Exhibit 1.1
EXECUTION COPY
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@ENTERTAINMENT, INC.
(a Delaware corporation)
252,000 Units Consisting of
14 1/2% Senior Discount Notes due 2008 and
1,008,000 Warrants to Purchase an Aggregate of
1,824,514 Shares of Common Stock
PURCHASE AGREEMENT
Dated: July 8, 1998
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Table of Contents
PURCHASE AGREEMENT......................................................................................1
SECTION 1. Representations and Warranties.............................................................3
(a) Representations and Warranties by the Company....................................................3
(i) Similar Offerings......................................................................3
(ii) Offering Memorandum....................................................................3
(iii) Independent Accountants................................................................3
(iv) Financial Statements...................................................................3
(v) No Material Adverse Change in Business.................................................4
(vi) Good Standing of the Company...........................................................4
(vii) Corporate Standing of Designated Subsidiaries..........................................4
(viii) Restrictions on Payments of Dividends..................................................5
(ix) Capitalization.........................................................................5
(x) Authorization of Agreement.............................................................6
(xi) Authorization of the Registration Rights Agreement.....................................6
(xii) Authorization of the Indenture.........................................................6
(xiii) Authorization of the Notes.............................................................6
(xiv) Authorization of the Warrant Agreement.................................................6
(xv) Authorization of the Warrants..........................................................7
(xvi) Authorization of the Warrant Shares....................................................7
(xvii) Authorization of the Warrant Registration Rights
Agreement..............................................................................7
(xviii) Description of the Registration Rights Agreement,
Warrant Registration Rights Agreement, the Units,
the Notes, the Warrants, the Common Stock, the
Warrant Agreement and the Indenture....................................................8
(xix) Absence of Defaults and Conflicts......................................................8
(xx) Absence of Labor Dispute...............................................................9
(xxi) Absence of Proceedings.................................................................9
(xxii) Possession of Intellectual Property....................................................9
(xxiii) Absence of Further Requirements.......................................................10
(xxiv) Possession of Licenses and Permits....................................................10
(xxv) No Additional Documents...............................................................11
(xxvi) Management Agreements.................................................................11
(xxvii) Title to Property.....................................................................11
(xxviii) Tax Returns...........................................................................11
(xxix) Environmental Laws....................................................................12
(xxx) Investment Company Act................................................................12
(xxxi) Internal Controls.....................................................................12
(xxxii) Taxes on Subsidiary Indebtedness......................................................13
(xxxiii) Insurance.............................................................................13
(xxxiv) Rule 144A Eligibility.................................................................13
(xxxv) No General Solicitation...............................................................13
(xxxvi) No Registration Required..............................................................13
(xxxvii) Reporting Company.....................................................................14
(b) Officers' Certificates..........................................................................14
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.........................................14
(a) Securities......................................................................................14
(b) Payment.........................................................................................14
(c) Qualified Institutional Buyer...................................................................15
(d) Denominations; Registration.....................................................................15
SECTION 3. Covenants of the Company.................................................................15
(a) Offering Memorandum.............................................................................15
(b) Notice and Effect of Material Events............................................................15
(c) Amendment to Offering Memorandum and Supplements................................................16
(d) Qualification of Securities for Offer and Sale..................................................16
(e) Rating of Securities............................................................................16
(f) DTC and PORTAL..................................................................................16
(g) Use of Proceeds.................................................................................16
(h) Restriction on Sale of Securities...............................................................16
SECTION 4. Payment of Expenses......................................................................17
(a) Expenses........................................................................................17
(b) Termination of Agreement........................................................................17
SECTION 5. Conditions of Initial Purchasers' Obligations............................................17
(a) Opinions of Counsel for Company.................................................................17
(b) Opinion of United States Counsel for Initial Purchasers.........................................18
(c) Opinion of Polish Counsel for Initial Purchasers................................................18
(d) Officers' Certificate...........................................................................18
(e) Accountants' Comfort Letter.....................................................................18
(f) Bring-down Comfort Letter.......................................................................19
(g) Maintenance of Rating...........................................................................19
(h) PORTAL..........................................................................................19
(i) Additional Documents............................................................................19
(j) Execution of Agreements.........................................................................19
(k) Termination of Agreement........................................................................19
SECTION 6. Subsequent Offers and Resales of the Securities..........................................20
(a) Offer and Sale Procedures.......................................................................20
(i) Offers and Sales only to Qualified Institutional Buyers...............................20
(ii) No General Solicitation...............................................................20
ii
(iii) Purchases by Non-Bank Fiduciaries.....................................................20
(iv) Subsequent Purchaser Notification.....................................................20
(v) Restrictions on Transfer..............................................................21
(b) Covenants of the Company........................................................................21
(i) Due Diligence.........................................................................21
(ii) Integration...........................................................................21
(iii) Rule 144A Information.................................................................21
(iv) Restriction on Repurchases............................................................22
(c) Resale Pursuant to Rule 144A....................................................................22
(d) Offers and Sales in Poland and The Netherlands..................................................22
(e) Offers and Sales in the United Kingdom..........................................................23
(f) Representation and Warranty of Initial Purchasers...............................................23
SECTION 7. Indemnification..........................................................................23
(a) Indemnification of Initial Purchasers...........................................................23
(b) Indemnification of Company, Directors and Officers..............................................24
(c) Actions Against Parties; Notification...........................................................24
(d) Settlement Without Consent if Failure to Reimburse..............................................25
SECTION 8. Contribution.............................................................................25
SECTION 9. Representations, Warranties and Agreements to Survive Delivery...........................27
SECTION 10. Termination of Agreement.................................................................27
(a) Termination; General............................................................................27
(b) Liabilities.....................................................................................27
SECTION 11. Default by One or More of the Initial Purchasers.........................................27
SECTION 12. Notices..................................................................................28
SECTION 13. Parties..................................................................................28
SECTION 14. GOVERNING LAW AND TIME...................................................................28
SECTION 15. Effect of Headings.......................................................................28
SECTION 16. Counterparts.............................................................................29
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EXHIBITS
Exhibit A - Form of Registration Rights Agreement....................................................A-1
Exhibit B - Form of Warrant Agreement................................................................B-1
Exhibit C - Form of Warrant Registration Rights Agreement............................................C-1
Exhibit D - Form of United States Law Opinion of Company's Counsel...................................D-1
Exhibit E - Form of Polish Law Opinion of Company's Counsel..........................................E-1
Exhibit F - Form of Dutch Law Opinion of Company's Counsel...........................................F-1
Exhibit G - Form of English Law Opinion of Company's Counsel.........................................G-1
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@ENTERTAINMENT, INC.
(a Delaware corporation)
252,000 Units Consisting of
14 1/2% Senior Discount Notes due 2008 and
1,008,000 Warrants to Purchase an Aggregate of
1,824,514 Shares of Common Stock
PURCHASE AGREEMENT
July 8, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. Xxxxxx Securities Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
@Entertainment, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and X.X. Xxxxxx Securities Inc. (collectively,
the "Initial Purchasers", which term shall also include any initial purchaser
substituted as hereinafter provided in Section 11 hereof), with respect to the
issue and sale by the Company and the purchase by the Initial Purchasers, acting
severally and not jointly, of 252,000 of the Company's units (the "Units"), each
Unit consisting of $1,000 aggregate principal amount at maturity of the
Company's 14 1/2% Senior Discount Notes due 2008 (the "Notes") and four warrants
(each a "Warrant" and collectively, the "Warrants" and, together with the Units
and the Notes, the "Securities"), each Warrant entitling the holder thereof to
purchase 1.81 shares of common stock, par value $0.01 per share (the "Common
Stock"), of the Company. The Units, Notes and Warrants are more fully described
in Schedule C hereto. The Notes are to be issued pursuant to an indenture dated
as of July 14, 1998 (the "Indenture") between the Company and Bankers Trust
Company, as trustee (the "Trustee") and the Warrants are to be issued pursuant
to a warrant agreement dated as of July 14, 1998 (the "Warrant Agreement"),
between the
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Company and Bankers Trust Company, as warrant agent (the "Warrant Agent") in
substantially the form attached hereto as Exhibit B. Securities issued in
book-entry form will be issued to Cede & Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing
Time (as defined in Section 2(b)) (the "DTC Agreement"), among the Company, the
Trustee and DTC.
The holders of Securities will be entitled to the benefits of a Registration
Rights Agreement, in substantially the form attached hereto as Exhibit A with
such changes as shall be agreed to by the parties hereto (the "Registration
Rights Agreement"), pursuant to which the Company will file a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Securities or the Exchange Notes
referred to in the Registration Rights Agreement under the Securities Act of
1933, as amended (the "1933 Act").
The holders of Warrants will be entitled to the benefits of a Warrant
Registration Rights Agreement in substantially the form attached hereto as
Exhibit C, with such changes as shall be agreed to by the parties hereto (the
"Warrant Registration Rights Agreement") which provides for the registration of
the Warrants under the 1933 Act under certain circumstances set forth therein.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are to
be offered and sold through the Initial Purchasers without being registered
under the 1933 Act, in reliance upon exemptions therefrom. Pursuant to the terms
of the Securities and the Indenture, investors that acquire Securities may only
resell or otherwise transfer such Securities if such Securities are hereafter
registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemption afforded by
Rule 144A ("Rule 144A") of the rules and regulations promulgated under the 1933
Act by the Commission).
The Company has prepared and delivered to each Initial Purchaser copies of a
preliminary offering memorandum dated June 12, 1998 (the "Preliminary Offering
Memorandum") and has prepared and will deliver to each Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated July 8, 1998 (the "Final Offering Memorandum"), each for use by such
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities. "Offering Memorandum" means, with respect to any
date or time referred to in this Agreement, the most recent offering memorandum
(whether the Preliminary Offering Memorandum or the Final Offering Memorandum
and including any amendment or supplement to either such document), including
exhibits thereto and any documents incorporated therein by reference, which has
been prepared and delivered by the Company to the Initial Purchasers in
connection with their solicitation of purchases of, or offering of, the
Securities.
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All references in this Agreement to financial statements and schedules and
other information which are "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information, if
any, which are incorporated by reference in the Offering Memorandum.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Initial Purchasers as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with the Initial
Purchasers as follows:
(i) Similar Offerings. The Company and its Affiliates (as defined in
Section 1(a)(xxxv)) have not, directly or indirectly, solicited any offer to
buy or offered to sell, and will not, directly or indirectly, solicit any
offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the
sale of the Securities in a manner that would require the Securities to be
registered under the 1933 Act.
(ii) Offering Memorandum. As of their respective dates, neither the
Preliminary Offering Memorandum nor the Final Offering Memorandum, including
any amendment or supplement thereto, nor as of the Closing Time, the Final
Offering Memorandum including any amendment or supplement thereto included
or will include an untrue statement of a material fact or omitted or will
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 to the Company by the Initial Purchasers
through Xxxxxxx Xxxxx expressly for use in the Preliminary Offering
Memorandum or the Final Offering Memorandum, including any amendment or
supplement thereto.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of Regulation S-X under the
1933 Act.
(iv) Financial Statements. The financial statements, together with the
related schedules and notes, of the Company included in the Offering
Memorandum present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with United States generally
3
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, included
in the Offering Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Offering Memorandum
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Offering Memorandum.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Offering Memorandum, except as
otherwise stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise (a "Material Adverse Effect"), whether or not arising in the
ordinary course of business, (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than transactions
entered into in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise,
and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under this
Agreement, the Warrant Agreement, the Registration Rights Agreement, the
Warrant Registration Rights Agreement, the Indenture and the Securities; and
the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(vii) Corporate Standing of Designated Subsidiaries. Each subsidiary of
the Company that (i) is a "significant subsidiary" (as that term is defined
in Regulation S-X under the 1933 Act) or (ii) that holds any valid permits
or licenses to operate the cable television business in Poland or a digital
direct-to-home business uplinking from the United Kingdom is listed on
Schedule C hereto (each subsidiary listed on Schedule C hereto is
hereinafter referred to as a "Designated Subsidiary" and, collectively, the
"Designated Subsidiaries"), and has been duly organized and is validly
existing as a corporation under the laws of the jurisdiction of its
incorporation, has corporate power and corporate authority to own, lease and
operate its properties and to conduct its business as described in the
Offering Memorandum and is not required to be qualified as a foreign
corporation to transact business or to own or lease property in any
4
jurisdiction where it owns or leases property or transacts business; except
as otherwise disclosed in the Offering Memorandum or in Schedule C, all of
the issued and outstanding capital stock of each Designated Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity, except for (i) in the case of any Polish limited liability
company, any statutory liability for taxes, (ii) the pledge of 3,583,457
shares of Polska Telewizja Kablowa Warszawa S.A. and of 2,514,291 shares of
Polska Telewizja Kablowa Krakow S.A. held by Poland Cablevision
(Netherlands) B.V. ("PCBV") and 2,400 shares of Polska Telewizja Kablowa
Lublin S.A. held by Poltelkab Sp. z o.o. as security for the loan of $6.5
million granted on August 28, 1996 by the American Bank in Poland to Poland
Communications, Inc. ("PCI"), and (iii) the pledge of 2,313 shares of
Szczecinska Telewizja Kablowa Sp. z o.o. ("SzTK") for the security of
certain obligations undertaken by PTK Szczecin Sp. z o.o. ("PTK Szczecin")
with respect to the sellers of those shares (collectively, the "Share
Pledges"); none of the outstanding shares of capital stock of the Designated
Subsidiaries was issued in violation of any preemptive or similar rights
arising by operation of law, or under the statute or by-laws (or other
similar organizational documents) of any Designated Subsidiary or under any
agreement to which the Company or any Designated Subsidiary is a party. The
subsidiaries of the Company other than the Designated Subsidiaries,
considered in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Restrictions on Payments of Dividends. There are no restrictions
(legal, contractual or otherwise) on the ability of the Designated
Subsidiaries to declare and pay dividends or make any payment or transfer of
property or assets to their shareholders other than those referred to in the
Offering Memorandum and except for (i) restrictions relating to the Share
Pledges, (ii) encumbrances on certain assets of Telewizja Kablowa GOSAT Sp.
z o.o. ("GOSAT") consisting of the transfer of title to such assets as
security for the loan of $1.2 million granted on May 18, 1993 by Polski Bank
Rozwoju to GOSAT, and (iii) the restrictions discussed in Schedule D to the
Indenture (collectively, the "Asset Encumbrances").
(ix) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption "Description of
Capital Stock" (except for subsequent issuances, if any, pursuant to the
exercise of convertible securities or options referred to in the Offering
Memorandum) in the Offering Memorandum and, as of the date hereof, there has
been no material change in the authorized, issued and outstanding capital
stock since the date of the Offering Memorandum other than issuances of
shares of Common Stock upon the exercise of options disclosed to be
outstanding in the Offering Memorandum. The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company was
5
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization of the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company, and,
at the Closing Time, will have been duly executed and delivered by the
Company and will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as (x)
the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, (y) the enforceability thereof
may be limited by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and (z) any
rights to indemnity and contribution may be limited by federal and state
securities laws and public policy considerations.
(xii) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and the
waiver contained in Section 514 thereof may be unenforceable due to
interests of public policy.
(xiii) Authorization of the Notes. The Notes have been duly authorized
and, at the Closing Time, will have been duly executed by the Company and,
when authenticated in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits of, the Indenture
and the Registration Rights Agreement.
(xiv) Authorization of the Warrant Agreement. The Warrant Agreement has
been duly authorized by the Company and, at the Closing Time, will have been
duly
6
executed and delivered by the Company and, when duly executed and delivered
by the Warrant Agent, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xv) Authorization of the Warrants. The Warrants have been duly
authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, when executed and issued in the manner provided
for in the Warrant Agreement and delivered against payment of the purchase
price therefor as provided in this Agreement, (A) will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and (B) will be in the form contemplated by, and entitled to the benefits
of, the Warrant Agreement and the Warrant Registration Rights Agreement.
(xvi) Authorization of the Warrant Shares. The shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares") have been duly
authorized and reserved by the Company and, when executed by the Company and
countersigned by the Warrant Agent and issued and delivered upon exercise of
the Warrants in accordance with the terms of the Warrants and the Warrant
Agreement, will be validly issued, fully paid and non-assessable and will
not be subject to any preemptive or similar rights.
(xvii) Authorization of the Warrant Registration Rights Agreement. The
Warrant Registration Rights Agreement has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and delivered
by the Company and, when executed by the Initial Purchasers, will constitute
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditor's rights generally, (y) the enforceability thereof may be limited
by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and (z) any rights to
indemnity and contribution may be limited by federal and state securities
laws and public policy considerations.
(xviii) Description of the Registration Rights Agreement, Warrant
Registration Rights Agreement, the Units, the Notes, the Warrants, the
Common Stock, the Warrant
7
Agreement and the Indenture. The Registration Rights Agreement, Warrant
Registration Rights Agreement, the Units, the Notes, the Warrants, the
Common Stock, the Warrant Agreement and the Indenture will conform in all
material respects to the respective statements relating thereto contained in
the Offering Memorandum and will be in substantially the respective forms
previously delivered to the Initial Purchasers.
(xix) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is (1) in violation of its charter or statute, as
applicable, or by-laws (or other similar organizational documents), (2) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments"), except as described in the Offering
Memorandum and except for such defaults that would not result in a Material
Adverse Effect or (3) in violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets or properties,
except as described in the Offering Memorandum; and the execution, delivery
and performance of this Agreement, the Warrant Agreement, the Registration
Rights Agreement, the Warrant Registration Rights Agreement, the Indenture
and the Securities and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company or any Designated
Subsidiary in connection with the transactions contemplated hereby or
thereby or in the Offering Memorandum and the consummation of the
transactions contemplated herein and in the Offering Memorandum (including
the issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Offering Memorandum under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, the
Agreements and Instruments except for such conflicts, breaches, Repayment
Events or defaults or liens, charges or encumbrances that, singly or in the
aggregate, would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the charter or statute,
as applicable, or by-laws (or other similar organizational documents) of the
Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets or properties,
assuming that the Initial Purchasers comply with all of their obligations
8
under Section 6 hereof. As used herein, a "Repayment Event" means any event
or condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(xx) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect.
(xxi) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary thereof, which would be required to
be disclosed in the Offering Memorandum (other than as disclosed therein) if
it were a prospectus filed as part of a registration statement on Form S-1
under the 1933 Act, or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to adversely
affect the properties or assets of the Company or any of its subsidiaries in
a manner that is material and adverse to the Company and its subsidiaries
considered as one enterprise or the consummation of the transactions
contemplated by this Agreement, the Warrant Agreement, the Registration
Rights Agreement, the Warrant Registration Rights Agreement, the Indenture
or the Securities, or the performance by the Company of its obligations
hereunder or thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary thereof is a party or of
which any of their respective property or assets is the subject which are
not described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xxii) Possession of Intellectual Property. Except as disclosed in the
Offering Memorandum, the Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them. Except as disclosed in the
Offering Memorandum, neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or
of any
9
facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xxiii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
(other than (A) under the 1933 Act and the rules and regulations thereunder
with respect to the Registration Rights Agreement, the Warrant Registration
Rights Agreement and the transactions contemplated thereunder, (B) under the
securities or "blue sky" laws of the various states and (C) the Polish
Anti-Monopoly Act) is necessary or required (x) for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, the Warrant Agreement, the
Registration Rights Agreement, the Warrant Registration Rights Agreement or
the Offering Memorandum or (y) to permit the Company to (1) effect payments
of principal of and premium and interest on the Notes and, if issued, the
Exchange Notes referred to in the Registration Rights Agreement, or (2)
perform its other obligations under the Indenture, the Warrant Agreement and
the Warrant Registration Rights Agreement.
(xxiv) Possession of Licenses and Permits. Except as disclosed in the
Offering Memorandum, the Company and its subsidiaries possess such permits,
licenses, approvals, concessions, consents and other authorizations
(including, without limitation, all permits required for the operation of
the business of the Company and its subsidiaries by the Republic of Poland
and the United Kingdom) (collectively, "Governmental Licenses") issued by
the appropriate domestic or foreign regulatory agencies or bodies, other
governmental authorities or self regulatory organizations necessary to
conduct the business now operated by them or any business currently proposed
to be conducted by them as described in the Offering Memorandum; the Company
and its subsidiaries, except as disclosed in the Offering Memorandum and
except where the failure to so comply would not, singly or in the aggregate,
have a Material Adverse Effect, are in compliance with the terms and
conditions of all such Governmental Licenses; all of the Governmental
Licenses are valid and in full force and effect, except as disclosed in the
Offering Memorandum and except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and except as disclosed
in the Offering Memorandum, neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect. To the knowledge of the Company,
except as described in the
10
Offering Memorandum, there exists no reason or cause that could justify the
variation, suspension, cancellation or termination of any such Governmental
Licenses held by the Company or any of its subsidiaries with respect to the
construction or operation of their respective businesses, which variation,
suspension, cancellation or termination could reasonably be expected to have
a Material Adverse Effect.
(xxv) No Additional Documents. There are no contracts or documents of a
character that would be required to be described in the Offering Memorandum,
if it were a prospectus filed as part of a registration statement on Form
S-1 under the 1933 Act, that are not described as would be so required. All
such contracts to which the Company is party have been duly authorized,
executed and delivered by the Company and constitute valid and binding
agreements of the Company.
(xxvi) Management Agreements. Each of the Management Agreements (as
such term is defined in the Indenture) to which any subsidiary of the
Company is a party has been duly authorized, executed and delivered by each
of the parties thereto and constitutes a valid and binding agreement of each
of the parties thereto.
(xxvii) Title to Property. The Company and its subsidiaries own no real
property, except as described in the Final Offering Memorandum and except
for approximately 3,200 square meters of real property owned by a Designated
Subsidiary, and have good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Offering Memorandum or (b) do not, singly or in the
aggregate, materially 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 or
any of its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Offering Memorandum, are in full force and effect, and
neither the Company nor any of its subsidiaries has any notice of any claim
of any sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
any subsidiary thereof to the continued possession of the leased or
subleased premises under any such lease or sublease, except for such claims
as could not reasonably be expected to result in a Material Adverse Effect.
(xxviii) Tax Returns. Except as disclosed in the Offering Memorandum,
the Company and its subsidiaries have filed all domestic and foreign tax
returns that are required to be filed or have duly requested extensions
thereof and have paid all taxes required to be paid by any of them and any
related assessments, fines or penalties, except for any such tax,
assessment, fine or penalty that is being contested in good faith and by
appropriate proceedings, and except for such claims as could not result in a
11
Material Adverse Effect; and adequate charges, accruals and reserves have
been provided for in the financial statements referred to in Section
1(a)(iv) above in respect of all domestic and foreign taxes for all periods
as to which the tax liability of the Company or any of its subsidiaries has
not been finally determined or remains open to examination by applicable
taxing authorities.
(xxix) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any domestic or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B)
the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to any Environmental Law against the Company or any
of its subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or Environmental Laws.
(xxx) Investment Company Act. The Company is not, and upon the issuance
and sale of the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Offering Memorandum will not be,
an "investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxxi) Internal Controls. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded
12
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
The Company and its subsidiaries have not made, and, to the knowledge of the
Company, no employee or agent of the Company or any subsidiary has made, any
payment of the Company's funds or any subsidiary's funds or received or
retained any funds (A) in violation of the Foreign Corrupt Practices Act, as
amended, or (B) in violation of any other applicable law, regulation or rule
(except, in the case of this clause (B), for such violations as could not
reasonably be expected to result in a Material Adverse Effect) or that would
be required to be disclosed in the Offering Memorandum if it were a
prospectus filed as part of a registration statement on Form S-1 under the
1933 Act.
(xxxii) Taxes on Subsidiary Indebtedness. Except as described in the
Offering Memorandum, as of the date hereof, no material income, stamp or
other taxes or levies, imposts, deductions, charges, compulsory loans or
withholdings whatsoever are or will be, under applicable law in the Republic
of Poland, imposed, assessed, levied or collected by the Republic of Poland
or any political subdivision or taxing authority thereof or therein or on or
in respect of principal, interest, premiums, penalties or other amounts
payable under any indebtedness of any of the Company's subsidiaries held by
the Company.
(xxxiii) Insurance. Except as otherwise disclosed in the Offering
Memorandum, the Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses
or similar industries in similar locations.
(xxxiv) Rule 144A Eligibility. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same
class as securities listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or quoted in a U.S. automated interdealer quotation system.
(xxxv) No General Solicitation. None of the Company, its affiliates, as
such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"), or
any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation) has engaged or
will engage, 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.
(xxxvi) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 2
and the procedures set forth in Section 6 hereof, it is not necessary in
connection with the
13
offer, sale and delivery of the Securities to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this Agreement, the
Warrant Agreement and the Offering Memorandum to register the Securities
under the 1933 Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended (the "1939 Act").
(xxxvii) Reporting Company. The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act.
(b) Officers' Certificates. Any certificate titled "Officers' Certificate"
or "Secretary's Certificate" signed by any officer of the Company or any of its
subsidiaries which is delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to the Initial Purchasers as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Securities. 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 the Initial Purchasers and the Initial Purchasers agree to
purchase from the Company, at the price set forth in Schedule B, the aggregate
number of Units set forth in Schedule A opposite the name of such Initial
Purchaser plus any additional Units which such Initial Purchaser may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) Payment. Payment of the purchase price for, and delivery of certificates
for, the Securities shall be made at the office of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be
agreed upon by the Initial Purchasers and the Company, at 9:00 A.M. on the
fourth business day after the date hereof (unless postponed in accordance with
the provisions of Section 11), or such other time not later than ten business
days after such date as shall be agreed upon by the Initial Purchasers and the
Company (such time and date of payment and delivery being herein called the
"Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Initial Purchasers for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them. It is understood that
each Initial Purchaser has authorized the other Initial Purchasers, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Securities which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Initial Purchasers, may (but shall
not be obligated to) make payment of the purchase price for the Securities to be
purchased by any Initial Purchaser whose funds have not been received by the
Closing Time, but such payment shall not relieve such Initial Purchaser from its
obligations hereunder.
14
(c) Qualified Institutional Buyer. Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that it is a
"qualified institutional buyer" within the meaning of Rule 144A under the 1933
Act (a "Qualified Institutional Buyer") and an "accredited investor" within the
meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) Denominations; Registration. Certificates for the Securities shall be in
such denominations and registered in such names as the Initial Purchasers may
request in writing at least one full business day before the Closing Time. The
certificates representing the Units, Notes and Warrants shall be registered in
the name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchasers in The City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will furnish
to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as evidenced by a notice
in writing from the Initial Purchasers to the Company, any material changes in
or affecting the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries which (i) make
any statement in the Final Offering Memorandum (as amended or supplemented)
false or misleading or (ii) are not disclosed in the Final Offering Memorandum
(as amended or supplemented). In such event or if during such time any event
shall occur as a result of which it is necessary, in the reasonable opinion of
any of the Company, its counsel, the Initial Purchasers or counsel for the
Initial Purchasers, to amend or supplement the Final Offering Memorandum in
order that the Final Offering Memorandum not include any 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 then
existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to each Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue
15
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 existing at
the time it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers, which consent shall not be unreasonably
withheld. Neither the consent of the Initial Purchasers, nor the Initial
Purchasers' delivery of any such amendment or supplement, shall constitute a
waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will use its
best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities for offering and sale under the applicable securities laws of such
jurisdictions as the Initial Purchasers may designate and will maintain such
qualifications in effect as long as required for the sale of the Securities;
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.
(e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of McGraw
Hill, Inc. ("S&P"), and Xxxxx'x Investors Service Inc. ("Moody's") to provide
their respective credit ratings of the Securities.
(f) DTC and PORTAL. The Company will cooperate with the Initial Purchasers
and use its best efforts (i) to permit the Securities to be eligible for
clearance and settlement through the facilities of DTC and (ii) include
quotation of the Securities on PORTAL.
(g) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of 180 days from the
date of the Offering Memorandum, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, directly or indirectly, issue, sell, offer or agree to
sell, grant any option for the sale of, or otherwise dispose of, any other debt
securities of the Company or securities of the Company that are convertible
into, or exchangeable for, the Securities or such other debt securities, other
than the Exchange Notes referred to in the Registration Rights Agreement.
16
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and any filing of the Offering Memorandum (including financial statements and
any schedules or exhibits and any document incorporated therein by reference)
and of each amendment or supplement thereto, (ii) the preparation, printing and
delivery to the Initial Purchasers of this Agreement, any Agreement Among
Initial Purchasers, the Warrant Agreement, the Registration Rights Agreement,
the Warrant Registration Rights Agreement, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Initial Purchasers,
including any charges of DTC in connection therewith, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof and any filing for review of the offering with
the National Association of Securities Dealers (the "NASD"), including filing
fees and the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection therewith and in connection with the preparation of the
Blue Sky Survey, any supplement thereto and any Legal Investment Survey, (vi)
the fees and expenses of the Trustees and paying agents, including the fees and
disbursements of counsel for the Trustees in connection with the Indenture and
the Securities, (vii) any fees payable in connection with the rating of the
Securities and (viii) any fees payable to the NASD and any fees and expenses
payable in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322.
(b) Termination of Agreement. If this Agreement is terminated by the Initial
Purchasers in accordance with the provisions of Section 5 or Section 10(a)(i)
hereof, the Company shall reimburse the Initial Purchasers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers incurred through the date of termination.
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations of
the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinions of Counsel for Company. (i) At the Closing Time, the Initial
Purchasers shall have received two favorable opinions, each dated as of the
Closing Time, of Xxxxx & XxXxxxxx, counsel for the Company, each in form and
substance satisfactory to counsel for the Initial Purchasers, one to the effect
as set forth in Exhibit D hereto and one to
17
the effect set forth in Exhibit E hereto and each to such further effect as
counsel to the Initial Purchasers may reasonably request.
(ii) At the Closing Time, the Initial Purchasers shall have received
the favorable opinion, dated as of the Closing Time, of Xxxxx & XxXxxxxx,
Amsterdam, special Dutch counsel to the Company, in form and substance
satisfactory to counsel to the Initial Purchasers, to the effect set forth
in Exhibit F hereto and to such other effect as counsel to the Initial
Purchasers may reasonably request.
(iii) At the Closing Time, the Initial Purchasers shall have received
the favorable opinion, dated as of the Closing Time, of Ashurst Xxxxxx
Xxxxx, special English counsel to the Company, in form and substance
satisfactory to counsel to the Initial Purchasers, to the effect set forth
in Exhibit G hereto and to such other effect as counsel to the Initial
Purchasers may reasonably request.
(b) Opinion of United States Counsel for Initial Purchasers. At the Closing
Time, the Initial Purchasers shall have received the favorable opinion, dated as
of the Closing Time, of Shearman & Sterling, counsel for the Initial Purchasers,
with respect to the matters set forth in (i), (ii), (vi) through (xiii),
inclusive and the penultimate paragraph of Exhibit D hereto.
(c) Opinion of Polish Counsel for Initial Purchasers. At the Closing Time,
the Initial Purchasers shall have received the favorable opinion, dated as of
the Closing Time, of Salans Xxxxxxxxx & Heilbronn Sp. z o.o., special Polish
counsel to the Initial Purchasers, in form satisfactory to the Initial
Purchasers with respect to certain of the matters set forth in paragraphs (i)
through (vii), inclusive, of Exhibit E hereto.
(d) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Initial
Purchasers shall have received a certificate of the chief executive officer of
the Company and of the chief financial or chief accounting officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, and (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time.
(e) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from KPMG Polska Sp. z
o.o. a letter dated such date, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to initial
18
purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(f) Bring-down Comfort Letter. At the Closing Time, the Initial Purchasers
shall have received from KPMG Polska Sp. z o.o. a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(g) Maintenance of Rating. At the Closing Time, the Notes shall be rated at
least B3 by Moody's Investor's Service Inc. and B by Standard & Poor's Ratings
Services and the Company shall have delivered to the Initial Purchasers a letter
dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Initial Purchasers, confirming that the Securities have such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the Company's or
any Designated Subsidiary's other debt securities by any "nationally recognized
statistical rating agency", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such statistical rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Securities or any of the
Company's or any Designated Subsidiary's other debt securities.
(h) PORTAL. At the Closing Time, the Securities shall have been designated
for trading on PORTAL.
(i) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Initial Purchasers and
counsel for the Initial Purchasers.
(j) Execution of Agreements. At the Closing Time, the Warrant Agreement, the
Registration Rights Agreement, the Warrant Registration Rights Agreement, and
the Indenture, each in form and substance reasonably satisfactory to the Initial
Purchasers, shall have been duly executed and delivered and shall be in full
force and effect.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by 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 except as
19
provided in Section 4 and except that Sections 1, 7, 8 and 9 shall survive any
such termination and remain in full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers. Offers and
sales of the Securities shall only be made to persons whom the offeror or
seller reasonably believes to be qualified institutional buyers (as defined
in Rule 144A under the 1933 Act). Each Initial Purchaser agrees that it will
not offer, sell or deliver any of the Securities in any jurisdiction except
under circumstances that will result in compliance with the applicable laws
thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Securities in such
jurisdictions.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 0000 Xxx) will be
used in the United States in connection with the offering or sale of the
Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the applicable
Initial Purchaser, be a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from such
Initial Purchaser or affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under the
1933 Act, (B) are being sold to them without registration under the 1933 Act
in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be
offered, sold or otherwise transferred prior to (x) the date which is two
years (or such shorter period of time as permitted by Rule 144(k) under the
1933 Act or any successor provision thereunder) after the later of the date
of original issue of the Securities and (y) such later date, if any, as may
be required under applicable laws except (1) to the Company or any of its
subsidiaries, (2) inside the United States in accordance with (x) Rule 144A
to a person whom the seller reasonably believes is a Qualified Institutional
Buyer that is purchasing such Securities for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made
20
in reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act, or (3) pursuant to an effective
registration statement.
(v) Restrictions on Transfer. The transfer restrictions and the other
provisions set forth in the Offering Memorandum under the heading "Notice to
Investors", including the legend required thereby, shall apply to the
Securities except as otherwise agreed by the Company and the Initial
Purchasers. Following the sale of the Securities by the Initial Purchasers
to Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for any losses,
damages or liabilities suffered or incurred by the Company, including any
losses, damages or liabilities under the 1933 Act, arising from or relating
to any resale or transfer of any Security.
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of the
Securities, the Company agrees that, prior to any offer or resale of the
Securities by the Initial Purchasers, the Initial Purchasers and counsel for
the Initial Purchasers shall have the right to make reasonable inquiries
into the business of the Company and its subsidiaries. The Company also
agrees to provide answers to each prospective Subsequent Purchaser of
Securities who so requests concerning the Company and its subsidiaries (to
the extent that such information is available or can be acquired and made
available to prospective Subsequent Purchasers without unreasonable effort
or expense and to the extent the provision thereof is not prohibited by
applicable law) and the terms and conditions of the offering of the
Securities, as provided in the Offering Memorandum.
(ii) Integration. The Company agrees that it will not and will cause
its Affiliates not to solicit any offer to buy or make any offer or sale of,
or otherwise negotiate in respect of, securities of the Company of any class
if, as a result of the doctrine of "integration" referred to in Rule 502
under the 1933 Act, such offer or sale would render invalid (for the purpose
of (i) the sale of the Securities by the Company to the Initial Purchasers,
(ii) the resale of the Securities by the Initial Purchasers to Subsequent
Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of
the 1933 Act provided by Section 4(2) thereof or by Rule 144A or otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
21
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or otherwise
acquire any Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
owner or otherwise (except as agent acting as a securities broker on behalf
of and for the account of customers in the ordinary course of business in
unsolicited broker's transactions) unless, immediately upon any such
purchase, the Company or any Affiliate shall submit such Securities to the
Trustees for cancellation.
(c) Resale Pursuant to Rule 144A. Each Initial Purchaser understands that
the Securities have not been and will not be registered under the 1933 Act and
may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except pursuant to an exemption from the registration
requirements of the 1933 Act. Each Initial Purchaser severally represents and
agrees, that, except as permitted by Section 6(a) above, it has offered and sold
Securities and will offer and sell Securities as part of their distribution at
any time only in accordance with Rule 144A under the 1933 Act or another
applicable exemption from the registration provisions of the 1933 Act. Each
Initial Purchaser severally agrees that, at or prior to confirmation of a sale
of Securities (other than a sale of Securities pursuant to Rule 144A) it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it or through it during
the restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may not
be offered or sold within the United States or to or for the account or
benefit of U.S. persons as part of their distribution at any time
except in accordance with Rule 144A under the Securities Act or another
exemption from the registration requirements of the Securities Act."
(d) Offers and Sales in Poland and The Netherlands. The Initial Purchasers
have advised the Company and hereby severally represent and warrant to and agree
with the Company that they will not offer or sell the Securities in Poland
except under circumstances which do not constitute a public offering or
distribution of securities under Polish laws and regulations. The Initial
Purchasers further agree they will not offer or sell the Securities in The
Netherlands except under circumstances which do not constitute a public offering
or distribution (aanbod buiten besloten xxxxx) of securities under the laws and
regulations of The Netherlands.
22
(e) Offers and Sales in the United Kingdom. Each Initial Purchaser hereby
severally represents, warrants and agrees that (i) it has not offered or sold
and prior to the expiration of the period six months after the date of issue of
the Securities will not offer to sell by means of any document any Securities to
persons in the United Kingdom except 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
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom and (iii) it has only issued or passed on, and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(f) Representation and Warranty of Initial Purchasers. Each Initial
Purchaser severally represents and agrees that it has not entered and will not
enter into any contractual arrangements with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. 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 or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in 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 any 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; provided that (subject to Section 7(d)
below) any such settlement is effected with the written consent of the
Company; and
23
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation, or
any 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 (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any 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 through Xxxxxxx Xxxxx expressly for use in the Offering
Memorandum (or any amendment thereto); and provided further that the foregoing
indemnity with respect to any untrue statement contained in or omission from the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchasers (or any party controlling the Initial Purchasers) if the person
asserting any such loss, liability, claim, damage or expense purchased the
Securities which are the subject thereof directly from the Initial Purchasers in
the offering contemplated by this Agreement and if the Company shall sustain the
burden of proving that such person did not receive a copy of the Final Offering
Memorandum, or any amendment or supplement thereto, at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or omission from such Preliminary Offering Memorandum was
corrected in the Final Offering Memorandum, or such amendment or supplement
thereto, subject to the following: the failure to deliver a copy of the Final
Offering Memorandum or such amendment or supplement thereto does not result from
non-compliance by the Company with Section 3(a) or 3(b) hereof.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company by such Initial Purchaser through Xxxxxxx Xxxxx expressly for use
in the Offering Memorandum.
(c) Actions Against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable 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 such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified
24
parties shall be selected by Xxxxxxx Xxxxx, and, in the case of parties
indemnified pursuant to Section 7(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any 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 parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own 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. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 7(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) 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 of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
25
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial Purchasers
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the
Subsequent Purchasers were offered to the Subsequent Purchasers exceeds the
amount of any damages which such Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent 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 8, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Initial Purchaser,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Initial Purchasers' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the principal
number of Units set forth opposite their respective names in Schedule A hereto
and not joint.
26
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Initial Purchaser or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Initial Purchasers.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchasers 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 time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, the
Republic of Poland or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, or in Polish taxation affecting the
Company or any subsidiary thereof or the transactions contemplated by the
Offering Memorandum, or currency exchange rates for the U.S. dollar into the
Polish Zloty or exchange controls applicable to the U.S. dollar or the Polish
Zloty, in each case the effect of which is such as to make it, in the judgment
of the Initial Purchasers, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission, or if
trading generally on the American Stock Exchange, the New York Stock Exchange or
in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system 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 Polish, United States Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7,
8 and 9 shall survive such termination and remain in full force and effect.
SECTION 11. Default by One or More of the Initial Purchasers. If one of the
Initial Purchasers shall fail at the Closing Time to purchase the Securities
which it is obligated to purchase under this Agreement (the "Defaulted
Securities"), the non-defaulting Initial Purchaser shall have the right, within
24 hours thereafter, to make arrangements for itself, or any other Initial
Purchasers, to purchase all, but not less than all, of the Defaulted Securities
in
27
such amounts as may be agreed upon and upon the terms herein set forth; if,
however, the non-defaulting Initial Purchaser shall not have completed such
arrangements within such 24-hour period, then 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 which does not result in a termination of
this Agreement, either the non-defaulting Initial Purchaser 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 11.
SECTION 12. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed, sent by
courier or express delivery company or transmitted by any standard form of
telecommunication. Notices to the Initial Purchasers shall be directed to the
Initial Purchasers at Xxxxxxx Xxxxx & Co., North Tower, World Financial Center,
New York, New York 10281-1209 attention of Xxxx Xxxxx; notices to the Company
shall be directed to it at Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000-0000, attention of Xxxxxx X. Xxxxxx, III.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
28
SECTION 16. 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.
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
@ENTERTAINMENT, INC.
By
--------------------------
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
-------------------------------------
Authorized Signatory
X.X. XXXXXX SECURITIES INC.
By
-------------------------------------
Authorized Signatory
SCHEDULE A
Number of
Name of Underwriter Units
--------------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................................ 201,600
X.X. Xxxxxx Securities Inc............................ 50,400
--------
Total................................................. 252,000
--------
--------
Sch A - 1
SCHEDULE B
@ENTERTAINMENT, INC.
252,000 Units, each Unit consisting of one $1,000 aggregate principal amount
at maturity of 14 1/2% Senior Discount Notes due 2008 and four Warrants, each
Warrant entitling the holder thereof to purchase 1.81 shares of Common Stock.
1. The initial offering price of the Units shall be $496.43 per Unit, plus
accreted amortization of original issue discount on the Notes, if any, from July
14, 1998.
2. The purchase price to be paid by the Initial Purchasers for the Units
shall be $480.296 per Unit, plus accreted amortization of original issue
discount on the Notes, if any, from July 14, 1998.
3. The interest rate on the Notes shall be 14 1/2% per annum; interest will
be payable semiannually on January 15 and July 15, commencing January 15, 2004.
4. The Notes will mature on July 15, 2008 and will be issued in
denominations of $1,000 aggregate principal amount at maturity or integral
multiples thereof.
5. The redemption price supplied on page 134 of the Offering Memorandum (and
correspondingly in the Indenture) with respect to redemptions of Notes from the
proceeds of Public Equity Offerings shall be 114.500% of the Accreted Value
thereof as of the redemption date.
6. The redemption prices supplied on page 134 of the Offering Memorandum
(and correspondingly in the Indenture) relating to the Notes shall be:
Redemption
Year Price
------- ----------
July 15, 2003 107.250%
July 15, 2004 104.833
July 15, 2005 102.417
July 15, 2006 and thereafter 100.000
Sch B-1
SCHEDULE C
LIST OF DESIGNATED SUBSIDIARIES
1. ETV Sp. z o.o.
2. Telewizja Kablowa GOSAT Sp. z o.o.
3. Ground Zero Media Sp. z o.o.
4. Otwocka Telewizja Kablowa Sp. z o.o.
5. Polska Telewizja Kablowa S.A.
6. Polska Telewizja Kablowa Krakow S.A.
7. Polska Telewizja Kablowa Lublin S.A.
8. Polska Telewizja Kablowa Operator Sp. z o.o.
9. Polska Telewizja Kablowa Szczecin Sp. z o.o.
10. Polska Telewizja Kablowa Warszawa S.A.
11. Poltelkab Sp. z o.o.
12. ProCable Sp. z o.o.
13. Szczecinska Telewizja Kablowa Sp. z o.o.
14. Telkat Sp. z o.o.
15. TV Kabel Sp. z o.o.
16. At Entertainment Limited
17. Poland Communications, Inc.
18. Poland Cablevision (Netherlands) B.V.
19. Sereke Holding B.V.
Sch C-1
20. Wizja TV Sp. z o.o.
21. KOLOR-SAT Sp. z o.o. (application for a PAR permit pending)
22. WPTS Sp. z o.o.
23. @Entertainment Programming, Inc.
Sch C-2
