EXHIBIT 10.2
UIH AUSTRALIA/PACIFIC, INC.
$45,000,000
14% Series C Senior Discount Notes due 2006
of UIH Australia/Pacific, Inc.
PURCHASE AGREEMENT
September 16, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
UIH Australia/Pacific, Inc. (the "Company"), a Colorado corporation, hereby
confirms its agreement with you as set forth below.
1. Issuance of Notes. The Company proposes to issue and sell to
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation (the "Purchaser")
$45,000,000 in aggregate principal amount at maturity of the Company's 14%
Series C Senior Discount Notes due 2006 (the "Series C Notes"). The Series C
Notes will be issued pursuant to the terms of an indenture (the "Indenture")
between the Company and Firstar Bank of Minnesota, N.A., as trustee (the
"Trustee").
The Series C Notes will be offered and sold to you pursuant to an exemption
from the registration requirements under the Securities Act of 1933, as amended
(the "Act"). The Company has prepared disclosure material dated September 16,
1997 (the "Offering Memorandum"), relating to the Company and the Series C
Notes.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Indenture.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Series C Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES
FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c) OR
(d), BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO
THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OR ANY SECURITY ISSUED IN EXCHANGE FOR OR IN SUBSTITUTION HEREOF OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
You have advised the Company that you will make offers (the "Exempt
Resales") of the Series C Notes purchased hereunder on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely to persons whom you
reasonably believe to be "qualified institutional buyers," as defined in Rule
144A under the Act ("QIBs"). The QIBs that purchase the Series C Notes from the
Purchaser in the initial placement thereof are referred to herein as the
"Eligible Purchaser." The Purchaser will offer the Series C Notes to such QIBs
initially at a price equal to 66.50% of the principal amount at maturity
thereof. Such price may be changed by the Purchaser at any time without notice.
Holders (including subsequent transferees) of the Series C Notes will have
the registration rights set forth in the registration rights agreement to be
dated the Closing Date (as defined below) between the Company and the Purchaser
(the "Registration Rights Agreement") in substantially the form of Exhibit A
hereto, for so long as such Series C Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
and on the terms set forth therein, (i) a registration statement under the Act
(the "Exchange Offer Registration Statement") relating to the 14% Series D
Senior Discount Notes due 2006 (the "Exchange Notes" and together with the
Series C Notes, the "Securities") to be offered in exchange for the Series C
Notes (the "Exchange Offer"), and (ii) a shelf registration statement pursuant
to Rule 415 under the Act (the "Shelf Registration Statement") relating to the
resale by certain holders of the Series C Notes, and to use its best efforts to
cause such Registration Statements to be declared effective. Pursuant to the
Registration Rights Agreement, the Company will file a registration statement
(the "Registration Statement") for the purpose of registering the Exchange Notes
under the Act.
This Purchase Agreement (this "Agreement"), the Securities, the Indenture,
the Registration Rights Agreement and the warrant agreement in the form attached
to the Indenture as Exhibit E to the Indenture (the "Warrant Agreement") are
hereinafter referred to collectively as the "Transaction Documents."
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell to you, and the Purchaser
agrees to purchase from the Company
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the Series C Notes. The aggregate purchase price for the Series C Notes shall be
65.17% of their principal amount at maturity (the "Purchase Price").
3. Delivery and Payment. Delivery to the Purchaser of and payment for
the Series C Notes shall be made at 9:00 a.m., New York City time, on September
23, 1997 (the "Closing Date") at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other time or
place as you and the Company shall designate.
One or more of the Series C Notes in definitive form, registered in the
name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), having
an aggregate principal amount corresponding to the aggregate principal amount of
the Series C Notes sold pursuant to Exempt Resales to QIBs (collectively, the
"Master Note") shall be delivered by the Company to you (or as you direct),
against payment by you of the Purchase Price therefor. On the Closing Date,
payment shall be made to the Company by wire transfer in immediately available
funds to such accounts with such financial institutions as the Company may
direct; provided, however, that, in the event that the Purchaser advance to the
Company the Purchase Price, but the closing does not take place prior to 1:30
p.m. New York City time on the Closing Date, or such later time as you and the
Company shall agree, the Company shall reimburse the Purchaser following the
Closing Date for one day's interest for each day (beginning with the Closing
Date and either (i) ending on, but not including, the date of the actual closing
if it occurs prior to 1:30 p.m. New York City time, or (ii) ending on, and
including, the business day immediately following the actual closing if it
occurs after 1:30 p.m. New York City time) accrued on the Purchase Price at the
Federal funds rate (on the Closing Date), plus 50 basis points. The Master Note
and Definitive Securities shall be made available to you for inspection not
later than 9:30 a.m. on the business day immediately preceding the Closing Date.
The parties hereto agree that in connection with the sale of the Series C Notes,
interest on the Series C Notes shall be deemed to commence to accrue on the
Closing Date notwithstanding the date of the actual closing hereunder.
4. Agreements of the Company. The Company agrees with each of you as
follows:
(a) To advise you promptly and, if requested by the Purchaser, confirm
such advice in writing, (i) of the issuance by any state securities commission
of any stop order suspending the qualification or exemption from qualification
of any of the Series C Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state securities commission
or other regulatory authority, and (ii) of any change in the Company's condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations, or of the happening of any event that makes any statement of a
material fact made in the Offering Memorandum untrue or that requires the making
of any additions to or changes in the Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any of
the Series C Notes under any state securities or Blue Sky laws, and if at any
time any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption of any of the Series C Notes
under any state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish you, without charge, with as many copies of the Offering
Memorandum, and any amendments or supplements thereto, as you may reasonably
request. The Company consents to the use of the Offering Memorandum, and any
amendments and supplements thereto, by you in connection with offers or sales of
the Series C Notes.
(c) Not to amend or supplement the Offering Memorandum prior to the
Closing Date, unless you shall previously have been advised thereof and shall
not have objected thereto after being furnished a copy thereof. The Company
shall promptly prepare, upon your request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with Exempt
Resales.
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(d) If, after the date hereof, any event shall occur as a result of which,
in the reasonable judgment of the Company or in the reasonable judgment of
either of you or of your counsel, it becomes necessary to amend or supplement
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances when the Offering Memorandum is delivered to an Eligible
Purchaser which is a prospective purchaser, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
applicable law, forthwith to prepare an appropriate amendment or supplement to
the Offering Memorandum so that the statements therein as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Offering Memorandum will comply with
applicable law.
(e) To cooperate with you and your counsel in connection with the
qualification of the Securities under the securities or Blue Sky laws of such
jurisdictions as you may request and to continue such qualification in effect
for as long as may be necessary to complete the distribution of the Exempt
Resales; provided, however, that the Company shall not be required in connection
therewith to register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of process
in suits or taxation, other than as to matters and transactions relating to the
Exempt Resales, in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to and in connection with: (i) the
printing, processing, filing, distribution and delivery of the Offering
Memorandum (including, without limitation, financial statements and exhibits)
and all amendments and supplements thereto, (ii) the printing, processing,
execution, distribution and delivery of this Agreement, the other Transaction
Documents, any memoranda describing state securities or Blue Sky laws and all
other agreements, memoranda, correspondence and other documents printed,
distributed and delivered in connection herewith and with the offer or sale of
the Securities, (iii) the issuance and delivery by the Company of the
Securities, (iv) the qualification of the Securities for offer and sale under
the securities or Blue Sky laws of the several states (including, without
limitation, the fees and disbursements of your counsel relating to such
registration or qualification and memoranda relating thereto and any filing fees
in connection therewith), (v) furnishing such copies of the Offering Memorandum,
and all amendments and supplements thereto, as may be reasonably requested for
use in connection with Exempt Resales, (vi) the preparation of certificates for
the Securities (including, without limitation, printing and engraving thereof),
(vii) the fees, disbursements and expenses of the Company's counsel and
accountants, all expenses and listing fees in connection with the application
for quotation of the Series C Notes in the National Association of Securities
Dealers, Inc. ("NASD") Automated Quotation System - PORTAL ("PORTAL"), (ix) all
fees and expenses (including fees and expenses of counsel) of the Company in
connection with approval of the Securities by DTC for "book-entry" transfer, (x)
the performance by the Company of its other obligations under this Agreement and
the other Transaction Documents and (xi) the rating of the Securities by
investment rating agencies.
(g) To use the proceeds from the sale of the Series C Notes in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(h) Not to claim voluntarily, and to resist actively any attempts to claim,
the benefit of any usury laws against the holders of any Securities.
(i) To do and perform all things required to be done and performed under
this Agreement by it on, prior to, or after the Closing Date and to use its best
efforts to satisfy all conditions precedent on its part to the delivery of the
Series C Notes.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act), other than the
Series C Notes, in a manner that would require the registration under the Act of
the sale to you or Eligible Purchaser of the Series C Notes.
(k) For so long as any of the Securities remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any holder and any prospective purchaser of such Securities from
such holder, the information required by Rule 144A(d)(4) under the Act.
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(l) Except as otherwise permitted under the Act, it will not, and will not
authorize or permit any person acting on its behalf to, solicit any offer to buy
or offer to sell the Securities by means of any form of general solicitation or
general advertising (as such terms are used in Regulation D under the Act) or in
any manner involving a public offering within the meaning of Section 4(2) of the
Act.
(m) To use its best efforts to cause the Exchange Offer to be made on the
appropriate form to permit registration of the Series D Notes to be offered in
exchange for the Series C Notes and to comply with all applicable Federal and
state securities laws in connection with the Exchange Offer.
(n) To comply with all of its agreements set forth in the Transaction
Documents, and all agreements set forth in the representation letter of the
Company to DTC relating to the approval of the Series C Notes by DTC for "book-
entry" transfer.
(o) To use its best efforts to effect the inclusion of the Series C Notes
in PORTAL.
(p) During a period of five years following the date of this Agreement, to
deliver to each of you promptly upon their becoming available, copies of all
current, regular and periodic reports filed by the Company with the Commission
or any securities exchange or with any governmental authority succeeding to any
of the Commission's functions.
5. Representations and Warranties. (a) The Company represents and
warrants to each of you that:
(i) The Offering Memorandum has been prepared in connection with the
Exempt Resales. The Offering Memorandum does not, and any supplement or
amendment thereto, if any, prepared by the Company will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (i) shall not
apply to statements in or omissions from the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity
with information relating to you furnished to the Company in writing by you
expressly for use therein. The Company acknowledges for all purposes under
this Agreement that the statements set forth in the last paragraph on the
cover page, the stabilization legend appearing as the first paragraph on
page 2 and in the third full paragraph and the fourth sentence of the
fourth paragraph appearing under the caption "Plan of Distribution" in the
Offering Memorandum constitute the only written information furnished to
the Company by you expressly for use in the Offering Memorandum (or any
amendment or supplement thereto) pertaining to any arrangement or agreement
with respect to any party other than you. No stop order preventing the use
of the Offering Memorandum, or any amendment or supplement thereto, or any
order asserting that any of the transactions contemplated by this Agreement
are subject to the registration requirements of the Act or the applicable
laws of any other jurisdiction, has been issued.
(ii) When the Series C Notes are issued and delivered pursuant to this
Agreement, none of the Series C Notes will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that are
listed on a national securities exchange registered pursuant to the
Exchange Act or that are quoted in a United States automated interdealer
quotation system.
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(iii) Each of (A) the Company, (B) Salstel Media Holdings Pty Limited
("SMH") and Salstel Media Investments Pty Limited ("SMI" and together with
SMH and each entity in which either SMH or SMI holds a direct or indirect
investment in capital stock, debentures or other equity interests,
"Salstel") and (C) the corporations in which the Company has a direct or
indirect investment (other than (x) Australis Media Limited ("Australis")
and (y) Salstel) (the "Corporate Subsidiaries") and (D) UIH-SFCC, L.P.
("SFCC") and UIH-SFCC Holdings, L.P. ("SFCC Holdings," and together with
SFCC, the "Partnerships," and together with the Corporate Subsidiaries, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation or a limited partnership, as the case may be, in good standing
under the laws of its respective jurisdiction of formation, has all
requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is currently being conducted
and as described in the Offering Memorandum, and is duly qualified and in
good standing as a foreign corporation authorized to do business in each
jurisdiction or place in which the nature of its business or its ownership,
leasing or operation of its respective properties and assets or the conduct
of its business requires such qualification.
(iv) Schedule I hereto is a complete and accurate list of every
partnership, corporation or other business enterprise in which the Company
has a direct or indirect investment. All of the outstanding capital stock,
debentures and other equity interests of each of the Company and each of
the Subsidiaries and of Salstel has been duly authorized and validly
issued, is fully paid and nonassessable and was not issued in violation of
any preemptive or similar rights (whether provided pursuant to any
certificate of incorporation, by-laws, memorandum and articles of
incorporation, partnership agreement or similar organizational document
(each, an "Organizational Document") or contractually) and the Company's
indirect or direct ownership interest or investment with respect to each
Subsidiary and Salstel and Australis is in all material respects as
described in the Offering Memorandum and all such capital stock, debentures
or other equity interests are owned by the Company free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance,
equities and claims or restrictions on transferability, or the payment of
dividends or distributions on such capital stock, debentures or other
equity interests, except as set forth in the Offering Memorandum. There
are no outstanding subscriptions, rights, warrants, calls, commitments of
sale or options to acquire, or instruments convertible into or exchangeable
for, any such shares of capital stock, other equity interest or debentures
of such Subsidiaries or Salstel, except as disclosed in the Offering
Memorandum. The Company holds, directly or indirectly, a majority of the
outstanding securities presently entitled to vote for the election of
directors of each of CTV and STV and currently has the right to designate
five of the six directors of each of CTV and STV.
(v) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each
of the other Transaction Documents and, in each case, to consummate the
transactions contemplated thereby, including, without limitation, the
corporate power and authority to authorize, issue, sell and deliver the
Securities as contemplated by this Agreement or, in the case of the Series
D Notes, as contemplated by the Registration Rights Agreement, and to
perform its obligations hereunder and thereunder.
(vi) This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the valid and legally binding
agreement of the Company and is enforceable against the Company in
accordance with its terms.
(vii) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will be a
valid and legally binding obligation of the Company, enforceable against
the Company in accordance with its terms. The Indenture, when executed and
delivered, will conform to the summary description thereof in the Offering
Memorandum.
(viii) The Series C Notes have been duly and validly authorized for
issuance and sale to you by the Company pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof,
will be valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture. The Series C Notes, when issued, authenticated
and delivered, will conform to the description thereof in the Offering
Memorandum.
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(ix) The Series D Notes have been duly and validly authorized for
issuance by the Company, and when issued and authenticated in accordance
with the terms of the Indenture and the Registration Rights Agreement will
be valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture.
(x) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms. The
Registration Rights Agreement, when executed and delivered, will conform to
the description thereof in the Offering Memorandum.
(xi) The Warrant Agreement has been duly authorized by the Company.
(xii) Neither the Company nor Salstel nor any of the Subsidiaries is
in violation of its respective Organizational Documents. Neither the
Company nor any Subsidiary is in default in the performance of any bond,
debenture, note, indenture, mortgage, deed of trust, license or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its assets or properties is subject, or is in violation of
any law, statute, rule, regulation, judgment or court decree applicable to
any of them or their respective assets or properties, including, without
limitation, the following laws of the Commonwealth of Australia: the
Australian Corporations Law, the Broadcasting Services Act, the
Telecommunications Act and the Foreign Acquisitions and Takeovers Act and
there exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or
instrument, except for such defaults or violations as would not
individually or in the aggregate be reasonably likely to have a Material
Adverse Effect. Each of the Subsidiaries that is incorporated in or was
formed in the Commonwealth of Australia or any political subdivision
thereof (collectively, the "Australian Subsidiaries") and, to the best
knowledge of the Company, Salstel, complies in all material respects with
the terms and conditions of all decisions, binding policies, authorizations
and licenses announced, rendered, granted or regulated, as the case may be,
by the Australian Broadcasting Authority ("ABA"), the Spectrum Management
Agency (the "SMA"), the Australian Competition and Consumer Commission (the
"ACCC"), the Foreign Investment Review Board (the "FIRB") and the
Australian Telecommunications Authority ("AUSTEL"), in each case, with
respect to the operation of the businesses of the Company and the
Australian Subsidiaries and Salstel, including, without limitation, the
Broadcasting Services ▇▇▇ ▇▇▇▇ (the "BSA"), the Radiocommunications ▇▇▇
▇▇▇▇ (the "RCA"), the Telecommunications ▇▇▇ ▇▇▇▇ (the "TCA"), the Trade
Practices Act (the "TPA"), the Australian Foreign Acquisitions and
Takeovers Act 1975 (the "FATA") and the regulations, by-laws, orders and
binding instructions enacted or issued under the authority of such acts,
except for such defaults or noncompliance as would not individually or in
the aggregate be reasonably likely to have a Material Adverse Effect.
Neither the Company nor any of the Subsidiaries is an "associate" of SMH or
SMI; neither the Company nor any of the Subsidiaries has a "substantial
interest" in either CTV or STV; the Company, together with all "associates"
of the Company, does not have an "aggregate substantial interest" in either
CTV or STV, as all such quoted terms are defined in the FATA. No action
has been taken or, to the knowledge of the Company, is threatened or
contemplated by the Treasurer of Australia with respect to any matter
referred to under the caption "Risk Factors--Foreign Acquisitions and
Takeovers Act/Investment Company Act Considerations" in the Offering
Memorandum.
(xiii) The SMH/SMI Agreements (as defined in the Offering Memorandum)
are legal and validly binding agreements. The Company has taken no action
and, to the best knowledge of the Company, Salstel has taken no action and
there exist no condition that would cause the SMH/SMI Agreements to become
invalid or the Company to lose the benefits thereof, except as described in
the Offering Memorandum.
(xiv) The execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents, the issuance and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum,
and the consummation of the transactions contemplated hereby and thereby
will not violate, conflict with or constitute a breach of any of the terms
or provisions of, or a default (or an event that with notice or the lapse
of time, or both, would constitute a default) under, or require consent
under, or result in the imposition of a lien or encumbrance on any assets
or properties of the Company or any of the Subsidiaries, or an acceleration
of indebtedness pursuant to, (A) the Organizational Documents of the
Company or any of the Subsidiaries, (B) any bond, debenture, note,
indenture, mortgage, deed of trust, license or other
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agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their property is or may be bound, (C)
any law, statute, rule or regulation applicable to the Company, any of the
Subsidiaries or any of their assets or properties, or (D) any judgment,
order or decree of any court, regulatory body, administrative or other
governmental agency, authority or official having jurisdiction over, the
Company or any of the Subsidiaries or their assets or properties, except
for such conflicts, breaches or violations as would not individually or in
the aggregate be reasonably expected to result in a material adverse effect
on the condition (financial or otherwise), business, properties, net worth,
results of operations or prospects of the Company and the Subsidiaries and
Salstel, taken as a whole (a "Material Adverse Effect"). No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for the execution,
delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation of the transactions
contemplated hereby and thereby, except such as have been obtained and made
(or, in the case of the Registration Rights Agreement, will be obtained and
made under the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and United States state securities or Blue Sky laws and
regulations or such as may be required by the NASD). No consents or waivers
from any other person are required for the execution, delivery and
performance of this Agreement and the other Transaction Documents by the
Company and the consummation of the transactions contemplated hereby and
thereby, other than such consents and waivers as have been obtained, or
except where the failure to obtain such consents or waivers would not
individually or in the aggregate be reasonably expected to have a Material
Adverse Effect.
(xv) There is (A) no legal, regulatory or governmental action, suit
or proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the knowledge of
the Company, threatened or contemplated to which the Company or any of the
Subsidiaries is a party or to which the business or property of the Company
or any of the Subsidiaries is subject, (B) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental agency
or that has been proposed by any governmental body, (C) no injunction,
restraining order or order of any nature by a federal or state court or
foreign court of competent jurisdiction to which the Company or any of the
Subsidiaries is subject issued that, in the case of clauses (A), (B) and
(C) above, (x) might, singly or in the aggregate, result in a Material
Adverse Effect, (y) would interfere with or adversely affect the issuance
of the Securities or (z) in any manner draw into question the validity of
this Agreement or the other Transaction Documents.
(xvi) No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Securities; no injunction, restraining order
or order of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of the Securities
or suspends the sale of the Securities in any jurisdiction referred to in
Section 4(e) hereof; and no action, suit or proceeding is pending affecting
or, to the knowledge of the Company, threatened against the Company or any
of the Subsidiaries before any court or arbitrator or any governmental
body, agency or official which, if adversely determined, would prohibit,
interfere with or adversely affect the issuance or marketability of the
Securities or in any manner draw into question the validity of any of the
Transaction Documents; and every request of the Company by any securities
authority or agency of any jurisdiction for additional information has been
complied with in all material respects.
(xvii) None of the Company or the Subsidiaries has violated any
federal, state or local law relating to discrimination in hiring, promotion
or pay of employees which might result, singly or in the aggregate, in a
Material Adverse Effect.
(xviii) None of the Company or the Subsidiaries has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other
approval required of them under applicable Environmental Laws or is
violating any term or condition of such permit, license or approval, in
each case, which might result, singly or in the aggregate, in a Material
Adverse Effect.
(xix) Each of the Company and the Subsidiaries has (A) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
8
encumbrances and restrictions, except such as are described in the Offering
Memorandum or as would not have a Material Adverse Effect, (B) peaceful and
undisturbed possession under all material leases to which it is party as
lessee, (C) all licenses (including, without limitation, all microwave
multipoint distribution transmission system ("MMDS") and cable transmission
and broadcast licenses), certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and filings
with, all federal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals necessary to engage in the
business currently conducted by it in the manner described in the Offering
Memorandum (each an "Authorization") and (D) no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking
any such Authorization, except as described in the Offering Memorandum.
All such Authorizations are valid and in full force and effect and the
Company and each of the Subsidiaries are in compliance in all respects with
the terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such permit; and,
except as described in the Offering Memorandum, none of such permits
contains any restriction that is materially burdensome to the Company or
any of the Subsidiaries. The descriptions contained in the Offering
Memorandum of statutes, rules, regulations and other laws applicable to the
Company and the Subsidiaries are accurate and complete in all material
respects. All leases to which the Company or any of the Subsidiaries is a
party are valid and binding and no default has occurred and is continuing
thereunder, except such as are described in the Offering Memorandum or such
as would not individually or in the aggregate be reasonably expected to
have a Material Adverse Effect.
(xx) Each of the Company and the Subsidiaries owns or possesses all
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 and trade names, in each case to the extent
disclosed in the Offering Memorandum as being material to the business of
the Company or the Subsidiaries (collectively, the "Intellectual Property")
to the extent currently employed by it in connection with the businesses
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any of the Intellectual Property. To the
knowledge of the Company, the use of such Intellectual Property in
connection with the business and operations of the Company or the
Subsidiaries does not infringe on the rights of any person.
(xxi) All tax returns required to be filed by the Company or any of
the Subsidiaries, in all jurisdictions, have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities or that are due
and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. Neither the Company nor any of the
Subsidiaries knows of any material proposed additional tax assessments
against it.
(xxii) Neither the Company nor any of the Subsidiaries is now or
after the sale of the Series C Notes to be sold by the Company hereunder
and the application of the proceeds from such sale as described in the
Offering Memorandum under the caption "Use of Proceeds" will be (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or analogous foreign laws and regulations, or
(ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or analogous foreign laws and regulations.
(xxiii) There are no holders of securities of the Company or any
other person who, by reason of the execution by the Company of this
Agreement or any other Transaction Document to which it is a party or the
consummation of the transactions contemplated hereby and thereby, have the
right, which has not been waived, to request or demand that the Company
register securities of the Company or any of the Subsidiaries held by them
under the Act or analogous foreign laws and regulations. There is no
holder of any security of the Company or any other person who has the
right, contractual or otherwise, to cause the Company to sell or otherwise
issue to it, or to permit it to underwrite the sale of, the Securities or
any other securities of the Company covered by the Offering Memorandum.
9
(xxiv) The Company and each of the Subsidiaries for which such
information is provided in the Offering Memorandum had at the date hereof,
an authorized and outstanding capitalization as set forth in the Offering
Memorandum. Except as described in the Offering Memorandum, there are no
outstanding options, warrants or other rights calling for the issuance of,
or any commitment, plan or arrangement to issue, any shares of capital
stock of the Company or any Subsidiary or any security convertible into or
exchangeable or exercisable for capital stock of the Company or any
Subsidiary. Except as disclosed in the Offering Memorandum (or any
amendment or supplement thereto), subsequent to the respective dates as of
which such information is given in the Offering Memorandum (or any
amendment or supplement thereto), neither the Company nor any of the
Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries taken as a
whole, and there has not been any change in the capital stock or material
increase in the short-term debt or long-term debt of the Company or any of
the Subsidiaries, or any change or any development that has, or that may
reasonably be expected to have, a Material Adverse Effect, or any discovery
of any change or development that may be reasonably expected to have any
such Material Adverse Effect.
(xxv) Except as disclosed in the Offering Memorandum, there are no
mortgages, charges or security arrangements nor any consensual encumbrances
or other consensual arrangements which restrict (A) the ability of any
Subsidiary to pay dividends or make any other distributions on the shares
of capital stock or other equity interests of or on the debentures of such
Subsidiary to the Company or to any Subsidiary, (B) the ability of the
Company or any of the Subsidiaries to pay any indebtedness owed to the
Company or any Subsidiary, (C) the ability of the Company or any of the
Subsidiaries to make any loans or advances to, or investments in, the
Company or any Subsidiary or (D) the ability of the Company or any of the
Subsidiaries to transfer any of its property or assets to the Company or
any Subsidiary.
(xxvi) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee, agent, co-investor or partner of the
Company or any Subsidiary has made any payment of funds of the Company or
any Subsidiary or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Offering Memorandum.
(xxvii) The Company has complied with all provisions of Florida H.B.
1771 codified as Section 517.075 of the Florida statutes, and all
regulations promulgated thereunder, relating to issuers doing business with
the Government of Cuba or with any person or any affiliate located in Cuba.
(xxviii) The Company has no commitments to fund entities that are not
direct or indirect subsidiaries of the Company.
(xxix) Each certificate signed by any officer of the Company on
behalf of the Company and delivered to the Purchaser or counsel for the
Purchaser at the Closing shall be deemed to be a representation and
warranty by the Company to each Purchaser as to the matters covered
thereby.
(xxx) The Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with management's general
or specific authorizations; (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 accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxi) The Company and each of the Subsidiaries maintain insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and each
of the Subsidiaries and their respective businesses. Neither the Company
nor any of the Subsidiaries has received notice from any insurer or agent
of such insurer that substantial capital improvements or other expenditures
will have to be made in
10
order to continue such insurance. All such insurance is outstanding and
duly in force on the date hereof and will be outstanding and duly in force
on the Closing Date.
(xxxii) None of the Company or the Subsidiaries has (A) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company or any of the Subsidiaries to facilitate the
sale or resale of the Securities or (B) since September 8, 1997 (Y) sold,
bid for, purchased or paid any person any compensation for soliciting
purchases of, the Securities or (Z) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company or any of the Subsidiaries.
(xxxiii) No registration under the Act of the Series C Notes is
required for the sale of the Series C Notes to the Purchaser as
contemplated hereby or for Exempt Resales to the Eligible Purchaser,
assuming (A) that the persons who buy the Series C Notes in the Exempt
Resales are QIBs and (B) the accuracy of the Purchaser's representations
regarding the absence of general solicitation in connection with the sale
of the Series C Notes to the Purchaser and the Exempt Resales described
herein. No form of general solicitation or general advertising was used by
the Company or any of its representatives in connection with the offer and
sale of any of the Series C Notes or in connection with Exempt Resales,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising. No securities
of the same class as the Series C Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(xxxiv) The Offering Memorandum, as of its date, and each amendment
or supplement thereto, as of its date, contains all the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxv) Subsequent to the respective dates as of which information
is given in the Offering Memorandum and up to the Closing Date, except as
set forth in the Offering Memorandum, none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material to the Company and its subsidiaries taken as
a whole, nor entered into any transaction not in the ordinary course of
business. There has not been, singly or in the aggregate, any material
adverse change, or any development which may reasonably be expected to
involve a material adverse change, in the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of the
Company and its subsidiaries, taken as a whole (a "Material Adverse
Change") and there have not been dividends or distributions of any kind
declared, paid or made by the Company or any of the Subsidiaries on any
class of its capital stock or debentures.
(xxxvi) Neither the Company nor any agent thereof acting on behalf
of it has taken, and none of them will take, any action that might cause
this Agreement or the issuance or sale of the Securities to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(xxxvii) The accountants ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
each of which has audited certain of the financial statements which are
included and summarized in the Offering Memorandum, are independent
certified public accountants under Rule 101 of the AICPA's Code of
Professional Conduct and its interpretations and rulings. The financial
statements, together with related schedules and notes, included in the
Offering Memorandum (and any amendment or supplement thereto) present
fairly the respective financial positions, results of operations and
changes in financial positions of the Company and each Subsidiary, in each
case, for which such financial statements are so included, on the basis
stated in the Offering Memorandum at the respective dates or for the
respective periods to which they apply; such financial statements and
related schedules and notes have been prepared in accordance
11
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included in the Offering
Memorandum (and any amendment or supplement thereto) are accurately
presented in all material respects and prepared on a basis consistent with
such financial statements and the books and records of the Company and the
Subsidiaries.
(xxxviii) Immediately prior to and after the Closing Date, the
present fair saleable value of the assets of the Company and its
subsidiaries, taken as a whole, will exceed the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of each such person as they
become absolute and matured. The assets of the Company, immediately after
the Closing Date, will not constitute unreasonably small capital to permit
it to carry out its business as conducted or as proposed to be conducted.
The Company does not intend to, nor does it believe that it will, incur
debts beyond its ability to pay such debts as they mature. Upon the
issuance of the Series C Notes, the present fair saleable value of the
assets of the Company will exceed the amount that will be required to be
paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company as they become absolute
and matured. The assets of the Company, upon the issuance of the Series C
Notes, will not constitute unreasonably small capital to carry out its
business as now conducted, including the capital needs of the Company,
taking into account the projected capital requirements and the capital
availability of the Company.
(xxxix) Except as otherwise disclosed in the Offering Memorandum,
there are no contracts, agreements or understandings between the Company or
any of the Subsidiaries and any person that would give rise to a valid
claim against the Company, any of the Subsidiaries or the Purchaser for a
brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Securities.
The Company acknowledges that the Purchaser and, for purposes of the
opinions to be delivered to the Purchaser pursuant to Section 7 hereof, counsel
to the Company and counsel to the Purchaser will rely upon the accuracy and
truth of the foregoing representations and hereby consents to such reliance.
(b) The Purchaser represents and warrants to the Company and agrees that:
(i) The Purchaser is a QIB, with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the
merits and risks of an investment in the Series C Notes.
(ii) The Purchaser (A) is not acquiring the Series C Notes with a
view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Series C Notes
only to QIBs in reliance on the exemption from the registration
requirements of the Act.
(iii) No form of general solicitation or general advertising has been
or will be used by the Purchaser or any of its representatives in
connection with the offer and sale of any of the Series C Notes, which
would render unavailable to the Company reliance upon the exemption from
the registration requirements of the Act afforded by Section 4(2) thereof,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.
(iv) The Purchaser agrees that, in connection with the Exempt
Resales, it will solicit offers to buy the Series C Notes only from, and
will offer to sell the Series C Notes only to, QIBs. Such Purchaser further
agrees (A) that it will offer to sell the Series C
12
Notes only to, and will solicit offers to buy the Series C Notes only from,
QIBs who in purchasing such Series C Notes will be deemed to have
represented and agreed that they are purchasing such Series C Notes for
their own accounts or accounts with respect to which they exercise sole
investment discretion and that they or such accounts are QIBs, and they are
aware that the sale to them is being made in reliance on an exemption from
the registration requirements of the Act, and they are acquiring such
Series C Notes for investment and not with a view to, or for offer or sale
in connection with, any distribution (within the meaning of the Act) or
fractionalization thereof or with any intention of reselling the Series C
Notes or any part thereof, subject to any requirement of law that the
disposition of their property or the property of such investor account or
accounts be at all times within their control and subject to their ability
to resell such Series C Notes pursuant to Rule 144, 144A, Regulation S or
other exemption from registration available under the Act, and (B) that, in
the case of such QIBs, such QIBs will be deemed to have acknowledged that
the Series C Notes have not been and will not be registered under the Act
and may not be sold except as permitted below, and (C) that, in the case of
such QIBs, such QIBs will be deemed to have agreed that if they should
sell, pledge or otherwise transfer the Series C Notes prior to the third
anniversary of the later of the original issuance of the Series C Notes or
the sale thereof by any affiliate (within the meaning of Rule 144 under the
Act or any successor rule thereto, an "Affiliate") of the Company (computed
in accordance with paragraph (d) of Rule 144 under the Act) or if they were
at the date of such transfer or during the three months preceding such date
of transfer an Affiliate of the Company, they would do so in compliance
with any applicable state securities or "Blue Sky" laws and only (v) to the
Company, (w) in accordance with Rule 144A (as indicated by the box checked
by the transferor on the form of assignment on the reverse of the Series C
Notes certificate), (x) pursuant to any exemption from registration in
accordance with Regulation S under the Act (as indicated by the box checked
by the transferor on the form of assignment on the reverse of the Series C
Notes certificate), or (y) any other applicable exemption under the
securities laws and (D) that, in the case of such QIBs, such QIBs will be
deemed to have acknowledged that they have received the information, if
any, requested by them, have had full opportunity to review such
information and have received all additional information necessary to
verify such information and that they (I) are able to fend for themselves
in the transactions contemplated by the Offering Memorandum, (II) have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of their prospective investment in the
Securities and (III) have the ability to bear the economic risks of their
prospective investment and can afford the complete loss of such investment.
(v) Such Purchaser also understands that the Company and, for purposes
of the opinions to be delivered to you pursuant to Section 7 hereof,
counsel to the Company and counsel to the Purchaser will rely upon the
accuracy and truth of the foregoing representations and hereby consents to
such reliance.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) the Purchaser
and (ii) each person if any, who controls (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act) the Purchaser (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person"), and (iii) the respective officers, directors, partners, employees,
representatives and agents of the Purchaser or any controlling person (any
person referred to in clause (i), (ii), or (iii) may hereinafter be referred to
as an "Indemnified Person") to the fullest extent lawful, from and against any
and all losses, claims, damages, liabilities, judgments, actions and expenses
(including, without limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Person) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such
13
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission that is made in
reliance upon and in conformity with information relating to such Purchaser
furnished in writing to the Company by the Purchaser expressly for use therein.
The foregoing indemnity agreement shall be in addition to any liability which
the Company may otherwise have.
(b) If any action, suit or proceeding (including any governmental
investigation) shall be brought against any Indemnified Person with respect to
which indemnity may be sought against the Company, such Indemnified Person shall
promptly notify the Company in writing (provided, that the failure to give such
notice shall not relieve the Company of its obligations pursuant to this
Agreement) and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all fees and expenses. Any Indemnified Person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both such
Indemnified Person and the Company and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Company, in
which case the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Person, it being understood, however, that
the Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all such Indemnified Persons, which firm shall be designated
in writing by ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ"). The
Company shall not be liable for any settlement of any such action effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Indemnified
Person from and against any loss or liability by reason of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) The Purchaser agrees to indemnify and hold harmless the Company, its
directors, officers and any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Indemnified Person but only
with reference to information relating to such Indemnified Person furnished in
writing by or on behalf of such Indemnified Person expressly for use in the
Offering Memorandum. In case any action shall be brought against the Company,
any of its directors, any such officer or any person controlling the Company
based on the Offering Memorandum and in respect of which indemnity may be sought
against any Purchaser, the Purchaser shall have the rights and duties given to
the Company (except that if the Company shall have assumed the defense thereof,
such Purchaser shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Purchaser), and the Company, its
directors, any such officers and any person controlling the Company shall have
the rights and duties given to the Purchaser, by Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6 is unavailable to
an indemnified party in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Purchaser
on the other hand from the offering of the Series C Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Purchaser on the other hand in connection with the
statements or
14
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchaser on the other
hand shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company, and the total
discounts received by the Purchaser, bear to the total price to investors of the
Series C Notes.The relative fault of the Company on the one hand and the
Purchaser on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
on the one hand or the Purchaser on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, the Purchaser (or related
Indemnified Person) shall not be required to contribute any amount in excess of
the amount by which the total discounts received by it in connection with the
sale of the Series C Notes pursuant to this Agreement exceeds the amount of any
damages which the Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company and of the Purchaser set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Purchaser or any person
controlling such Purchaser, the Company, its directors or officers, or any
person controlling the Company, (ii) acceptance of any Series C Notes and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to the Purchaser or any person controlling the Purchaser, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution, and reimbursement
agreements contained in this Section 6.
7. Conditions of Purchaser's Obligations. The obligations of the
Purchaser under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All of the representations and warranties of the Company contained in
this Agreement shall be true and correct on the date hereof and on the Closing
Date with the same force and effect as if made on and as of the date hereof and
the Closing Date, respectively. The Company shall have performed or complied
with all of the agreements herein contained and required to be performed or
complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies distributed
to the Purchaser not later than 10:00 a.m. New York City time on the date of
this Agreement or at such later date and time as to which you may agree, and no
stop order suspending the qualification or exemption from qualification of any
of the Series C Notes in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance or sale of any of the
Series C Notes; no action, suit or proceeding shall be pending against or
affecting or, to the knowledge of the
15
Company, threatened against, the Company or any of the Subsidiaries or Salstel
before any court or arbitrator or any governmental body, agency or official
that, if adversely determined, would prohibit, interfere with or adversely
affect the issuance or sale of the Series Notes or would have a Material Adverse
Effect or in any manner draw into question the validity of any of the
Transaction Documents; and no stop order, injunction, restraining order, or
order of any nature preventing the use of the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material change, or any
development that is reasonably likely to result in a material change, in the
capital stock or the long-term debt, or material increase in the short-term
debt, of the Company or any of the Subsidiaries or Salstel from that set forth
in the Offering Memorandum, (ii) no dividend or distribution of any kind shall
have been declared, paid or made by the Company or any of the Subsidiaries or
Salstel on any class of its capital stock, and (iii) neither the Company nor any
of the Subsidiaries nor Salstel shall have incurred any liabilities or
obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company and its Subsidiaries and Salstel taken as a whole, and
that are required to be disclosed on a balance sheet in accordance with
generally accepted accounting principles and are not disclosed on the latest
balance sheet included in the Offering Memorandum. Since the date hereof and
since the dates as of which information is given in the Offering Memorandum,
there shall not have been any Material Adverse Change.
(e) You shall have received certificates, dated the Closing Date, signed
by (i) the President or any Vice President and (ii) a principal financial or
accounting officer of the Company confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 7.
(f) You shall have received on the Closing Date an opinion (satisfactory
to you and your counsel), dated the Closing Date, of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
United States counsel for the Company, to the effect that:
(i) Each of the Company and each of the corporate Subsidiaries
incorporated in the United States (collectively, the "U.S. Corporate
Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of Colorado, has all requisite
power and authority to own, lease and operate its assets and properties and
to carry on its business as it is currently being conducted and as
described in the Offering Memorandum and each of UIH-SFCC, L.P. and UIH-
SFCC Holdings, L.P. (the "Partnerships" and, together with the U.S.
Corporate Subsidiaries, the "U.S. Subsidiaries") has been duly formed and
is validly existing as a limited partnership under the laws of Colorado and
has the requisite power and authority to own, lease and operate its assets
and properties and to carry on its business as it is currently being
conducted and as described in the Offering Memorandum, and is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction or place in which the ownership, leasing and
operation of its property and the conduct of its business requires such
qualification, except where failure to be so qualified would not
individually or in the aggregate be reasonably likely to have a Material
Adverse Effect.
(ii) All the outstanding shares of capital stock or other equity
interest of each of the U.S. Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights (whether provided pursuant to
Organizational Documents or, to the best knowledge of such counsel, after
due inquiry, contractually), and, except as set forth in the Offering
Memorandum, are owned by the Company directly, or indirectly through one of
the U.S. Subsidiaries, free and clear, to the best knowledge of such
counsel after due inquiry, of any security interest, lien, adverse claim,
equity or other encumbrance.
(iii) The authorized and outstanding capital stock of the Company is
as set forth in the balance sheet at June 30, 1997 included in the Offering
Memorandum; and the Company's ownership interest with respect to each of
the U.S. Subsidiaries is as described in the Offering Memorandum. All of
the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights (whether
pursuant to the Company's Organizational Documents or, to the best
knowledge of such counsel, after due inquiry, contractually). The capital
stock of the Company conforms as to legal matters in all material respects
to the description thereof in the Offering Memorandum.
16
(iv) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under each of the Transaction
Documents and to consummate the transactions contemplated thereby,
including, without limitation, with the corporate power and authority to
issue, sell and deliver the Securities as contemplated by this Agreement
and to perform its obligations hereunder and thereunder.
(v) The Company has duly and validly authorized, executed and
delivered this Agreement, and this Agreement is enforceable against the
Company in accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws or principles of public policy and subject to the
qualification that the enforceability of the Company's obligations
hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles. This
Agreement conforms as to legal matters in all material respects to the
summary description thereof in the Offering Memorandum.
(vi) The Company has duly and validly authorized, executed and
delivered the Indenture and (assuming the due authorization, execution and
delivery thereof by the Trustee) the Indenture is the valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except (A) as such enforcement may be limited by
(y) bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies
generally, or (z) general principles of equity, regardless of whether
enforcement is sought in a proceeding at law or in equity, and (B) to the
extent that a waiver of rights under any usury laws may be unenforceable.
The Indenture conforms as to legal matters in all material respects to the
summary description thereof in the Offering Memorandum.
(vii) The Series C Notes have been duly and validly authorized for
issuance and sale to you by the Company pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof,
will be the valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture, except (A) as such enforcement may be
limited by (y) bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights and
remedies generally, or (z) general principles of equity, regardless of
whether enforcement is sought in a proceeding at law or in equity, and (B)
to the extent that a waiver of rights under any usury laws may be
unenforceable. The Series C Notes, when issued, authenticated and
delivered, will conform as to legal matters in all material respects to the
summary description thereof in the Offering Memorandum.
(viii) The Series D Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance
with the terms of the Indenture and the Registration Rights Agreement, will
be valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, except (A) as such enforcement may be limited by
(y) bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies
generally, or (z) general principles of equity, regardless of whether
enforcement is sought in a proceeding at law or in equity, and (B) to the
extent that a waiver of rights under any usury laws may be unenforceable.
(ix) The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company, enforceable against the Company
in accordance with its terms, except (A) as such enforcement may be limited
by (y) bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies
generally and (z) general principles of equity, regardless of whether
enforcement is sought in a proceeding at law or in equity and (B) such
counsel need express no opinion as to the enforceability of the
indemnification or contribution provisions contained in Section 7 of the
Registration Rights Agreement. The Registration Rights Agreement conforms,
as to legal matters, in all material respects to the summary description
thereof in the Offering Memorandum.
(x) The Warrant Agreement has been duly and validly authorized by
the Company. The Warrant Agreement conforms as to legal matters in all
material respects to the summary description thereof in the Offering
Memorandum.
17
(xi) When the Series C Notes are issued and delivered pursuant to
this Agreement, none of the Series C Notes will be of the same class
(within the meaning of Rule 144A under the Act) as securities of the
Company that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.
(xii) Neither the Company nor any of the U.S. Subsidiaries is in
violation of its respective Organizational Documents, or to the best of
such counsel's knowledge after reasonable inquiry, is in material default
in the performance of any obligation, agreement or condition contained in
any permit or any bond, debenture, note or other evidence of indebtedness,
except as disclosed in the Offering Memorandum.
(xiii) Registration of the Series C Notes under the Act or
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, is not required in connection with the offer, sale and delivery of
the Series C Notes to the Purchaser or the initial placement of the Series
C Notes by the Purchaser pursuant to the terms of this Agreement, it being
understood that in rendering this opinion such counsel may assume the
accuracy of the representations of the Purchaser and the Company contained
herein and that the offer, sale and delivery of the Series C Notes have
been made as contemplated by this Agreement and the Offering Memorandum.
(xiv) The execution, delivery and performance by the Company of each
of the Transaction Documents, the issuance and sale of the Securities, and
the consummation of the transactions contemplated hereby and thereby, will
not violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default (or an event that with notice or the lapse of
time, or both, would constitute a default) under, or require consent under,
or result in the imposition of a lien or encumbrance on any assets or
properties of the Company or any of its subsidiaries, or an acceleration of
indebtedness pursuant to, (A) the Organizational Documents of the Company
or any of its subsidiaries, (B) any bond, debenture, note, indenture,
mortgage, deed of trust, license or other agreement or instrument, known to
such counsel after reasonable inquiry, to which the Company or any of its
subsidiaries is a party or by which any of them or their property is or may
be bound, (C) any U.S. law, statute, rule or regulation applicable to the
Company, any of the U.S. Subsidiaries or any of their assets or properties,
or (D) any judgment, order or decree of any U.S. court or governmental
agency or U.S. authority, known to such counsel after reasonable inquiry,
having jurisdiction over the Company, any of the U.S. Subsidiaries or their
assets or properties, except such conflicts or violations as would not
individually or in the aggregate be reasonably expected to have a Material
Adverse Effect. No consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency in the United
States is required for the execution, delivery and performance of this
Agreement or the other Transaction Documents, except (subject to clause
(xiii) above) such as have been obtained prior to the date hereof (or, in
the case of the Registration Rights Agreement, are planned to be obtained
or made under the Act, the Trust Indenture Act and state securities or Blue
Sky laws and regulations or such as may be required by the NASD). In
rendering the opinions required in this clause (xiv), such counsel may rely
on the accuracy of the representations of the Purchaser and the Company
contained in this Agreement. No consents or waivers from any other person
are required for the execution, delivery and performance of this Agreement
and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby, other than such consents and
waivers as have been obtained, or except where the failure to obtain such
consents or waivers would not individually or in the aggregate be
reasonably expected to have a Material Adverse Effect.
(xv) To the best knowledge of such counsel, after reasonable
inquiry, no action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any U.S. governmental agency
that prevents the issuance of the Securities, no injunction, restraining
order or order of any nature by a United States federal or state court of
competent jurisdiction has been issued that prevents the issuance of the
Securities and no action, suit or proceeding is pending against or
affecting or threatened against the Company or any of the U.S. Subsidiaries
before any court or arbitrator or any governmental body, agency or official
which, if adversely determined, would prohibit, interfere with or adversely
affect the issuance or marketability of the Securities or in any manner
draw into question the validity of any Transaction Document.
18
(xvi) To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the U.S. Subsidiaries is in
violation of any law, ordinance, administrative or other governmental rule
or regulation applicable to the Company or any of the U.S. Subsidiaries or
of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the U.S. Subsidiaries, except for
such violations as would not individually or in the aggregate be reasonably
likely to have a Material Adverse Effect.
(xvii) Neither the Company nor any of its subsidiaries is now, nor,
after the sale of Series C Notes to be sold by it hereunder and the
application of the proceeds from such sales as described in the Offering
Memorandum under the caption "Use of Proceeds," will they be (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act, or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding company
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(xviii) The statements in the Offering Memorandum, insofar as they
are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate and complete
in all material respects and present fairly the information required to be
shown, to the extent governed by the laws of jurisdictions on which such
counsel expresses an opinion.
(xix) There is (A) to the knowledge of such counsel, after
reasonable inquiry, no legal, regulatory or governmental action, suit or
proceeding before or by any court, arbitrator or governmental agency, body
or official, domestic or foreign, now pending or, to the knowledge of such
counsel, threatened or contemplated to which the Company or any of the U.S.
Subsidiaries is a party or to which the business or property of the Company
or any of the U.S. Subsidiaries is subject, (B) no law, statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental body, to
the extent governed by the laws of jurisdictions on which such counsel
expresses an opinion, (C) to the knowledge of such counsel, after
reasonable inquiry, no injunction, restraining order or order of any nature
by a federal or state court of competent jurisdiction to which the Company
or any of the U.S. Subsidiaries is subject issued that, in the case of
clauses (A), (B) and (C) above, (x) might, singly or in the aggregate,
result in a Material Adverse Effect, (y) would interfere with or adversely
affect the issuance of the Securities or (z) in any manner draw into
question the validity of this Agreement or the other Transaction Documents.
(xx) To the best knowledge of such counsel, there are no holders of
securities of the Company who, by reason of the execution by the Company of
this Agreement or any other Transaction Document or the consummation of the
transactions contemplated hereby or thereby, have the right to request or
demand that the Company register under the act or analogous foreign laws
and regulations securities held by them.
(xxi) Prior to the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement, the Indenture is not
required to be qualified under the Trust Indenture Act.
(xxii) The Offering Memorandum, as of its date, and each amendment or
supplement thereto, if any, as of its date (except for the financial
statements, including the notes thereto, and supporting schedules and other
financial, statistical, and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), contains all the
information specified in, and meeting all the requirements of, Rule
144A(d)(4) under the Act.
(xxiii) To the best knowledge of such counsel after reasonable
inquiry, except as described in the Offering Memorandum, there are no
outstanding options, warrants or other rights calling for the issuance of,
and such counsel does not know of any commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company.
(xxiv) To the best knowledge of such counsel after reasonable
inquiry, except as described in the Offering Memorandum, there is no holder
of any security of the Company or any other person (other than the
Purchaser) who has the right, contractual or otherwise, to cause the
Company to sell or otherwise
19
issue to them, or to permit them to underwrite the sale of, the Securities
or the right to have any other securities of the Company included in the
Offering Memorandum or the right to require registration under the Act of
any securities of the Company.
(xxv) The issuance and sale of the Securities pursuant to the terms
of this Agreement will not violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(xxvi) The statements in the Offering Memorandum under the headings
"Risk Factors--International Tax Risks," "--Original Issue Discount
Consequences," and "Exchange Offer; Registration Rights" (second
paragraph), insofar as they constitute statements of law or legal
conclusions are accurate in all material respects.
In addition, such counsel shall state that it has generally reviewed and
discussed with certain officers and other representatives of the Company,
representatives of the independent public accountants for the Company, your
representatives and your counsel the preparation of the Offering Memorandum and
the statements contained therein and, although such counsel has not
independently verified the accuracy, completeness or fairness of such statements
(except as indicated above), such counsel advises you that, on the basis of the
foregoing, no facts came to its attention that caused it to believe that the
Offering Memorandum (as amended or supplemented, if applicable) as of the date
of the Offering Memorandum or at the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits 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. Without limiting the
foregoing, such counsel may further state that they assume no responsibility
for, and have not independently verified, the accuracy, completeness or fairness
of, and express no view as to, the financial statements, notes and schedules and
other financial or statistical data included in the Offering Memorandum.
The opinions of such counsel described in this subsection shall be rendered
to you at the request of the Company and shall so state therein. In rendering
such opinions, such counsel may rely (A) as to matters involving the application
of the laws of Australia and New Zealand, upon the opinions of ▇▇▇▇▇▇▇▇,
Hollingdale & Page, Australian counsel to the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, New
Zealand counsel to the Company (which opinions shall be addressed to the
Purchaser and shall be dated and furnished to the Purchaser at the Closing Time
and shall be satisfactory in form and substance to counsel for the Purchaser),
and (B) as to matters of fact (but not as to legal conclusions), to the extent
they deem proper, on certificates of responsible officers of the Company and
public officials.
(g) You shall have received on the Closing Date opinions (in form and
substance satisfactory to you and your counsel) dated the Closing Date, of
▇▇▇▇▇▇▇▇, Holdingdale & Page, Australian counsel to the Company, (A) reaffirming
as of the Closing Date the matters set forth in that certain opinion of such
firm dated April 11, 1996 addressed to you and (B) a further opinion to the
effect that:
(i) Each of the Subsidiaries incorporated in Australia (the
"Australian Subsidiaries") and Salstel is a company duly incorporated and
validly existing under the laws of its jurisdiction of incorporation and is
not in liquidation.
(ii) Each of the Australian Subsidiaries and Salstel has the
corporate power to own, lease and operate assets and property and to
conduct its business as described in the Offering Memorandum.
(iii) All of the issued shares and debentures in each of the
Australian Subsidiaries and Salstel have been duly authorized, validly
issued and are fully paid as to par and premium and the holders of such
shares and debentures are not liable to make further contributions in
respect of such shares and debentures and such shares or debentures were
not issued in violation of any pre-emptive or similar rights whether
pursuant to any Organizational Document or contractually.
20
(iv) All of the issued shares and debentures in each of the
Australian Subsidiaries and Salstel are owned beneficially and of record in
the percentages of each such Australian Subsidiaries' and Salstel's total
capital stock and debentures set out in the Offering Memorandum, free of
all liens, encumbrances, equities, limitations on voting rights and claims
or restrictions on transferability or payment of dividends or distributions
upon declaration thereof and provision therefor or upon liquidation or
winding up.
(v) The Australian Subsidiaries have the material permits
necessary to conduct their businesses as subscription television
broadcasters in the manner described in the Offering Memorandum, each
holder of a Broadcasting License or MDS License (or both) has performed its
material obligations under the Broadcasting Licenses or MDS Licenses (or
both) and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination of the Broadcasting Licenses or
the MDS Licenses and each Broadcasting License and MDS License is valid and
in full force and effect and such Broadcasting Licenses and MDS Licenses
together constitute all of the material permits, licences or authorization
required by any governmental body in Australia to conduct such business as
so described.
(vi) Other than as set forth in the Offering Memorandum there are
no legal, regulatory or governmental proceedings pending or threatened to
which any of the Australian Subsidiaries is a party or to which the assets
of the Australian Subsidiaries are subject which, individually or in
aggregate, could reasonably be expected to have a Material Adverse Effect.
(vii) Other than as set forth in the Offering Memorandum none of the
Australian Subsidiaries is in a breach or violation of any of the terms or
provisions of, or in default under (A) any material contract, (B) its
Organizational Documents, or (C) the provisions of the Corporations Law,
the BSA, the FATA or any binding rule or regulation promulgated thereunder
and the Organizational Documents will not cause any of the Australian
Subsidiaries to be in violation or breach of or conflict with (A) any
existing agreements to which an Australian Subsidiary is a party and of
which we are aware, and (B) the provisions of the Corporations Law, the BSA
or FATA, or any binding rule or regulation promulgated thereunder.
(viii) Each Australian Subsidiary is the lessee or sublessee (as the
case may be) of the premises under each material lease and such
Subsidiary's rights under such leases are free and clear of encumbrances
and restrictions, except for such encumbrances or restrictions as would not
individually or in the aggregate be reasonably likely to have a Material
Adverse Effect and is entitled, subject to the rights of the lessor under
the relevant lease to occupy and have quiet enjoyment of the premises the
subject of the lease.
(ix) The statements set out in the Offering Memorandum under the
headings (A) "Risk Factors--Government Regulations; License Renewal"
(second and third paragraphs), (B) "Risk Factors--Foreign Acquisitions and
Takeovers Act/Investment Company Act Considerations," (C) "Regulations--
Australia," (D) "Corporate Organizational Structure--Austar," insofar as
such statements constitute a summary of statutes, rules, regulations or
legal matters provide a fair and accurate summary of such matter.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of the federal laws of the United States and the laws
of the State of Colorado, upon the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ counsel to the Company (which opinion shall be addressed to the Purchaser
and shall be dated and furnished to the Purchaser at the Closing Time and shall
be satisfactory in form and substance to counsel for the Purchaser) and (B) as
to matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Company and the
Subsidiaries and public officials.
(h) You shall have received on the Closing Date an opinion (in form and
substance satisfactory to you and your counsel) dated the Closing Date, of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, New Zealand counsel to the Company to the effect that:
(i) Each of the Subsidiaries incorporated in New Zealand (the "New
Zealand Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction
21
of incorporation, has all requisite corporate power and authority to own,
lease and operate its assets and properties and conduct its business as it
is currently being conducted and as described in the Offering Memorandum.
(ii) Each of the New Zealand Subsidiaries is duly qualified and in
good standing as a foreign corporation authorized under the laws of all New
Zealand jurisdictions where the ownership, leasing and operation of its
respective properties and assets or the conduct of its respective business
requires such qualification.
(iii) All of the outstanding capital stock of each of the New
Zealand Subsidiaries has been duly authorized and validly issued, is fully
paid and nonassessable and was not issued in violation of any preemptive or
similar rights (whether provided pursuant to any Organizational Document
or, to such counsel's knowledge, contractually) and the outstanding shares
of the capital stock owned by UIHNZ of the New Zealand Subsidiaries are
owned beneficially and of record by UIHNZ in the percentages of each such
Subsidiary's total capital stock set forth in the Offering Memorandum, in
each case, free and clear of any security interest, claim, lien, limitation
on voting rights or encumbrance, equities and claims of restrictions on
transferability of, or the payment to UIHNZ of dividends or distributions
on such capital stock, except as set forth in the Offering Memorandum.
(iv) To the knowledge of such counsel, other than as described in
the Offering Memorandum, no legal, regulatory or governmental proceedings
are pending to which any of the New Zealand Subsidiaries is a party or to
which the assets of any of the New Zealand Subsidiaries are subject which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and no such material proceedings have been
threatened against the Company or any of the New Zealand Subsidiaries or
with respect to any of their respective assets or properties.
(v) To the knowledge of such counsel, none of the New Zealand
Subsidiaries is in violation of its respective Organizational Documents or
is in violation of the Telecommunications Act (New Zealand) or the Commerce
Act or any other law, statute, rule, regulation, judgment or court decree
applicable to any of the New Zealand Subsidiaries.
(vi) To the knowledge of such counsel, each of the New Zealand
Subsidiaries has (i) good and marketable title to all of the properties and
assets described in the Offering Memorandum as owned by it, free and clear
of all liens, charges, encumbrances and restrictions, except such as are
described in the Offering Memorandum or as would not have a Material
Adverse Effect and (ii) peaceful and undisturbed possession under all
leases to which it is a party as lessee. To the knowledge of such counsel,
none of the New Zealand Subsidiaries has violated any Environmental Laws,
lacks any permits, licenses or other approvals required of them under
applicable New Zealand Laws or is violating any terms and conditions of any
such permit, license or approval, nor have any of the New Zealand
Subsidiaries violated any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hour laws, nor any provisions of any New Zealand
employee benefit or retirement laws or the rules and regulations
promulgated thereunder, nor have any of the New Zealand Subsidiaries
engaged in any unfair labor practice, which in each case would result in a
Material Adverse Effect.
(vii) To the knowledge of such counsel, each of the New Zealand
Subsidiaries has (i) obtained all consents, approvals, orders,
certificates, licenses, permits, franchises and other authorizations
(collectively, "Authorizations") of and from, and has made all declarations
and filings with, all governmental and regulatory authorities, all self-
regulatory organizations and all courts and other tribunals necessary to
own, lease, license and use their respective properties and assets and to
conduct their respective businesses in the manner described in the Offering
Memorandum, except to the extent that the failure to so obtain or file,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect and (ii) no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking
any such Authorization. All such Authorizations are valid and in full
force and effect and the Company and its Subsidiaries are in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto.
22
(viii) To the knowledge of such counsel, upon consultation with
United States counsel to the Company, there are no material franchises,
contracts, indentures, mortgages, loan agreements, notes, agreements or
other documents to which the Australian Subsidiaries are a party that are
not described in the Offering Memorandum; and the descriptions of such
documents thereto are correct and complete in all material respects.
(ix) The statements in the Offering Memorandum under the headings
"Risk Factors--Government Regulation; License Renewals" (fifth paragraph),
"--Foreign Currency Exchange Rate and Conversion Risks" (penultimate
sentence), "Regulation--New Zealand" and "Corporate Organizational
Structure--Saturn," insofar as such statements constitute a summary of New
Zealand statutes, rules, regulations or legal matters, provide a complete
and correct summary of such statutes, rules, regulations or legal matters
and the information with respect thereto required to be so disclosed (upon
consultation with United States counsel to the Company).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of the federal laws of the United States and the State
of Colorado, upon the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
counsel to the Company (which opinion shall be addressed to the Purchaser and
shall be dated and furnished to the Purchaser at the Closing Time and shall be
satisfactory in form and substance to counsel for the Purchaser) and (B) as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Company and the
Subsidiaries and public officials.
23
(i) [intentionally omitted]
(j) [intentionally omitted]
(k) You shall have received an opinion, dated the Closing Date, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ ("SASM&F"), your United States counsel, in
form and substance reasonably satisfactory to you, covering such matters as are
customarily covered in such opinions.
(l) At the time this Agreement is executed and delivered by the Company
and on the Closing Date, you shall have received letters, substantially in the
form previously approved by you, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
independent public accountants, with respect to the financial statements and
certain financial information contained in the Offering Memorandum.
(m) SASM&F shall have been furnished with such documents and opinions, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters
24
referred to in this Section 7 and in order to evidence the accuracy,
completeness or satisfaction in all respects of any of the representations,
warranties or conditions herein contained.
(n) Prior to the Closing Date, the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
(o) The Company and the Trustee shall have entered into the Indenture and
you shall have received executed counterparts of such agreement.
(p) The Company and the Purchaser shall have entered into the Registration
Rights Agreement and you shall received counterparts, conformed as executed,
thereof.
All opinions, certificates, letters and other documents required by this
Section 7 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to you and your counsel. The Company will furnish the Purchaser with such
conformed copies of such opinions, certificates, letters and other documents as
they shall reasonably request.
8. [intentionally omitted]
9. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the execution hereof. This Agreement may be terminated at
any time on or prior to the Closing Date by you by notice to the Company if any
of the following has occurred: (i) subsequent to the date information is
provided in the Offering Memorandum, any Material Adverse Change which, in your
judgment, materially impairs the investment quality of the Series C Notes, (ii)
any outbreak or escalation of hostilities or other national or international
calamity or crisis or material adverse change in the financial markets of the
United States or elsewhere, or any other substantial national or international
calamity or emergency if the effect of such outbreak, escalation, calamity,
crisis, material adverse change or emergency would, in your judgment, make it
impracticable or inadvisable to market any of the Series C Notes or to enforce
contracts for the sale of any of the Series C Notes, (iii) any suspension or
limitation of trading generally in securities on the New York Stock Exchange or
in the over-the-counter markets or any setting of minimum prices for trading on
such exchange or markets, (iv) any declaration of a general banking moratorium
by either federal or New York authorities, (v) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States, and would, in your judgment, make it
impracticable or inadvisable to market any of the Series C Notes or to enforce
contracts for the sale of any of the Series C Notes, (vi) the enactment,
publication, decree, or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which, in
your judgment, would have a Material Adverse Effect, or (vii) any securities of
the Company or any of its subsidiaries shall have been downgraded or placed on
any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
The indemnities and contribution provisions and other agreements,
representations and warranties of the Company, its officers and directors and of
the Purchaser set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series C Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of either of the
25
Purchaser or by or on behalf of the Company, the officers or directors of the
Company or controlling person of the Company, (ii) acceptance of the Series C
Notes and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Purchaser pursuant to clause
(i) or (vii) of the second paragraph of this Section 9 or because of the failure
or refusal on the part of the Company to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company agrees to reimburse you for all
out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by you. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
4(f) hereof.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Purchaser, any
Indemnified Person referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The terms "successors and assigns" shall not include a purchaser of any of the
Series C Notes from any of the Purchaser merely because of such purchase.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, UIH
Australia/Pacific, Inc. at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, with a copy to Holme
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and (b) if to the Purchaser, c/▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ &
26
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or in any case to such other address as the
person to be notified may have requested in writing.
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York as applied to contracts made and to be
performed in such state. This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the Agreement among
the Company and the Purchaser.
Very truly yours,
UIH AUSTRALIA/PACIFIC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
Accepted and agreed to as of
the date first above written
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
27
SCHEDULE I
Subsidiaries
------------
Century United Programming Ventures Pty Limited
XYZ Entertainment Pty Limited
UIH Austar, Inc.
CTV Pty Limited
▇▇▇▇▇▇▇ Pty Limited
▇▇▇▇▇▇▇ Pty Limited
Keansburg Pty Limited
▇▇▇▇▇▇ Pty Limited
Maxi-Vu Pty Limited
Palara Vale Pty Limited
Auldana Beach Pty Limited
Grovern Pty Limited
Lystervale Pty Limited
Minorite Pty Limited
Vinatech Pty Limited
Communications & Entertainment Australia Pty Limited
Communications & Entertainment Services Pty Limited
Communications & Entertainment Retail Pty Limited
▇▇▇▇▇ Investments Pty Limited
STV Pty Limited
Vermint Grove Pty Limited
Kidillia Pty Limited
Dovevale Pty Limited
Carryton Pty Limited
Xtek Bay Pty Limited
Windytide Pty Limited
Selectra Pty Limited
Chippawa Pty Limited
UIH New Zealand Holdings, Inc.
Saturn Communications Limited
28
UIH-SFCC II, Inc.
UIH-SFCC Holdings, L.P.
UIH-SFCC, L.P.
Societe Francaise des Communications et du Cable S.A.
Telefenua S.A.
United Wireless, Inc.
United Wireless Pty Limited
UIH XYZ Holdings, Inc.
UIH AML, Inc.
UIH Australia/Pacific Finance, Inc.
Other Entities
The Company holds certain securities, as described in the Offering Memorandum,
in the following entities, which entities are not "Subsidiaries" for purposes of
this Agreement.
Salstel Media Holdings Pty Limited
Salstel Media Investments Pty Limited
Australis Media Limited
29