EXHIBIT 10.01
$325,000,000
ADELPHIA COMMUNICATIONS CORPORATION
9 1/4% Senior Notes due 2002
PURCHASE AGREEMENT
September 22, 1997
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation
(the "Company"), proposes, upon the terms and conditions set forth herein, to
issue and sell to you, as the initial purchaser (the "Initial Purchaser"),
$325,000,000 in aggregate principal amount of its 9 1/4% Senior Notes due 2002
(the "Senior Notes"). The Senior Notes will (i) have the terms and provisions
which are summarized in the Offering Memorandum (as defined herein), (ii) be in
the forms specified by the Initial Purchaser pursuant to Section 3 hereof, and
(iii) be issued pursuant to the provisions of an Indenture, to be dated as of
September 25, 1997 (the "Indenture"), between the Company and Bank of Montreal
Trust Company, as trustee (the "Trustee").
The Company wishes to confirm as follows their agreement with
you the Initial Purchaser in connection with the purchase and resale of the
Senior Notes.
1. Preliminary Offering Memorandum and Offering Memorandum.
The Senior Notes will be offered and sold to the Initial Purchaser without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company has
prepared a preliminary offering memorandum, dated September 19, 1997, which
incorporates by reference the Company's Quarterly Report on Form 10-Q for the
period ended June 30, 1997, Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, as amended by Form 10-K/A dated July 29, 1997 and definitive
Proxy Statement dated September 8, 1997 (the "Preliminary Offering Memorandum"),
and an offering memorandum, dated September 22, 1997, which incorporates by
reference the Company's Quarterly Report on Form 10-Q for the period ended June
30, 1997, Annual Report on Form 10-K for the fiscal year ended March 31, 1997,
as amended by Form 10-K/A dated July 29, 1997 and definitive Proxy Statement
dated September 8, 1997 (the "Offering Memorandum"), setting forth information
regarding the Company, the Senior Notes and the Exchange Notes (as defined
herein). Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto, if any. The Company hereby confirms that they have authorized the use
of the Preliminary Offering Memorandum and the Offering Memorandum in connection
with the offering and resale of the Senior Notes by the Initial Purchaser.
The Company understands that the Initial Purchaser proposes to
make offers (the "Exempt Resales") of the Senior Notes purchased by the Initial
Purchaser hereunder only on the terms set forth in the Offering Memorandum, and
Section 2 hereof, as soon as the Initial Purchaser deems advisable after this
Agreement has been executed and delivered, solely to persons whom the Initial
Purchaser reasonably believes to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs") (such persons also being referred to herein
as the "Eligible Purchasers").
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, the Senior Notes (and all securities issued
in exchange therefor, in substitution thereof) shall bear the following legend:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (4) TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS."
It is also understood and acknowledged that holders (including
subsequent transferees) of the Senior Notes will have the registration rights
set forth in the registration rights agreement (the "Registration Rights
Agreement"), to be dated the Closing Date, in substantially the form of Exhibit
A hereto, for so long as such Senior Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein, (i) a registration statement under the Act relating to the
Company's 9 1/4% Senior Notes due 2002 (the "Exchange Notes") to be offered in
exchange for the Senior Notes (the "Registered Exchange Offer") and (ii) under
certain circumstances, a shelf registration statement pursuant to Rule 415 under
the Act relating to the resale by certain holders of the Senior Notes, and to
use its best efforts to cause such registration statements to be declared
effective. As used herein, the Senior Notes and the Exchange Notes are
hereinafter referred to collectively as the "Notes." This Agreement, the
Indenture, the Notes and the Registration Rights Agreement are hereinafter
referred to collectively as the "Operative Documents."
2. Agreements to Sell, Purchase and Resell. (a) The Company
hereby agrees, on the basis of the representations, warranties and agreements of
the Initial Purchaser contained herein and subject to all the terms and
conditions set forth herein, to issue and sell to the Initial Purchaser and,
upon the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Initial Purchaser agrees to purchase from the Company, at a purchase price
of 99.0% of the principal amount thereof, all of the Senior Notes. The Company
shall not be obligated to deliver any of the Senior Notes to be delivered
hereunder except upon payment for all of the Senior Notes to be purchased as
provided herein.
(b) The Initial Purchaser hereby represents and warrants to
the Company that it will offer the Senior Notes for sale upon the terms and
conditions set forth in this Agreement and in the Offering Memorandum. The
Initial Purchaser hereby represents and warrants to, and agrees with, the
Company that such Initial Purchaser (i) is either a QIB or other institutional
"accredited investor," as defined in Rule 501(a)(1), (2), (3) or (7) under the
Act (each, an "Accredited Institution") in either case with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Senior Notes; (ii) is
purchasing the Senior Notes pursuant to a private sale exempt from registration
under the Act; (iii) in connection with the Exempt Resales, will solicit offers
to buy the Senior Notes only from, and will offer to sell the Senior Notes only
to, the Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the
Senior Notes, nor has it offered or sold the Senior Notes by, or otherwise
engaged in, any form of general solicitation or general advertising (within the
meaning of Regulation D; including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising) in connection with the offering of the Senior Notes. The Initial
Purchaser has advised the Company that the Initial Purchaser will initially
offer the Senior Notes to Eligible Purchasers at a price of 100.0% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance of the Senior Notes. Such price may be changed by the Initial Purchaser
at any time thereafter without notice.
The Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Sections 7(d) and 7(h) hereof, counsel to the Company and counsel to the Initial
Purchaser, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchaser hereby
consents to such reliance.
3. Delivery of the Notes and Payment Therefor. Delivery to the
Initial Purchaser of and payment for the Senior Notes shall be made at the
office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000 at 9:00 A.M., New York City time, on September 25, 1997 (the "Closing
Date"). The place of closing for the Senior Notes and the Closing Date may be
varied by agreement between the Initial Purchaser and the Company.
The Senior Notes will be delivered to the Initial Purchaser
against payment of the purchase price therefor in immediately available funds.
The Senior Notes will be evidenced by one or more global securities in
definitive form (the "Global Note") and will be registered in the name of Cede &
Co. as nominee of The Depository Trust Company ("DTC"). The Senior Notes to be
delivered to the Initial Purchaser shall be made available to the Initial
Purchaser in New York City for inspection and packaging not later than 9:30
A.M., New York City time, on the business day next preceding the Closing Date.
4. Agreements of the Company. The Company agrees with
the Initial Purchaser as follows:
(a) The Company will furnish to the Initial Purchaser, without
charge, such number of copies of the Offering Memorandum as the Initial
Purchaser may reasonably request.
(b) The Company will not make any amendment or supplement to
the Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchaser shall not previously have been advised or to which the Initial
Purchaser shall reasonably object after being so advised, including by way of
filing any document with the Commission that would be incorporated therein by
reference.
(c) Prior to the execution and delivery of this Agreement, the
Company shall have delivered or will deliver to the Initial Purchaser, without
charge, in such quantities as the Initial Purchaser shall have requested or may
hereafter reasonably request, copies of the Preliminary Offering Memorandum. The
Company consents to the use, in accordance with the securities or Blue Sky laws
of the jurisdictions in which the Senior Notes are offered by the Initial
Purchaser and by dealers, prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Company. The Company
consents to the use of the Offering Memorandum in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Senior Notes are offered by
the Initial Purchaser and by all dealers to whom Senior Notes may be sold, in
connection with the offering and sale of the Senior Notes.
(d) If, at any time prior to completion of the distribution of
the Senior Notes by the Initial Purchaser to Eligible Purchasers, any event
shall occur that in the judgment of the Company, or in the opinion of counsel
for the Initial Purchaser, should be set forth in the Offering Memorandum in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Offering Memorandum in order to comply with any law, the Company will
forthwith prepare an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Initial Purchaser and dealers a reasonable number
of copies thereof.
(e) The Company will cooperate with the Initial Purchaser and
with its counsel in connection with the qualification of the Senior Notes for
offering and sale by the Initial Purchaser and by dealers under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchaser may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Senior Notes, in any jurisdiction where it is not now so subject.
(f) So long as any of the Notes are outstanding, the Company
will furnish to the Initial Purchaser (i) as soon as available, a copy of each
report of the Company mailed to stockholders generally or filed with any stock
exchange or regulatory body and (ii) from time to time such other information
concerning the Company as the Initial Purchaser may reasonably request.
(g) If this Agreement shall terminate or shall be terminated
after execution and delivery pursuant to any provisions hereof (otherwise than
by notice given by the Initial Purchaser terminating this Agreement pursuant to
Section 10 hereof) or if this Agreement shall be terminated by the Initial
Purchaser because of any failure or refusal on the part of the Company to comply
with the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Initial Purchaser for all out-of-pocket expenses
(including reasonable fees and expenses of its counsel) reasonably incurred by
it in connection herewith, but without any further obligation on the part of the
Company for loss of profits or otherwise.
(h) The Company will apply the net proceeds from the sale of
the Senior Notes to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum under the caption "Use of
Proceeds."
(i) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Company has not taken, nor will
any of them take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Senior Notes to facilitate the sale or resale of the Senior
Notes. Except as permitted by the Act, the Company will not distribute any
offering material in connection with the Exempt Resales.
(j) The Company will use its best efforts to permit the Notes
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL Market and to permit the Notes to be eligible
for clearance and settlement through DTC.
(k) From and after the Closing Date, so long as any of the
Notes are outstanding and are "restricted securities" within the meaning of the
Rule 144(a)(3) under the Act or, if earlier, until three years after the Closing
Date, and during any period in which the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Company will furnish to holders of the Notes and prospective purchasers of
Notes designated by such holders, upon request of such holders or such
prospective purchasers, the information (the "Additional Company Information")
required to be delivered pursuant to Rule 144A(d)(4) under the Act to permit
compliance with Rule 144A in connection with resales of the Notes.
(l) The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 relating to issuers doing
business with Cuba.
(m) The Company agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Senior Notes in a manner
that would require the registration under the Act of the sale to the Initial
Purchaser or the Eligible Purchasers of the Senior Notes.
(n) The Company agrees to comply with all the terms and
conditions of the Registration Rights Agreement and all agreements set forth in
the representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
(o) The Company agrees to cause the Exchange Offer to be made
in the appropriate form, as contemplated by the Registration Rights Agreement,
to permit registration of the Exchange Notes to be offered in exchange for the
Senior Notes, and to comply with all applicable federal and state securities
laws in connection with the Registered Exchange Offer.
(p) The Company agrees that prior to any registration of the
Senior Notes pursuant to the Registration Rights Agreement, or at such earlier
time as may be required, the Indenture shall be qualified under the Trust
Indenture Act of 1939 (the "1939 Act") and any necessary supplemental indentures
will be entered into in connection therewith.
(q) The Company will not voluntarily claim, and will resist
actively all attempts to claim, the benefit of any usury laws against holders of
the Notes.
(r) The Company will do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchaser's
obligations hereunder to purchase the Senior Notes.
5. Representations and Warranties of the Company. The
Company represents and warrants to the Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the offering of the
Senior Notes. The Preliminary Offering Memorandum or the Offering
Memorandum, as the case may be, and any amendments or supplements
thereto did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial
Purchaser concerning the Initial Purchaser expressly for use therein
(the "Initial Purchaser Information"). Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
(b) The Company has not sustained since June 30, 1997 any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Memorandum;
and, since the respective dates as of which information is given in the
Offering Memorandum, there has not been any reduction in the
consolidated stockholders' equity or change in the capital stock, as
applicable (other than reductions in the ordinary course of business
consistent with prior periods), material increase in the total amount
of short-term debt (excluding trade payables) and long-term debt of the
Company or any of its material subsidiaries (the "Subsidiaries") or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, partners' equity, shareholders' equity
or results of operations of the Company and its Subsidiaries, otherwise
than as set forth or contemplated in the Offering Memorandum;
(c) Each of the Company and its Subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Offering Memorandum or such as do not affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Subsidiaries; and any real property and buildings held under lease by
the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries;
except in any case that would not have a material adverse effect on the
business, general affairs, management, financial position, partners
equity or shareholders' equity (other than reductions in the ordinary
course of business consistent with prior periods), results of
operations or prospects of the Company and its Subsidiaries, taken as a
whole a "Material Adverse Effect";
(d) (i) Each of the Subsidiaries that are partnerships has
been duly formed and is validly existing as a partnership in good
standing under the laws of its state of formation, with full power and
authority (partnership and other) to own its properties and conduct its
business as described in the Offering Memorandum, and has been duly
qualified as a foreign partnership for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction except where the failure to so qualify would not have a
Material Adverse Effect; and (ii) each of the Company and the
Subsidiaries that are corporations has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its state of incorporation, with full power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material
Adverse Effect;
(e) Each of the Company and its Subsidiaries has the ownership
or authorized capitalizations, as the case may be, as set forth in the
Offering Memorandum, and all of the partnership interests of the
Subsidiaries that are partnerships and all of the issued shares of
capital stock of its Subsidiaries that are corporations have been duly
and validly authorized and issued and with respect to shares of capital
stock are fully paid and non-assessable; and all of the partnership
interests of the Subsidiaries disclosed in the Offering Memorandum as
being owned directly or indirectly by the Company and all of the issued
shares of capital stock of the Subsidiaries that are corporations have
been duly and validly authorized and issued are fully paid and
non-assessable and are owned directly or indirectly by the Company free
and clear of all liens, encumbrances, equities or claims (other than
liens to secure indebtedness under credit facilities disclosed in the
Offering Memorandum); and ownership of the various interests and shares
of the Company and its Subsidiaries is as described in the Offering
Memorandum;
(f) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture under which they are to be issued, which will
be substantially in the form previously delivered to the Initial
Purchaser; the Indenture has been duly authorized by the Company and,
when executed and delivered by the Company and the Trustee, the
Indenture will constitute a valid and legally binding instrument,
enforceable in accordance with its terms against the Company, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Notes and the
Indenture will conform to the descriptions thereof in the Offering
Memorandum and will be in substantially the form previously delivered
to the Initial Purchaser;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Senior Notes) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, none of the Company or any of
their affiliates (other than the Initial Purchaser or any person acting
on its behalf as to which the Company makes no representation) has
taken, directly or indirectly, any action which is designed to or which
has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Senior Notes;
(i) The Registration Rights Agreement has been duly authorized
by the Company and, when executed and delivered by the Company and the
Initial Purchaser, will constitute a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Registration Rights Agreement will conform to the description thereof
in the Offering Memorandum and will be in substantially the form
previously delivered to the Initial Purchaser;
(j) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or instrument or other agreement or
instrument (including, without limitation, any license or franchise
granted to the Company or one of its Subsidiaries by a local
franchising governmental body) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or has rights under or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject, nor will such action result in any violation of the provisions
of the certificate of incorporation or bylaws of the Company or its
Subsidiaries that are corporations or the certificates of limited
partnership or the partnership agreements of its Subsidiaries that are
partnerships or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Notes or the consummation by the Company
of the transactions contemplated by this Agreement, the Indenture or
the Registration Rights Agreement, other than (i) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Senior Notes by the Initial Purchaser,
(ii) the filing of a registration statement by the Company with the
Commission pursuant to the Act pursuant to the Registration Rights
Agreement, and (iii) such other consents, approvals, authorizations,
registrations or qualifications as may be required under the Act, state
or foreign securities or Blue Sky laws in connection with the exchange,
offer or resale registration contemplated in the Offering Memorandum
and described in the Registration Rights Agreement in connection with
the purchase and resale of the Senior Notes by the Initial Purchaser;
(k) None of the Company or its Subsidiaries is in violation of
its certificate of incorporation or bylaws, as the case may be, or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, sale/leaseback agreement, loan agreement or other
similar financing agreement or instrument or other agreement or
instrument (including, without limitation, any license or franchise
granted to the Company or a subsidiary by a local franchising
governmental body) to which the Company or a subsidiary is a party or
by which it or any of its properties may be bound, except for such
defaults as would not have individually or in the aggregate a Material
Adverse Effect;
(l) The statements set forth in the Offering Memorandum under
the caption "Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Notes, and under the captions
"Business," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair in all material respects;
(m) When the Senior Notes are issued and delivered pursuant to
this Agreement, the Senior Notes will not be of the same class (within
the meaning of Rule 144A under the Act) as securities of the Company
which are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system;
(n) None of the Company or its Subsidiaries is or, after
giving effect to the offering and sale of the Notes, will be an
"investment company", or an entity "controlled" by an "investment
company", as such terms are defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(o) None of the Company or any person acting on its or their
behalf (other than the Initial Purchaser, as to which the Company makes
no representation or warranty) has offered or sold the Senior Notes by
means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Act;
(p) Except for (i) the offering and sale of $150,000,000
aggregate principal amount of the Company's 10 1/2% Senior Notes due
2004 and (ii) the issuance of $350,000,000 aggregate principal amount
of the Company's Series B 9_% Senior Notes due 2007 in exchange for
previously issued and outstanding Series A 9_% Senior Notes due 2007,
within the preceding six months, none of the Company or any other
person acting on behalf of the Company (other than the Initial
Purchaser, as to which the Company makes no representation or warranty)
has offered or sold to any person any Notes, or any securities of the
same or a similar class as the Notes, other than Senior Notes offered
or sold to the Initial Purchaser hereunder. The Company will take
reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as
defined in Rule 902 under the Act) of any Notes or any substantially
similar security issued by the Company, within six months subsequent to
the date on which the distribution of the Notes has been completed (as
notified by the Initial Purchaser), is made under restrictions and
other circumstances reasonably designed not to affect the status of the
offer and sale of the Notes in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the
registration provisions of the Act;
(q) None of the Company or any of their affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(r) Other than as set forth in the Offering Memorandum
(including those matters referred to therein relating to general
rulemakings and similar matters relating generally to the cable
television industry), there are no legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a party or
of which any property of the Company or any of its Subsidiaries is the
subject which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or by others; and except with respect to general rulemakings and
similar matters relating generally to the cable television industry,
during the time the Systems (as defined below) have been owned by the
Company or a subsidiary (i) there has been no adverse judgment, order,
or decree issued by the United States Federal Communications Commission
(the "FCC") relating to any of the Systems that has not been disclosed
in the Offering Memorandum that would be required to be disclosed in a
public offering registered under the Act; (ii) there are no actions,
suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its
Subsidiaries or any System; and (iii) to the Company's knowledge, after
due inquiry, there is no reasonable basis for any such action, suit,
proceeding or investigation;
(s) Deloitte & Touche LLP, who have reported on the financial
statements of the Company, is an independent public accountant as
required by the Act and the rules and regulations of the Commission
thereunder;
(t) This Agreement has been duly authorized, executed and
delivered by the Company;
(u) Except for matters covered by paragraph (x) below or with
respect to matters that would not individually or in the aggregate have
a Material Adverse Effect, (i) the Company and its Subsidiaries have
made all filings, recordings and registrations with, and possess all
validations or exemptions, approvals, orders, authorizations, consents,
licenses, certificates and permits from, the FCC, applicable public
utilities and other federal, state and local regulatory or governmental
bodies and authorities or any subdivision thereof, including, without
limitation, cable television franchises, pole attachment agreements,
and cable antenna relay service, broadcast auxiliary, earth station,
business radio, microwave or special safety radio service licenses
issued by the FCC (collectively, the "Authorizations") necessary or
appropriate to own, operate and construct the cable communication
systems owned by them (the "Systems") or otherwise for the operation of
their businesses and are not in violation thereof; (ii) all such
Authorizations are in full force and effect, and no event has occurred
that permits, or after notice or lapse of time could permit, the
revocation, termination or modification of any Authorization which is
necessary or appropriate to own, operate and construct the Systems or
otherwise for the operation of any such business; (iii) none of the
Company or any of its Subsidiaries is in violation of any duty or
obligation required by the United States Communications Act of 1934, as
amended (the "Communications Act"), or any FCC rule or regulation
applicable to the operation of any portion of any of the Systems; (iv)
none of the Company or any of its Subsidiaries is in violation of any
duty or obligation required by state or local laws, or local rules or
regulations applicable to the operation of any portion of any of the
Systems; (v) there is not pending or, to the best knowledge of the
Company or any of its Subsidiaries, threatened, any action by the FCC
or state or local regulatory authority to modify, revoke, cancel,
suspend or refuse to renew any Authorization; (vi) other than as
described in the Offering Memorandum, there is not now issued or
outstanding or, to the best knowledge of the Company or any of its
Subsidiaries, threatened, any notice of any hearing, material violation
or material complaint against the Company or any of its Subsidiaries
with respect to the operation of any portion of the Systems and none of
the Company or its Subsidiaries has any knowledge that any person
intends to contest renewal of any material Authorization;
(v) (i) (A) The Company and its Subsidiaries have entered
into, or have rights under, all required programming agreements
(including, without limitation, all non-broadcast affiliation
agreements under which the Company and its Subsidiaries are accorded
retransmission rights relating to programming that the Systems provide
to their customers) that are material to the conduct of their business
as described in the Offering Memorandum; and (B) all such material
agreements are in full force and effect and none of the Company, any of
its Subsidiaries or any of its affiliates has received any written
notice of revocation or material modifications of such material
agreements; and (ii)(A) either the Company or its Subsidiaries has
entered into agreements with the television stations that have notified
the Company or its Subsidiaries that such station's respective consent
is required to carry such stations on the Systems or has ceased
carrying such stations; (B) all such agreements grant the Company or
one of its Subsidiaries retransmission consent in exchange for various
non-cash consideration; and (C) all such agreements are in full force
and effect and are not subject to revocation (except in the case of
material breach by the Company or its Subsidiaries) or material
modifications, and no event has occurred that permits, or after notice
or lapse of time could permit, the revocation, termination or material
modification of any such agreement, except where the failure of such
agreements to be in full force and effect or such revocation would not,
in either case, individually or in the aggregate have a Material
Adverse Effect;
(w) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, (i) all registration
statements and all other documents (including but not limited to annual
reports) required by the FCC in connection with the operation of the
Systems have been filed with the FCC; (ii) all frequencies within the
restricted aeronautical and navigational bands (i.e., 108-136 MHz and
225-400 MHz) which are currently being used in connection with the
operation of the Systems have been authorized for such use by the FCC;
(iii) each of the Systems subject to Equal Employment Opportunity
Commission ("EEO") compliance certification by the FCC has been
certified by the FCC for annual EEO compliance during the time such
Systems have been owned by the Company or its Subsidiaries; and (iv)
all towers associated with the Systems are in compliance with the rules
and regulations of the United States Federal Aviation Administration;
(x) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, none of the Company or any of
its Subsidiaries is in breach or violation of, or in default under, any
of the terms, conditions or provisions of the Communications Act or the
rules, regulations or policies of the FCC thereunder;
(y) (i) Except for matters that would not individually or in
the aggregate have a Material Adverse Effect, all statements of
accounts and any other filings that are required under Section 111 of
the United States Copyright Act of 1976, as amended, in connection with
the retransmission of any broadcast television and radio signals on the
Systems have been timely filed with the United States Copyright Office
and indicated royalty payments have been made for each System for each
accounting period during which such Systems have been owned by the
Company or its Subsidiaries; (ii) none of the Company, any of its
Subsidiaries or any System has received any inquiry or request from the
United States Copyright Office or from any other party challenging or
questioning any such statements of account or royalty payments; and
(iii) no claim of copyright infringement has been made or threatened in
writing against the Company, any of its Subsidiaries or any System;
(z) Neither the execution and delivery of this Agreement, the
Indenture or the Registration Rights Agreement, nor the consummation of
the transactions contemplated hereby and thereby or by the Offering
Memorandum under "Use of Proceeds," nor compliance with the terms,
conditions and provisions thereof by the Company, will conflict with
the Communications Act or the rules, regulations or policies of the FCC
thereunder, or will cause any suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any material license, permit,
franchise, certificate, consent, authorization, designation,
declaration, filing, registration or qualification;
(aa) Neither the execution and delivery of this Agreement, the
Indenture or the Registration Rights Agreement, nor the execution,
delivery, offer, issuance and sale of the Notes, nor compliance with
the terms, conditions and provisions thereof by the Company, requires
any license, permit, franchise, certificate, consent, authorization,
designation, declaration, filing, registration or qualification by or
with the FCC;
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or Offering
Memorandum, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to the Initial Purchaser furnished in writing to the
Company by or on behalf of the Initial Purchaser expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to the Preliminary Offering Memorandum shall not
inure to the benefit of the Initial Purchaser (or to the benefit of any person
controlling such Initial Purchaser) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Senior Notes by such Initial
Purchaser to any person if the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the Preliminary
Offering Memorandum was corrected in the Offering Memorandum and the Initial
Purchaser sold Senior Notes to that person without sending or giving at or prior
to the written confirmation of such sale, a copy of the Offering Memorandum (as
then amended or supplemented) if the Company has previously furnished sufficient
copies thereof to the Initial Purchaser on a timely basis to permit such sending
or giving. The foregoing indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against
the Initial Purchaser or any person controlling the Initial Purchaser in respect
of which indemnity may be sought against the Company, the Initial Purchaser or
such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Initial Purchaser or any
such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Initial
Purchaser or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the named parties
to any such action, suit or proceeding (including any impleaded parties) include
both the Initial Purchaser or such controlling person and the indemnifying
parties and the Initial Purchaser or such controlling person shall have been
advised in writing by its counsel that representation of such indemnified party
and any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party shall not have the
right to assume the defense of such action, suit or proceeding on behalf of the
Initial Purchaser or such controlling person). It is understood, however, that
the indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Initial Purchaser and controlling persons not having actual or potential
differing interests with the Initial Purchaser or among themselves, which firm
shall be designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and
expenses shall be reimbursed as they are incurred. The indemnifying parties
shall not be liable for any settlement of any such action, suit or proceeding
effected without their written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
suit or proceeding, the indemnifying parties agree to indemnify and hold
harmless the Initial Purchaser, to the extent provided in paragraph (a), and any
such controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) The Initial Purchaser agrees to indemnify and hold
harmless the Company and its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the indemnity from the Company to the Initial
Purchaser set forth in paragraph (a) hereof, but only with respect to Initial
Purchaser Information furnished in writing by or on behalf of the Initial
Purchaser expressly for use in the Preliminary Offering Memorandum or Offering
Memorandum. If any action, suit or proceeding shall be brought against the
Company, any of its directors or officers, or any such controlling person based
on the Preliminary Offering Memorandum or Offering Memorandum, and in respect of
which indemnity may be sought against the Initial Purchaser pursuant to this
paragraph (c), the Initial Purchaser shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof, the Initial Purchaser shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the Initial
Purchaser's expense), and the Company, its directors and officers, and any such
controlling person shall have the rights and duties given to the Initial
Purchaser by paragraph (b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Initial Purchaser may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable (except if inapplicable according to its terms) to an indemnified
party under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchaser on the other hand from the offering of the Senior
Notes, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Initial Purchaser on the other in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Initial
Purchaser on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Company bear to the total discounts and commissions received by the Initial
Purchaser. The relative fault of the Company on the one hand and the Initial
Purchaser on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Initial Purchaser on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and the Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price of the Senior Notes purchased by it and distributed to
the purchasers pursuant to Exempt Resales exceeds the amount of any damages
which the Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 6 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred but only
to the extent that such losses, claims, damages, liabilities or expenses are
required to be paid by an indemnified party. The indemnity and contribution
agreements contained in this Section 6 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Initial Purchaser or any person controlling the Initial Purchaser, the Company,
its directors or officers or any person controlling the Company, (ii) acceptance
of any Senior Notes and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to the Initial Purchaser or any person controlling
the Initial Purchaser, or to the Company, its directors or officers or any
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
6.
(g) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
7. Conditions of the Initial Purchaser's Obligation.
The obligation of the Initial Purchaser to purchase the Senior Notes hereunder
is subject to the following conditions:
(a) At the time of execution of this Agreement and on the
Closing Date, no order or decree preventing the use of the Offering Memorandum,
or any order asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Act shall have been issued and
no proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, be contemplated. No stop order suspending
the sale of the Senior Notes in any jurisdiction designated by the Initial
Purchaser shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, shall be
contemplated.
(b) Subsequent to the date as of which information is given in
the Offering Memorandum, except as otherwise stated in the Offering Memorandum,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or its
Subsidiaries not contemplated by the Offering Memorandum, which in the opinion
of the Initial Purchaser, would materially adversely affect the market for the
Senior Notes, or (ii) any event or development relating to or involving the
Company, any of its Subsidiaries or any officer or director of the Company or
any of its Subsidiaries which makes any statement made in the Offering
Memorandum untrue or which, in the opinion of the Company and its counsel or the
Initial Purchaser and its counsel, requires the making of any addition to or
change in the Offering Memorandum in order to state a material fact required by
any law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Offering Memorandum to
reflect such event or development would, in the opinion of the Initial
Purchaser, materially adversely affect the market for the Senior Notes.
(c) The Final Offering Memorandum shall have been printed and
copies thereof distributed to the Initial Purchaser in such quantities as shall
have been previously specified by the Initial Purchaser not later than 9:00
A.M., New York City time, on September 23, 1997, or at such later date and time
as the Initial Purchaser may approve in writing.
(d) The Initial Purchaser shall have received on the Closing
Date an opinion of Xxxxxxxx Ingersoll Professional Corporation, counsel for the
Company, dated the Closing Date and addressed to the Initial Purchaser, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the state of its formation with full corporate power and authority to
own its properties and conduct its business as described in the
Offering Memorandum;
(ii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iii) The Registration Rights Agreement has been
duly authorized, executed and delivered by the Company;
(iv) The Notes have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indenture and enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles and further except that (a) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy, and (b)
waivers as to usury, stay or extension laws may be unenforceable; and
the Notes and the Indenture conform in all material respects to the
descriptions thereof in the Offering Memorandum;
(v) The Indenture has been duly authorized, executed
and delivered by the Company and will constitute a valid and legally
binding instrument, enforceable in accordance with its terms against
the Company, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and further except that (a) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy, and (b)
waivers as to usury, stay or extension laws may be unenforceable;
(vi) The Registration Rights Agreement has been duly
authorized by the Company and, when executed and delivered by the
parties thereto, will constitute a valid and legally binding
instrument, enforceable in accordance with its terms against the
Company, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights, to general equity
principles and further except that (a) rights to contribution or
indemnification may be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy and (b)
waivers as to usury, stay or extension laws may be unenforceable; and
the Registration Rights Agreement will conform in all material respects
to the description thereof in the Offering Memorandum;
(vii) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the Notes, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will
not contravene the provisions of the certificate of incorporation and
bylaws of the Company, or to the best of our knowledge, any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company;
(viii) The statements set forth in the Offering
Memorandum under the caption "Description of the Notes," insofar as
they purport to constitute a summary of the terms of the Notes and the
statements set forth in the Offering Memorandum under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources--Financing
Activities," insofar as they purport to describe the debt instruments
referred to therein are, when taken together with the other information
included in the Offering Memorandum, accurate in all material respects;
(ix) No registration of the Senior Notes under the
Act, and no qualification of an indenture under the 1939 Act with
respect thereto, is required for the offer, sale and initial resale of
the Senior Notes by the Initial Purchaser in the manner contemplated by
this Agreement; and
(x) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Initial Purchaser at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum,
and has not made any independent check or verification thereof, on the basis of
the foregoing (relying as to materiality to the extent such counsel deemed
appropriate upon facts provided by officers and other representatives of the
Company), no facts have come to the attention of such counsel that lead such
counsel to believe that the Offering Memorandum, as of its date or as of the
Closing Date, contained or contains any untrue statement of material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and other financial and
statistical data included
therein).
The opinion of such counsel may be limited to the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
federal laws of the United States.
(e) The Initial Purchaser shall have received on the Closing
Date an opinion of Xxxxxxx X. Xxxxxx, Esq., General Counsel of the Company,
dated the Closing Date and addressed to the Initial Purchaser to the effect
that:
(i) Except as set forth in the Offering Memorandum,
each of the Company and its Subsidiaries has all of the licenses,
permits, franchises and authorizations, if any, required by the
relevant governmental authorities of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut and/or its political subdivisions for the
provision of cable television service (as such counsel understands
service to be provided which may be based on a certificate of an
officer of the Company, provided that such counsel shall state that
they believe that both the Initial Purchaser and he are justified in
relying on such certificate), where the failure to obtain or hold such
license, permit, franchise or authorization would have a Material
Adverse Effect;
(ii) To the best of such counsel's knowledge after
due inquiry, each of the Company and its Subsidiaries has made all
filings, reports, applications and submissions required by the laws and
ordinances relating to cable services of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, and the ordinances of the state's political
subdivisions relating thereto, and the rules and regulations
promulgated therewith;
(iii) Each of the Company and its Subsidiaries has
the consents, approvals, authorizations, licenses, certificates,
permits, or orders of any governmental authorities of the each of New
York, Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New
Hampshire, Vermont, Michigan and Connecticut, and its political
subdivisions, if any, required for the consummations of the
transactions contemplated in the Purchase Agreement where the failure
to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would have a Material Adverse Effect;
(iv) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge, threatened by or
before any court or governmental body each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, against or affecting any of the Company or
its Subsidiaries, or the business of the Company and its Subsidiaries;
(v) The statements in the Offering Memorandum under
the headings "Risk Factors Regulation in the Telecommunications
Industry" and "Risk Factors - Competition," insofar as they relate to
the Company and its Subsidiaries operations each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, and purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair
in all material respects; and
(vi) Neither the execution and delivery of the
Purchase Agreement nor the offering of the Senior Notes contemplated
thereby will conflict with or result in a violation of any order or
regulation of each of New York, Virginia, Pennsylvania, Ohio, New
Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, or its political subdivisions applicable to the Company
and its Subsidiaries, the conflict with or the violation of which would
have a material adverse effect on the Company and its Subsidiaries.
(f) The Initial Purchaser shall have received on the Closing
Date an opinion of Xxxxx X. Xxxxxx, Deputy General Counsel to the Company, dated
the Closing Date and addressed to the Initial Purchaser, to the effect that:
(i) None of the Company or its Subsidiaries is in
violation of its certificate of incorporation, by-laws, certificate of
limited partnership or partnership agreement, as applicable, or in
default in the performance or observance of any material obligation,
covenant or condition contained in any partnership agreement,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(ii) Each of the Company and its Subsidiaries has
been duly qualified as a foreign corporation or partnership, as the
case may be, for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction,
except where the failure to so qualify would not have a Material
Adverse Effect (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that he believes that both the Initial
Purchaser and he are justified in relying upon such opinions and
certificates);
(iii) Each subsidiary of the Company is owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (other than liens to secure
indebtedness under credit facilities disclosed in the Offering
Memorandum) (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
Subsidiaries, provided that such counsel shall state that he believes
that both the Initial Purchaser and he are justified in relying upon
such opinions and certificates);
(iv) To the best of such counsel's knowledge and
other than as set forth in the Offering Memorandum, there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any
of its Subsidiaries is the subject which, if determined adversely to
the Company or any of its Subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholder's equity, partners'
equity, or results of operations of the Company and its Subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(v) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the Notes, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will
not, to the best of my knowledge after due inquiry, conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under any material indenture, mortgage, deed of
trust, sale/leaseback transaction, loan agreement or other similar
financing agreement, or instrument or other agreement or instrument
(including, without limitation, any license or franchise granted to the
Company or a Subsidiary by a local franchising governmental body) to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the certificate of incorporation, by-laws, the
certificate of limited partnership or the partnership agreements of the
Company and its Subsidiaries, as appropriate, or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any
of their properties; and
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Senior Notes
or the consummation by the Company of the transactions contemplated by
this Agreement, the Indenture or the Registration Rights Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and resale of the Senior Notes by
the Initial Purchaser.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Initial Purchaser at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum,
and has not made any independent check or verification thereof, on the basis of
the foregoing (relying as to materiality to the extent such counsel deemed
appropriate upon facts provided by officers and other representatives of the
Company), no facts have come to the attention of such counsel that lead such
counsel to believe that the Offering Memorandum, as of its date or as of the
Closing Date, contained or contains any untrue statement of material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and other financial and
statistical data included therein).
(g) The Initial Purchaser shall have received on the Closing
Date an opinion of Xxxxxxxxxx & Xxxxx, P.C., special regulatory counsel for the
Company and its Subsidiaries, dated the Closing Date, and addressed to the
Initial Purchaser to the effect that:
(i) The communities listed in Section A of Attachment
1 to the opinion have been registered with the FCC in connection with
the operation of the Systems. The filing of a registration statement
constitutes initial FCC authorization for the commencement of cable
television operations in the community registered.
(ii) The Subsidiaries hold certain FCC licenses, as
that term is defined below ("FCC Licenses"). All FCC Licenses and
receive-only earth station registrations held by the Subsidiaries in
connection with the operation of the Cable Systems are listed on
Attachment 1 to the Opinion. To the best of our knowledge, all such FCC
Licenses have been validly issued or assigned to the present licensee
and are currently in full force and effect. We have no knowledge of any
event which would allow, or after notice or lapse of time which would
allow, revocation or termination of any FCC License held by the
Subsidiaries or would result in any other material impairment of the
rights of the holder of such license. To the best of our knowledge, no
other FCC Licenses are required in connection with the operation of the
Cable Systems by the Subsidiaries in the manner we have advised they
are presently being operated. For the purposes of this opinion, an FCC
License is defined as an authorization, or renewal thereof, issued by
the FCC authorizing the transmission of radio energy through the
airways.
(iii) Other than proceedings affecting the cable
television industry generally, there is no action, suit or proceeding
pending before or, to the best of our knowledge, threatened by the FCC
which is reasonably likely to have a materially adverse impact upon the
cable television operations of the Company and its Subsidiaries taken
as a whole.
(iv) To the best of our knowledge after due inquiry,
the Company and the Subsidiaries have filed all current and routine
filings, reports, applications and submissions required under the
Communications Act, as amended, and under the rules and regulations of
the FCC.
(v) The Subsidiaries hold all authorizations and/or
have filed all notifications required by the FCC in connection with
their operation on all frequencies in the 108-137 MHz and 225-400 MHz
bands which we have been advised are currently being utilized on the
Cable Systems. The geographic and technical parameters with respect to
the authorized use of these frequencies are listed on Attachment 1
hereto.
(vi) The employment units covered by the Cable
Systems and operated by the Subsidiaries have been certified, where
required, by the FCC for compliance with equal employment opportunity
("EEO") requirements in each of calendar years 1992 through 1996 in
which such Cable Systems have been owned and operated by the Company or
the Subsidiaries. Employment certification records for the years prior
to 1992 have been purged from the FCC's database and are therefore
outside the scope of this opinion.
(vii) Statements of Account required by Section 111
of the Copyright Act of 1976, as amended have been filed, together with
royalty payments accompanying said Statements of Account, with the U.S.
Copyright Office for the Cable Systems covering each of the accounting
periods beginning with January 1 through June 30, 1994 accounting
period and ending with the July 1 through December 31, 1996 accounting
period during which such Cable Systems have been operated by the
Subsidiaries. We have not received the information or calculations
contained in these Statements, and express no opinion with respect to
the accuracy thereof. To the best of our knowledge, there are no
currently outstanding inquiries received from the U.S. Copyright Office
or any other party which question the copyright filings or payments
made by the Company or the Subsidiaries with respect to the Cable
Systems. It is possible that there may be matters pending before the
U.S. Copyright Office relating to the Cable Systems, the Company or the
Subsidiaries of which we do not have knowledge because such matters
have not yet been incorporated into the available public files of the
U.S. Copyright Office. However, we are not aware of the pending or
threatened claim, action or demand for copyright infringement or for
non-payment of royalties with respect to the Statements of Account or
related royalty payments filed by the Company and the Subsidiaries for
the Cable Systems.
(viii) The Company has obtained all consents,
approvals and authorizations of the FCC, if any, required for the
consummation of the transactions of the transactions contemplated in
the Purchase Agreement where the failure to obtain the consents,
approval, authorizations, licenses, certificates, permits or orders
would reasonably be expected to have a materially adverse impact on the
Company or the Subsidiaries.
(ix) Neither the execution and delivery of the
Purchase Agreement nor the offering of the Senior Notes contemplated
thereby will conflict with or result in a violation of any order or
regulation of the FCC applicable to the Company and the Subsidiaries,
the conflict with or the violation of which would reasonably be
expected to have a materially adverse impact on the Company or the
Subsidiaries. However, we call your attention to the following.
(x) Under the Act as now in effect, the sale or other
disposition of certain pledged collateral and the exercise of certain
other rights and remedies conferred upon you by any agreement or by
applicable law might constitute an assignment of an FCC licensee, or
transfer of control of an FCC license, requiring for its consummation
the prior consent of the FCC granted upon an appropriate application
thereof.
(xi) Under the Act as now in effect, and as now
interpreted by the FCC, no valid security interest may be granted in an
FCC license. To the extent that the Purchase Agreement and/or related
financing documents purport to grant to you a security interest in any
FCC licenses, such security interest may not be legally enforceable.
(xii) In the course of our representation of the
Company and its Subsidiaries, no matters have come to our attention,
other than matters affecting the cable television industry generally,
which would reasonable be expected to have a materially adverse impact
upon the cable television operations of the Company and the
Subsidiaries taken as a whole.
(xiii) In our opinion, the Statements in the Offering
Memorandum under the headings "Risk Factors - Regulation in the
Telecommunications Industry" and "Risk Factors - Competition," insofar
as the purport to describe the provisions of the law referred to
therein, are accurate, complete and fair in all material respects.
(h) The Initial Purchaser shall have received on the Closing
date an opinion, of Xxxxxx & Xxxxxxx, counsel for the Initial Purchaser, dated
the Closing Date, and addressed to the Initial Purchaser, with respect to such
matters as the Initial Purchaser may reasonably request, and such counsel shall
have received such certificates, documents and information as they may
reasonably request to enable them to pass upon such matters.
(i) The Initial Purchaser shall have received letters
addressed to the Initial Purchaser, and dated the date hereof and the Closing
Date from Deloitte & Touche LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Initial Purchaser and its
counsel.
(j)(i) There shall not have been any decrease in stockholders'
equity of the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business) from that
set forth or specifically contemplated in the Offering Memorandum; (ii) the
Company and its Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and it subsidiaries, taken as a whole, other than
those reflected in the Offering Memorandum; and (iii) all the representations
and warranties of the Company contained in this Agreement shall be true and
correct in all material respects on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date, and the Initial
Purchaser shall have received a certificate, dated the Closing Date and signed
by the Chief Executive Officer and the Chief Financial Officer of the Company
(or such other officers as are acceptable to the Initial Purchaser), to the
effect set forth in this Section 7(j) and in Section 7(k) hereof.
(k) The Company shall not have failed at or prior to the
Closing Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied with by
it hereunder at or prior to the Closing Date.
(l) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g) under the Act, that (i) it is downgrading its rating assigned to
any class of securities of the Company or any of its Subsidiaries, or (ii) it is
reviewing its ratings assigned to any class of securities of the Company or any
of its Subsidiaries with a view to possible downgrading, or with negative
implications, or direction not determined.
(m) The Senior Notes shall have been approved for trading
in the PORTAL Market.
(n) The Company shall have obtained, in writing, all consents
and waivers required under the terms of any of its material agreements necessary
to ensure that the transactions contemplated by this Agreement and the other
Operative Documents will not conflict with or constitute a breach of, or a
default under any of such agreements. The Company shall have furnished
photocopies of such waivers and consents, if any, to the Initial Purchaser.
(o) The Company shall have furnished or caused to be furnished
to the Initial Purchaser such further certificates and documents as the Initial
Purchaser or its counsel shall have requested.
All such opinions, certificates, letters, consents, waivers
amendments and other documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and substance to the Initial
Purchaser and counsel for the Initial Purchaser. Any certificate or document
signed by any officer of the Company and delivered to the Initial Purchaser, or
to counsel for the Initial Purchaser, shall be deemed a representation and
warranty by the Company to the Initial Purchaser as to the statements made
therein.
8. Expenses. The Company agrees to pay the following costs,
expenses and fees and all other costs and expenses incident to the performance
by it of any of its obligations hereunder: (i) the preparation and reproduction
of the Preliminary Offering Memorandum and the Final Offering Memorandum
(including, without limitation, financial statements thereto), and each
amendment or supplement to any of them, this Agreement and the Indenture; (ii)
the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the Final
Offering Memorandum, the Preliminary Offering Memorandum, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Senior Notes; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Notes, including
any stamp taxes in connection with the original issuance and sale of the Notes;
(iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Senior Notes; (v) the application for quotation of the Notes on the
PORTAL Market; (vi) the qualification of the Senior Notes for offer and sale
under the securities or Blue Sky laws of the several states as provided in
Section 4(e) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchaser relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (vii) the performance by the Company of its
obligations under the Registration Rights Agreement; (viii) fees and expenses of
the Trustee and its counsel; (ix) the transportation and other expenses, if any,
incurred by or on behalf of the Company representatives in connection with
presentations to prospective purchasers of the Senior Notes; and (x) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel, if any) for the Company. The Company
hereby agrees that they will pay in full on the Closing Date the fees and
expenses referred to in clause (vi) of this Section 8 by delivering to counsel
for the Initial Purchaser on such date a check payable to such counsel in the
requisite amount.
9. Effective Date of Agreement. This Agreement shall
become effective upon the execution and delivery hereof by all the parties
hereto.
10. Termination of Agreement. This Agreement shall be subject
to termination in the absolute discretion of the Initial Purchaser, without
liability on the part of the Initial Purchaser to the Company, by notice to the
Company, if prior to the Closing Date, (i) trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been
declared, or (iii) there shall have occurred any outbreak or escalation of
hostilities involving the United States or other domestic, foreign or
international calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to commence or continue the offering of the Senior Notes on the
terms set forth on the cover page of the Offering Memorandum or to enforce
contracts for the resale of the Senior Notes by the Initial Purchaser. Notice of
such termination may be given to the Company by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
11. Information Furnished by the Initial Purchaser. The
statements set forth in the last paragraph of the cover page of the Preliminary
Offering Memorandum and the Offering Memorandum and the second to last paragraph
on the inside cover page of the Preliminary Offering Memorandum and the Offering
Memorandum, constitute the only Initial Purchaser Information furnished by or on
behalf of the Initial Purchaser as such information is referred to in Sections
5(a) and 6 hereof.
12. Miscellaneous. Except as otherwise provided in Sections 4,
9 and 10 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at Main at Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, Attention: Chief
Financial Officer with a copy to Xxxxxxxx Ingersoll Professional Corporation, 1
Oxford Center, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, XX 00000, Attention:
Xxxx X. Xxxxxxxxxxxx, Xx., or (ii) if to the Initial Purchaser, addressed to
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Manager,
Investment Banking Division, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxx X. Xxxxxxx.
This Agreement has been and is made solely for the benefit of
the Initial Purchaser, the Company and their respective directors, officers and
the controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Initial Purchaser of any of the Senior Notes
in his status as such purchaser.
13. Applicable Law; Counterparts This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York
and without regard to the conflicts of law principles thereof.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[signature page follows]
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchaser.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: Xxxxx Xxxxx
-----------------
Name:Xxxxx Xxxxx
Title: Vice President
Confirmed as of the date first above mentioned.
XXXXX XXXXXX INC.
By: Xxxxxxx X Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
