC(1)
Rainbow Advertising Sales Corporation(1)
Rainbow CT Holdings, Inc.(1)
Rainbow DBS Holdings, Inc.
Rainbow Garden Corp.
*Rainbow Media Holdings, Inc.(3)
*Rainbow Media Sports Holdings, Inc.
Rainbow MM Holdings Corporation
Rainbow National Sports Holdings, LLC(1)
Rainbow Network Communications(1)
Rainbow News 12 Company(1)
Rainbow NJ Holdings, Inc.(1)
Rainbow Program Enterprises, L.P.(1)
*Rainbow Regional Holdings, LLC
Rainbow Travel, Inc.(1)
Rainbow Westchester Holdings, Inc.(1)
Regional Chicago Holdings, L.L.C.
Regional Cincinnati Holdings I, LLC
Regional Cincinnati Holdings II, LLC
Regional Detroit Holdings, LLC
*Regional MSG Holdings, LLC
Regional NE Holdings I, LLC
Regional NE Holdings II, L.L.C.
IV-3
Regional Ohio Holdings I, LLC
Regional Ohio Holdings II, LLC
Regional Pacific Holdings, LLC
*Regional Programming Partners
RNC Holding Corporation(1)
Romance Classics, LLC(1)
Romance Classics Productions, LLC(1)
SC America Holding Corporation
SC Florida Holding Company, L.L.C.
SC Florida Holding Corporation
SC Los Angeles Holding Corporation(1)
Soccer/USA Partners, L.P.
SportsChannel America Associates(1)
SportsChannel America Soccer, Inc.
SportsChannel Associates(4)
SportsChannel Chicago Associates
SportsChannel Cincinnati Associates
SportsChannel Florida Associates
SportsChannel Florida Holding Company L.L.C.
SportsChannel Los Angeles Holding Corporation
SportsChannel New England Limited Partnership
SportsChannel Ohio Associates
SportsChannel Pacific Associates
SportsChannel Prism/Chicago Holding Partnership
SportsChannel Ventures, Inc.
The 31st Street Company, L.L.C.
The Story Channel, L.L.C.
The Story Channel, Inc.(1)
WKNR, Inc.
World Cinema, a division of Bravo Company
0000 Xxxxxxx Xxxxxxxx Corp.
000 Xxx Xxxxx Xxxx Corporation
1111 Xxxxxxx Corporation
0000 Xxxxx 000 Xxxx.
Cablevision Electronics Investments, Inc.
Cablevision Lightpath - CT, Inc.
Cablevision Lightpath - MA, Inc.
Cablevision Lightpath - MI, Inc.
Cablevision Lightpath - NJ, Inc.
IV-4
Cablevision Lightpath - NY, Inc.
Cablevision Lightpath - OH, Inc.
Cablevision PCS Investments, Inc.
Cablevision PCS Management, Inc.
Cablevision Real Estate Corporation
CCG Holdings, Inc.
CCC Xxxxxxx Cinema Corp.
CCC Xxxxxxx Xxxxx Cinema Corp.
CCC B.C. Realty Corp.
CCC Babylon Cinema Corp.
CCC Bala Cynwyd Cinema Corp.
CCC Bayonne Cinema Corp.
CCC Bedford Cinema Corp.
CCC Bellevue Cinema Corp.
CCC Bergenfield Cinema Corp.
CCC Bronxville Cinema Corp.
CCC Brooklyn Heights Cinema Corp.
CCC Cedar Grove Cinema Corp.
CCC Xxxxxxx Twin Cinema Corp.
CCC Cinema 100 Corp.
CCC Cinema 304 Corp.
CCC Clairidge Cinema Corp.
CCC Closter Cinema Corp.
CCC Cobble Hill Cinema Corp.
CCC Colony Cinema Corp.
CCC Edison Cinema Corp.
CCC Xxxxxxx Cinema Corp.
CCC Franklin Square Cinema Corp.
CCC Grand Avenue Cinema Corp.
CCC Great Neck Cinema Corp.
CCC Herricks Cinema Corp.
CCC Kin Mall Cinema Corp.
CCC Kisco Cinema Corp.
CCC Larchmont Cinema Corp.
CCC Madison Triple Cinema Corp.
CCC Mamaroneck Cinema Corp.
CCC Manasquan Cinema Corp.
CCC Manhasset Cinema Corp.
CCC Mansfield Cinema Corp.
CCC Xxxxxxxxxxx Cinema Corp.
IV-5
CCC Millburn Cinema Corp.
CCC Morristown Cinema Corp.
CCC Narberth Cinema Corp.
CCC New City Cinema Corp.
CCC Parsippany Cinema Corp.
CCC Plaza Cinema Corp.
CCC Port Washington Cinema Corp.
CCC Xxxxxx Cinema Corp.
CCC Rye Cinema Corp.
CCC Screening Zone Cinema Corp.
CCC Succasunna Cinema Corp.
CCC Summit Cinema Corp.
CCC Tenafly Cinema Corp.
CCC Washington Cinema Corp.
CCC Xxxxx Cinema Corp.
CCC West Milford Cinema Corp.
CCC Woodbridge Cinema Corp.
CCC Yonkers Cinema Corp.
CCC At Home Holding Corporation
CSC Art Greenwich Cinema LLC
CSC Xxxxxxx Cinema LLC
CSC Chelsea Cinema LLC
CSC Chelsea West Cinema LLC
CSC 00xx Xxxxxx Cinema LLC
CSC 00xx Xxxxxx Cinema LLC
CSC 62nd and Broadway Cinema LLC
CSC 62nd and First Cinema LLC
CSC 86th and Park Cinema LLC
CSC Greenwich Twin Cinema LLC
CSC Metro Cinema LLC
CSC Olympia Twin LLC
CSC Redbank Cinema LLC
CSC Soundview Cinema LLC
CSC Warner Quad Cinema LLC
CSC Waverly Cinema LLC
CSC Ziegfeld Cinema LLC
CSC Investments, Inc.
CSC Nassau, Inc.
CSC Technology, Inc. (f/k/a CSC Realty, Inc.)
CSC Transport, Inc.
IV-6
CSC Transport II, Inc.
ECC Holding Corporation
Knollwood Development Corp.
Missouri Cable Partners, L.P.
NCC LP Corp.
Northcoast Communications, L.L.C.
U.S. Cable Television Group, L.P.
V Cable G.P., Inc.
V-C Mo. G.P., Inc.
----------
(1) All of the capital stock or partnership interests (as the case may be) are
pledged to Toronto-Dominion under the terms of a Borrower Pledge Agreement,
dated as of April 2, 1997, as amended, between Rainbow Media Holdings, Inc.
(RMHI) and Toronto-Dominion (Texas), Inc., as administrative agent for the
Banks.
(2) All of the shares of AMC Productions, Inc. are pledged to Toronto-Dominion
under the terms of a Stock Pledge Agreement, dated as of April 2, 1997,
between American Movie Classics Holding Company and Toronto-Dominion
(Texas), Inc., as agent for the Banks.
(3) All of the shares of Class A and Class B Common Stock of Rainbow Media
Holdings, Inc. are pledged to Toronto-Dominion (Texas), Inc. under the
terms of the Stock Pledge Agreement, dated as of April 2, 1997, between
Cablevision Systems Corporation and Toronto-Dominion (Texas), Inc., as
administrative agent for the Banks.
(4) All of the capital stock, partnership interests or limited liability
company interests are pledged under the Credit Party Pledge Agreement,
dated as of June 6, 1997 to the Madison Square Garden, L.P. Credit
Agreement.
EXHIBIT A
Form of Registration Rights Agreement
EXHIBIT B
July 8, 1999
MATTERS TO BE COVERED BY LETTER OR LETTERS OF INDEPENDENT
PUBLIC ACCOUNTANTS
KPMG LLP shall have furnished to you the following letter or letters (in
each case in form and substance satisfactory to you):
(1) At the date hereof, a letter to the effect that:
(a) they are independent accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the applicable published
1933 Act Regulations;
(b) in their opinion, except as disclosed in the Offering Memorandum, the
audited consolidated financial statements and the related financial statement
schedules of the Company and its subsidiaries included or incorporated by
reference in such annual report on Form 10-K comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-K and the related published 1934 Act Regulations; and
(c) in addition to their examinations, inspections, inquiries and other
procedures referred to therein, they have performed such other procedures,
specified by you, not constituting an audit, as they have agreed to perform and
report on with respect to certain amounts, percentages, numerical data and other
financial information in the Form 10-K and have compared certain of such
amounts, percentages, numerical data and financial information with, and have
found such items to be in agreement with or derived from, the detailed
accounting records of the Company and its subsidiaries.
(2) At the date hereof, a letter with respect to each of the Company's
quarterly reports on Form 10-Q (each a "10-Q Letter") filed prior to the date
hereof and subsequent to the Company's most recently filed annual report on Form
10-K, to the effect that:
(a) they reaffirm as of the date of such letter (and as though made on the
date of such letter) all statements made in the 10-K Letter, except that the
procedures specified therein shall have been carried out to a specified date not
more than five days prior to the date of such 10-Q Letter;
40
(b) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of:
(i) a reading of minutes of all meetings of the stockholders and
directors of the Company and its subsidiaries and the Pricing Committee of
the Company's Board of Directors and any subsidiary committees from the
date of the latest audited consolidated financial statements to the
specified date referred to in Section 2(a);
(ii) a reading of the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or incorporated by
reference in the quarterly report on Form 10-Q dated the date of such 10-Q
Letter;
(iii) inquiries of certain officials of the Company and its
subsidiaries; and
nothing came to their attention that caused them to believe that the unaudited
condensed consolidated financial statements included or incorporated by
reference in such quarterly report on Form 10-Q do not comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act as
it applies to Form 10-Q and the related published 1934 Act Regulations or that
any material modifications should be made to the unaudited condensed
consolidated financial statements included or incorporated by reference in such
quarterly report for them to be in conformity with generally accepted accounting
principles, except as disclosed in the notes to such unaudited condensed
consolidated financial statements or as otherwise described in such 10-Q Letter;
(c) in addition to their examinations, inspections, inquiries and other
procedures referred to therein, they have performed such other procedures,
specified by you, not constituting an audit, as they have agreed to perform and
report on with respect to certain amounts, percentages, numerical data and other
financial information in the Form 10-Q and have compared certain of such
amounts, percentages, numerical data and financial information with, and have
found such items to be in agreement with or derived from, the detailed
accounting records of the Company and its subsidiaries.
(3) At the Closing Time, a letter dated the Closing Time (the "Closing
Letter"), to the effect that:
(a) they reaffirm as of the date of the Closing Letter (and as though made
on the date of the Closing Letter) all statements made in the 10-K Letter and in
each 10-Q Letter, if any, except that the procedures specified therein shall
have been carried out to a specified date not more than five days prior to the
date of the Closing Letter; and
(b) based on the procedures set forth in Section 2(b) (but carried out to
the specified date referred to in Section 3(a)), nothing came to their attention
that caused them to believe that, from the date of the latest balance sheet of
the Company and its subsidiaries included or incorporated by reference in the
Prospectus to such specified date, there were any increases or decreases in
financial statement amounts specified by you as they have agreed to perform.
