Exhibit 1.1
▇▇▇ Communications, Inc.
Convertible Senior Notes due 2021
Purchase Agreement
New York, New York
February 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
ABN AMRO ROTHSCHILD LLC
FLEET SECURITIES, INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇ Communications, Inc., a corporation organized under the
laws of the State of Delaware (the "Company"), proposes to issue and sell to the
several parties named in Schedule II hereto (the "Initial Purchasers") for whom
you (the "Representatives") are acting as representatives, the respective
principal amounts at maturity set forth in Schedule II hereto of its
$685,000,000 aggregate principal amount at maturity of Convertible Senior Notes
due 2021 (the "Firm Securities"). The Company also proposes to grant to the
Initial Purchasers an option to purchase up to an additional $108,000,000
principal amount at maturity of such Convertible Senior Notes due 2021 to cover
over-allotments, if any (the "Option Securities" and, together with the Firm
Securities, the "Securities"). The Securities will be issued under an indenture
dated as of June 27, 1995 (the "Original Indenture"), between the Company and
The Bank of New York, as trustee (the "Trustee"), as supplemented by the Fourth
Supplemental Indenture to be dated as of February 23, 2001 (the "Supplemental
Indenture," and together with the Original Indenture, the "Indenture") between
the Company and the Trustee.
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To the extent there are no additional parties listed on
Schedule II other than you, the term Representatives as used herein shall mean
you as the Initial Purchasers, and the terms Representatives and Initial
Purchasers shall mean either the singular or plural as the context requires. The
use of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 18
hereof.
The Securities will be convertible into shares of the
Company's Class A Common Stock, par value $1.00 per share (the "Common Stock"),
in accordance with the terms of the Securities and the Indenture, at the initial
conversion rate specified in Schedule I hereto. Upon the first, second, third,
fourth, fifth, tenth and fifteenth anniversaries of the initial issuance date of
the Securities, each holder of Securities may require the Company to purchase
such Securities for a price to be paid, in respect of purchases on the first
anniversary, in cash and, in respect of purchases on subsequent anniversaries,
at the Company's option, in cash or (subject to certain limitations) shares of
Common Stock or any combination thereof, at a purchase price equal to the issue
price of the Securities plus the accrued original issue discount and the accrued
cash interest thereon to, but excluding, the date of such purchase. If prior to
such date of purchase the Securities have been converted to semi-annual coupon
notes following the occurrence of a Tax Event (as defined in the Indenture),
such purchase price will be equal to the Restated Principal Amount (as defined
in the Indenture) plus accrued and unpaid interest from the date of such
conversion (or the most recent date to which interest has been paid or duly
provided) to, but excluding, such date of purchase. Upon each Fundamental Change
(as defined in the Indenture) occurring prior to the second anniversary of the
initial issuance date of the Securities, each holder of Securities may require
the Company to repurchase for cash such holder's Securities (subject to certain
restrictions described below) at a repurchase price equal to the issue price of
the Securities plus the accrued original issue discount and accrued cash
interest thereon to, but excluding, the date of such repurchase. If prior to
such date of repurchase the Securities have been converted to semi-annual coupon
notes following the occurrence of a Tax Event, the Company will be required to
repurchase such Securities at a cash price equal to the Restated Principal
Amount plus accrued and unpaid interest from the date of such conversion (or the
most recent date to which interest has been paid or duly provided) to, but
excluding, such date of repurchase.
The holders of the Securities will have the benefit of a
registration rights agreement (the "Registration Rights Agreement"), to be dated
as of February 23, 2001, between the Company and the Initial Purchasers,
pursuant to which the Company will file a registration statement with the
Commission registering resales of the Securities and the shares of Common Stock
issuable upon conversion of the Securities under the Act subject to the terms
and conditions therein specified.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act. Pursuant to the terms
of the Securities and the Indenture, investors that acquire Securities may only
resell or otherwise transfer such Securities if such Securities are hereafter
registered under the Act or if an exemption from the registration requirements
of the Act is available (including the exemptions afforded by Rule 144A under
the Act).
In connection with the sale of the Securities, the Company has
prepared an offering memorandum, dated February 15, 2001 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
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any information incorporated by reference therein, the "Offering Memorandum").
The Offering Memorandum sets forth certain information concerning the Company
and the Securities. The Company hereby confirms that it has authorized the use
of the Offering Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, any references herein to the terms "amend",
"amendment" or "supplement" with respect to the Offering Memorandum shall be
deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time which is incorporated by reference therein. All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum.
1. Representations and Warranties of the Company. (a) The Company
represents and warrants to, and agrees with, each Initial Purchaser at the
Execution Time and at the Closing Date and at any settlement date for the Option
Securities referred to in Section 3, as follows:
(i) Offering Memorandum. The Offering Memorandum does not, and at the
Closing Date and at any settlement date will not, include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of any of the Initial Purchasers through the
Representatives expressly for use in the Offering Memorandum.
(ii) Integration. Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has, directly or indirectly, solicited any
offer to buy or offered to sell, and will not, directly or indirectly, solicit
any offer to buy or offer to sell, any security under circumstances that would
require the Securities to be registered under the Act.
(iii) Rule 144A Eligibility. The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(iv) Compliance with Regulation S. Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and each
of them has complied with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by Regulation S.
(v) No General Solicitation. Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf has engaged or will
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the Securities
in the United States.
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(vi) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 5 and
the procedures set forth in Exhibit A hereto, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers or
for the initial resale of the Securities by the Initial Purchasers to subsequent
purchasers ("Subsequent Purchasers"), in each case in the manner contemplated by
this Agreement and the Offering Memorandum, to register the Securities under the
Act.
(vii) Reporting Company. The Company is subject to the reporting
requirements of Section 13 of the Exchange Act.
(viii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum, complied and will comply
in all material respects with the requirements of the Act and the Exchange Act,
as applicable, and, when read together with the other information in the
Offering Memorandum, at the Execution Time and at the Closing Date and any
settlement date for the Option Securities, do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ix) Independent Accountants. The accountants who certified the financial
statements and supporting schedules of the Company and its subsidiaries and of
TCA Cable TV, Inc. ("TCA") and its subsidiaries, included in the Offering
Memorandum, are independent public accountants with respect to the Company and
its subsidiaries within the meaning of Regulation S-X under the Act.
(x) Financial Statements. The financial statements of the Company included
in the Offering Memorandum, together with the related schedules and notes,
present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The financial
statements of TCA included in the Offering Memorandum, together with the related
schedules and notes, present fairly the financial position of TCA and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of TCA and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with GAAP applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the Offering
Memorandum present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data included in the Offering Memorandum
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Offering Memorandum. The pro forma financial statements of the Company and its
consolidated subsidiaries and the related notes thereto included in the Offering
Memorandum present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
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(xi) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Offering Memorandum, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as one
enterprise and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(xii) Good Standing of the Company. The Company has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under this Agreement
and the Registration Rights Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(xiii) Good Standing of Subsidiaries. Each "significant subsidiary" of the
Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Offering Memorandum, all of the issued and
outstanding capital stock of each such Subsidiary is owned by the Company,
directly or through subsidiaries, has been duly authorized and validly issued,
is fully paid and non-assessable and is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary. The
only subsidiaries of the Company are (a) the subsidiaries listed on Schedule III
hereto and (b) certain other subsidiaries which, considered in the aggregate as
a single subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
(xiv) Capitalization. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Offering Memorandum in the column entitled
"Historical" under the caption "Capitalization"
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(except for subsequent issuances, if any, pursuant to reservations, agreements
or employee benefit plans included in the Offering Memorandum or pursuant to the
exercise of convertible securities or options included in the Offering
Memorandum). The shares of outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; and
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
(xv) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(xvi) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law). The Indenture has been duly qualified under
the Trust Indenture Act.
(xvii) Authorization of the Registration Rights Agreement. The Registration
Rights Agreement has been duly authorized by the Company and, when executed and
delivered by the Company and the Initial Purchasers, will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(xviii) Authorization of Securities. The Securities have been duly
authorized by the Company for issuance and sale and, on the Closing Date and any
settlement date for the Option Securities, will have been duly executed by the
Company and, when authenticated, issued and delivered in the manner provided for
in the Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). The Securities will be in the form contemplated by the Indenture and each
registered holder thereof will be entitled to the benefits of the Indenture and
the Registration Rights Agreement.
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(xix) Authorization and Description of Capital. The Common Stock conforms
in all material respects to all statements relating thereto contained in the
Offering Memorandum, and such description conforms to the rights set forth in
the instruments defining the same. Upon issuance and delivery of the Securities
in accordance with this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of Common Stock,
subject to the Company's right to elect instead to pay such holder in cash the
market value of such shares of Common Stock, in accordance with the terms of the
Securities and the Indenture; the shares of Common Stock issuable upon such
conversion of the Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action and such shares, when
issued upon such conversion, will be validly issued and will be fully paid and
non-assessable; the shares of Common Stock issuable at the Company's option upon
purchase of the Securities at the option of the holder thereof will have been,
prior to the issuance thereof, duly authorized by all necessary corporate
action, and such shares, if and when issued in accordance with the terms of the
Securities and the Indenture, will be validly issued, fully paid and
non-assessable; no holder of Common Stock will be subject to personal liability
by reason of being such a holder and the issuance of such shares upon such
conversion or purchases will not be subject to the preemptive or other similar
rights of any security holder of the Company.
(xx) Description of the Securities, the Indenture and the Registration
Rights Agreement. The Securities, the Indenture and the Registration Rights
Agreement, at the Execution Time and at the Closing Date and any settlement date
for the Option Securities, conform and will conform, as applicable, in all
material respects to the respective statements relating thereto contained in the
Offering Memorandum.
(xxi) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or other constitutive
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance by the Company of
this Agreement, the Indenture, the Registration Rights Agreement and the
Securities and the consummation of the transactions contemplated in this
Agreement, the Registration Rights Agreement and in the Offering Memorandum
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Offering Memorandum under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement, the Indenture, the Registration Rights
Agreement and the Securities do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, the Agreements
and Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a
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Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws or other constitutive documents of the
Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(xxii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent which, individually or in the aggregate, may reasonably be expected
to result in a Material Adverse Effect.
(xxiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries, which
is required to be disclosed in the Offering Memorandum (other than as disclosed
therein), or which, individually or in the aggregate, might reasonably be
expected to result in a Material Adverse Effect, or which, individually or in
the aggregate, might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement, the Indenture or the Registration Rights
Agreement or the performance by the Company of its obligations hereunder or
thereunder; the aggregate of all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Offering Memorandum, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xxiv) Possession of Intellectual Property. Except as disclosed in the
Offering Memorandum, the Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other patented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, other than those the absence of which would not
have a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
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(xxv)Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the due
execution, delivery or performance by the Company of its obligations under this
Agreement or the Registration Rights Agreement, in connection with the offering,
issuance or sale of the Securities under this Agreement or the consummation of
the transactions contemplated by this Agreement or the Registration Rights
Agreement, or for the due execution, delivery or performance of the Indenture by
the Company, except such as have been already obtained or as may be required
under the Act or state securities laws, the laws of a foreign jurisdiction or
the by-laws and rules of the NASD and except for the qualification of the
Indenture under the Trust Indenture Act.
(xxvi) Possession of Licenses and Permits. The Company and its subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, other than those the absence of which would not
have a Material Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(xxvii) Title to Property. The Company and its subsidiaries have good and
marketable title to all material real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described in the
Offering Memorandum or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company or any of its subsidiaries; and all
of the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or any
of its subsidiaries holds properties described in the Offering Memorandum, are
in full force and effect, and neither the Company nor any subsidiary has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxviii) Investment Company Act. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Offering Memorandum will not be, an
"investment company" as such term is defined in the Investment Company Act.
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(xxix) Environmental Laws. Except as described in the Offering Memorandum
and except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Any certificate signed by any officer of the Company and delivered to
the Initial Purchasers or to counsel for the Initial Purchasers in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company to each Initial Purchaser as to matters covered thereby.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at the price set forth
in Schedule I, the principal amount at maturity of Initial Securities set forth
opposite such Initial Purchaser's name in Schedule II hereto, plus any
additional principal amount at maturity of Initial Securities which such Initial
Purchaser may become obligated to purchase pursuant to the provisions of Section
10 hereof.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Initial Purchasers to purchase, severally and not jointly,
the Option Securities (in multiples of $1,000 principal amount at maturity) at
the price set forth in Schedule I plus accrued Original Issue Discount, if any,
from the Closing Date to the settlement date therefor. The option may be
exercised only to cover over-allotments in the sale of the Firm Securities by
the Initial Purchasers. The option may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of the
Offering Memorandum upon written or telegraphic notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
Initial Purchasers are exercising the option and the settlement date. Delivery
of the Option Securities, and payment therefor, shall be made as provided in
Section 4 hereof. The principal amount of Option Securities to be purchased by
each Initial Purchaser shall be the same percentage of the total number of
Option Securities to be purchased by the Initial Purchasers as such Initial
Purchaser is purchasing of the Firm Securities, subject to such adjustments as
the Representatives shall deem advisable.
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3. Delivery and Payment. Delivery of and payment for the Firm Securities
and the Option Securities (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third Business Day prior to the
Closing Date) shall be made at 9:00 a.m., New York City time, on February 23,
2001, or at such time on such later date (not later than March 21, 2001) as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
10 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives, for the respective accounts of the several Initial
Purchasers, against payment to the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives on the
date specified by the Representatives (which shall be within three Business Days
after exercise of said option), for the respective accounts of the several
Initial Purchasers, against payment to the Company by wire transfer payable in
same-day funds to the account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Initial Purchasers to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Denominations; Registration. Certificates for the Securities shall be
in global form. The global certificates representing the Securities shall be
made available for examination by the Initial Purchasers in The City of New York
no later than 10:00 a.m. on the last business day prior to the Closing Date or
the settlement date for the Option Securities, as the case may be.
5. Offering by Initial Purchasers. Each Initial Purchaser, severally and
not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any Securities
except (i) to those it reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the Act) and that, in connection with each such
sale, it has taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on Rule 144A
or (ii) in accordance with the restrictions set forth in Exhibit A hereto.
12
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Securities in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States.
6. Agreements of the Company. The Company agrees with each Initial
Purchaser that:
(a) Between the date hereof and the completion of the sale of the
Securities by the Initial Purchasers, the Company will immediately notify the
Representatives, and confirm such notice in writing, of (x) any filing made by
the Company of information relating to the offering of the Securities with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the completion of the placement of the
Securities by the Initial Purchasers as evidenced by a notice in writing from
the Representatives to the Company (which it shall provide promptly upon such
completion), any material changes in or affecting the earnings, business affairs
or business prospects of the Company and its subsidiaries which (i) make any
statement in the Offering Memorandum false or misleading or (ii) are not
disclosed in the Offering Memorandum. In such event or if during such time any
event shall occur as a result of which it is necessary, in the reasonable
opinion of the Company, its counsel, the Representatives or counsel for the
Initial Purchasers, to amend or supplement the Offering Memorandum in order that
the Offering Memorandum not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
the Company will forthwith amend or supplement the Offering Memorandum by
preparing and furnishing to the Representatives an amendment or amendments of,
or a supplement or supplements to, the Offering Memorandum (in form and
substance satisfactory in the reasonable opinion of counsel for the Initial
Purchasers) so that, as so amended or supplemented, the Offering Memorandum will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Between the date hereof and the completion of the sale of the
Securities by the Initial Purchasers, the Company will advise the
Representatives promptly of any proposal to amend or supplement the Offering
Memorandum and will not effect such amendment or supplement to which the
Representatives or counsel for the Initial Purchasers shall reasonably object in
writing within three business days of receiving such proposed amendment or
supplement. Neither the consent of the Representatives, nor the Representatives'
delivery of any such amendment or supplement, shall constitute a waiver of any
conditions set forth in Section 7 hereof.
(c) The Company will furnish to each Initial Purchaser and counsel for the
Initial Purchasers, without charge, as many copies of the Offering Memorandum
and any amendment or supplement thereto as each Initial Purchaser may reasonably
request.
(d) The Company will arrange, if necessary, for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions within the United States as the Representatives may designate and
will maintain such qualifications in effect so long as required for the
distribution of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Securities,
in any jurisdiction where it is not now so subject.
13
(e) The Company will not, and will not permit any of its Affiliates to,
resell any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(g) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, the Company will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any directed selling efforts with respect
to the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(j) The Company will cooperate with the Initial Purchasers and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of The Depository Trust Company.
(k) The Company will not for a period of 45 days following the Execution
Time, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇, offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter
into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any Affiliate
of the Company or any person in privity with the Company or any Affiliate of the
Company) directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
14
equivalent position within the meaning of Section 16 of the Exchange Act, any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for or repayable with Common Stock (other than the Securities) or
publicly announce an intention to effect any such transaction. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or the
Common Stock to be delivered upon conversion thereof, (B) any Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof, (C) any Common Stock
issued upon option exercises or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company, (D) any Common Stock
issued upon option exercises or options to purchase Common Stock granted
pursuant to any non-employee director stock plan or dividend reinvestment plan,
(E) any Common Stock to be delivered upon conversion of the Company's Class C
common stock and its Series A Convertible Preferred Stock outstanding at the
Execution Time and (F) any registration statement filed pursuant to the
Registration Rights Agreement or that certain Registration Rights Agreement to
be dated as of February 23, 2001, between the Company, ▇▇▇ Enterprises, Inc.
("CEI") and the Initial Purchasers as initial purchasers of CEI's 2% Senior
Exchangeable Notes due 2021.
(l) The Company will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization (other than
through the Initial Purchasers) or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(m) The Company shall take all reasonable action necessary to enable
Standard & Poor's Rating Services, a division of McGraw Hill, Inc. ("S&P") and
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") to provide their respective credit
ratings of the Securities.
(n) The Company will use its reasonable efforts under the circumstances to
permit the Securities to be designated PORTAL securities in accordance with the
rules and regulations adopted by the NASD relating to trading in the PORTAL
Market.
(o) The Company, during the period when the Offering Memorandum is required
to be delivered by the Initial Purchasers in connection with the sale of the
Securities, will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the Exchange
Act.
(p) The Company will reserve and keep available at all times, free of
preemptive or other similar rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to satisfy any obligations to
issue shares of Common Stock issuable upon conversion of the Securities if the
Company chooses to pay the purchase price for the Securities in Common Stock.
(q) The Company will use its reasonable best efforts to cause all shares of
Common Stock issuable upon conversion of the Securities to be listed on the New
York Stock Exchange.
15
(r) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Indenture and the Registration
Rights Agreement, the issuance of the Securities and the fees of the Trustee;
(ii) the preparation, printing or reproduction of the Offering Memorandum and
each amendment or supplement thereto; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Offering Memorandum, and all amendments or
supplements thereto, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with the
original issuance and sale of the Securities; (v) the printing (or reproduction)
and delivery of this Agreement, any blue sky memorandum and all other agreements
or documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses of
counsel for the Initial Purchasers relating to such registration and
qualification); (vii) admitting the Securities for trading in the PORTAL Market;
(viii) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company; and
(ix) all other costs and expenses incident to the performance by the Company of
its obligations hereunder.
7. Conditions to the Obligations of the Initial Purchasers. The obligations
of the Initial Purchasers to purchase the Firm Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date for the Option
Securities, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Company shall have requested and caused Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
PLLC, counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date or such settlement date for the Option
Securities, as the case may be, and addressed to the Initial Purchasers, to the
effect that:
(i) The Company is an existing corporations in good standing
under the laws of the State of Delaware, has the corporate power and
authority to own its properties and to conduct its business as described in
the Offering Memorandum and to enter into and perform its obligations under
each of this Agreement, the Indenture, the Registration Rights Agreement
and the Securities (collectively, the "Operative Agreements") and, based
solely on a review of certificates of an officer of the Company and from
the appropriate governmental authorities or telephone confirmations from
representatives of such authorities in Georgia, is duly qualified as a
foreign corporation to transact business and is in good standing in
Georgia.
(ii) Each Subsidiary of the Company is an existing corporation in
good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct its
business as described in the Offering Memorandum and, to such counsel's
16
knowledge, based solely on a review of a certificate of an officer of the
Company, is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property as described in the Offering Memorandum requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not result in a Material Adverse Effect.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Original Indenture has been duly qualified under the
Trust Indenture Act. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
(subject, as to enforcement, to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and
fair dealing, and the discretion of the court before which any proceeding
therefor may be brought, regardless of whether enforcement is sought in a
proceeding in equity or at law, and bankruptcy, reorganization, insolvency,
fraudulent conveyance or transfer, moratorium (whether general or specific)
and other laws affecting creditors' rights or the relief of debtors
generally).
(v) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, when issued and authenticated
in the manner provided for in the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee) and
delivered against payment of the consideration therefor specified in this
Agreement, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and the Registration Rights
Agreement and enforceable against the Company in accordance with their
terms (subject, as to enforcement, to general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, and the discretion of the court before which
any proceeding therefor may be brought, regardless of whether enforcement
is sought in a proceeding in equity or at law, and bankruptcy,
reorganization, insolvency, fraudulent conveyance or transfer, moratorium
(whether general or specific) and other laws affecting creditors' rights or
the relief of debtors generally).
(vi) The shares of Common Stock issuable upon conversion of the
Securities have been duly authorized and reserved for issuance upon such
conversion and such shares, when issued and delivered by the Company upon
such conversion, will be validly issued, fully paid and non-assessable;
and, to such counsel's knowledge, the issuance of such shares upon such
conversion will not be subject to preemptive or other similar rights
arising by law or otherwise.
(vii) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
17
execution and delivery by the Initial Purchasers, constitutes a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms (subject, as to enforcement, to general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the
discretion of the court before which any proceeding therefor may be
brought, regardless of whether enforcement is sought in a proceeding in
equity or at law, and bankruptcy, reorganization, insolvency, fraudulent
conveyance or transfer, moratorium (whether general or specific) and other
laws affecting creditors' rights or the relief of debtors generally). In
rendering the foregoing opinion, such counsel need not express any opinion
as to the enforceability of the indemnification or contribution provisions
of the Registration Rights Agreement.
(viii) The documents incorporated by reference in the Offering
Memorandum (other than the financial statements and schedules or other
financial information and statistical data included therein or omitted
therefrom, as to which such counsel need express no opinion), when they
were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act.
(ix) To such counsel's knowledge and other than as set forth in
the Offering Memorandum, there is not pending or threatened in writing any
action, suit, proceeding, inquiry or investigation, governmental or
otherwise, to which the Company or any Subsidiary is a party which would
reasonably be expected to have a Material Adverse Effect, or that seeks to
restrain, enjoin, prevent the consummation of, or otherwise challenge the
issuance or sale of the Securities pursuant to this Agreement or the
application of the proceeds therefrom.
(x) The information included or incorporated by reference (A) in
the Offering Memorandum under the captions "Description of the Notes,"
"Registration Rights," "Description of Capital Stock," and "Certain United
States Federal Income Tax Considerations" and (B) in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999 under the captions
"Business--Competition" and "--Legislation and Regulation," to the extent
that it constitutes matters of United States Federal laws, rules and
regulations referred to therein, legal conclusions or summaries of the
provisions of the Company's certificate of incorporation and bylaws or the
Operative Agreements referred to therein, have been reviewed by such
counsel and accurately describes in all material respects the matters
referred to therein.
(xi) The statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 1999 under the caption "Legal Proceedings,"
as supplemented by the related disclosure in the Company's Form 8-K dated
February 13, 2001, to the extent that such statements constitute summaries
of legal proceedings, have been reviewed by such counsel and, to such
counsel's knowledge, accurately describe such legal proceedings in all
respects material to the business of the Company as described in the
Offering Memorandum; provided, however, that such counsel may state that
such counsel has not been retained to represent the Company or any
Subsidiary or Affiliate of the Company in connection with such legal
proceedings.
18
(xii) The Securities will be classified as indebtedness for
United States federal income tax purposes.
(xiii) To such counsel's knowledge, no consent, approval,
authorization or order of, or qualification with, any governmental agency
or body is required under the laws of the United States, the laws of the
State of New York and the Delaware General Corporation Law (collectively,
"Applicable Law") for the execution and delivery by the Company of the
Operative Agreements, or the consummation by the Company (as if
consummation occurred on the date of such opinion) of the transactions
contemplated thereby, except as has already been acquired or as may be
required under state securities or "Blue Sky" laws.
(xiv) The issuance of the Securities and the execution, delivery
and performance (as if performance occurred on the date of such opinion) by
the Company of the Operative Agreements and consummation (as if
consummation occurred on the date of such opinion) of the transactions
contemplated herein and therein do not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xxi) of this
Agreement) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, any Agreements and Instruments identified in such
opinion (except for such conflicts, breaches, defaults or Repayment Events
or liens, charges or encumbrances that the Company has advised such counsel
would not, individually or in the aggregate, have a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the certificate of incorporation or bylaws or other constitutive documents
of the Company or any Subsidiary, or, to such counsel's knowledge, any
Applicable Law or to such counsel's knowledge, any judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary and
specifically applicable to the Company and any Subsidiary.
(xv) To such counsel's knowledge, the Company is not, nor with
the giving of notice or lapse of time or both would the Company be, in
violation of any judgment, injunction, order or decree of the Federal
Communications Commission (the "FCC") other than those that the Company has
advised such counsel would not, individually or in the aggregate, have a
Material Adverse Effect.
(xvi) The execution, delivery and performance (as if such
performance occurred on the date of such opinion) by the Company of this
Agreement does not violate the Communications Act or any rules or the
regulations thereunder binding on the Company or its Subsidiaries or any
order, writ, judgment, injunction, decree or award of the FCC binding on
the Company or its Subsidiaries of which such counsel has knowledge.
19
(xvii) The Company is not an "investment company" as such term is
defined in the Investment Company Act.
(xviii) No registration under the Act of the Securities is
required for the sale of the Securities to the Initial Purchasers as
contemplated by this Agreement and the Offering Memorandum or for the
initial resale of the Securities by the Initial Purchasers to Subsequent
Purchasers in the manner contemplated by this Agreement and the Offering
Memorandum (the "Exempt Resales") (i) assuming that each Initial Purchaser
is a "qualified institutional buyer," as defined in Rule 144A under the Act
(a "QIB"), (ii) assuming and subject to, the accuracy of and compliance
with, the representations and agreements of the Initial Purchasers and the
Company contained in this Agreement, and (iii) assuming that Exempt Resales
are made by the Initial Purchasers in accordance with this Agreement and
within the United States solely to QIBs and outside the United States in
compliance with Regulation S under the Act (it being understood that such
counsel need express no opinion as to any subsequent resale of any
Securities by any Subsequent Purchaser); and
In addition, such counsel shall state (i) that in the course of the
preparation of the Offering Memorandum (other than the documents
incorporated or deemed incorporated by reference therein), such counsel
participated in conferences with officers and representatives of the
Company, representatives of the independent certified public accountants of
the Company and representatives of the Initial Purchasers and their counsel
at which conferences the contents of the Offering Memorandum and related
matters were discussed and (ii) that, although such counsel is not passing
upon or assuming responsibility for the accuracy, completeness or fairness
of the statements contained or incorporated by reference in the Offering
Memorandum and has not made any independent investigation, check or
verification of facts for the purpose of rendering this opinion (except as
described in paragraphs (x) and (xi) above), on the basis of such
participation referred to in clause (i), nothing has come to such counsel's
attention that leads them to believe that the Offering Memorandum (except
for financial statements and schedules or other financial information or
statistical data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need make no statement), at the
Execution Time or at the Closing Date or any settlement date for the Option
Securities, contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States,
the laws of the State of New York and the Delaware General Corporation Law
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the Initial Purchasers and (B) as
20
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the
Offering Memorandum in this Section 6(a) include any amendment or
supplement thereto at the Closing Date.
(b) The Representatives shall have received from Shearman & Sterling,
counsel for the Initial Purchasers, such opinion or opinions, dated the Closing
Date or such settlement date for the Option Securities, as the case may be, and
addressed to the Initial Purchasers, with respect to the issuance and sale of
the Securities, the Indenture, the Registration Rights Agreement, the Offering
Memorandum (as amended or supplemented to the Closing Date) and other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(c) The Company shall have furnished to the Representatives a certificate
of the Company, signed by the Chairman of the Board, the President, any
Executive or Senior Vice President or the Treasurer and the principal financial
or accounting officer of the Company, dated the Closing Date, to the effect that
the signers of such certificate have carefully examined the Offering Memorandum,
any amendment or supplement to the Offering Memorandum and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) since the date of the most recent financial statements included
in the Offering Memorandum (exclusive of any amendment or supplement
thereto), there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, except as set
forth in or contemplated in the Offering Memorandum (exclusive of any
amendment or supplement thereto).
(d) At the Execution Time, at the Closing Date and at any settlement date
for the Option Securities, the Company shall have requested and caused each of
Deloitte & Touche LLP, in relation to the Company, and KPMG LLP, in relation to
TCA, to furnish to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date and such settlement date, in form and
substance satisfactory to the Representatives, containing statements and
information of the type ordinary included in accountants' "comfort letters" to
initial purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(e) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Offering Memorandum (exclusive of any amendment or
supplement thereto), there shall not have been any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising from transactions in the ordinary course of
business.
21
(f) At the Execution Time, the Securities shall be rated at least Baa2 by
▇▇▇▇▇'▇ and BBB by S&P, and the Company shall have delivered to the
Representatives a letter, dated the Closing Date, from each such rating agency,
or other evidence satisfactory to the Representatives, confirming that the
Securities have such ratings; and subsequent to the Execution Time, there shall
not have been any decrease in the rating assigned to the Securities or any of
the Company's other debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change in any such rating that does not indicate the direction of the
possible change.
(g) At the Execution Time, the Representatives shall have received a
lock-up agreement substantially in the form attached hereto as Exhibit B signed
by the persons listed on Schedule IV hereto.
(h) Prior to the Closing Date or any settlement date for the Option
Securities, the Company shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers, this Agreement and all
obligations of the Initial Purchasers hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall
be delivered at the offices of Shearman & Sterling, counsel for the Initial
Purchasers, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, on the Closing Date.
8. Reimbursement of Initial Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because of any termination pursuant to Section 11 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Initial Purchaser, the directors, officers, employees and
agents of each Initial Purchaser and each person who controls any Initial
22
Purchaser within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or in any
amendment thereof or supplement thereto) or any information provided by the
Company to any holder or prospective purchaser of Securities pursuant to Section
5(g), in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Initial Purchaser through the Representatives
specifically for inclusion therein; provided, further, that as to the Offering
Memorandum the foregoing indemnity shall not inure to the benefit of any Initial
Purchaser (or any director, officer, employee, agent or person controlling such
Initial Purchaser) on account of any loss, claim, damage, liability or action
arising from the sale of Securities to any person by such Initial Purchaser if
such Initial Purchaser failed to send or give a copy of the Offering Memorandum,
as amended or supplemented, to that person and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in the Offering Memorandum was corrected in said amended or
supplemented Offering Memorandum and the delivery thereof would have constituted
a complete defense to the claim of that person, unless such failure resulted
from non-compliance by the Company with Section 5(a) or (b). For purposes of the
second proviso to the immediately preceding sentence, the term Offering
Memorandum shall not be deemed to include the documents incorporated by
reference therein, and no Initial Purchaser shall be obligated to send or give
any document incorporated by reference in the Offering Memorandum to any person.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold harmless the Company, its directors and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Initial Purchaser,
but only with reference to written information relating to such Initial
Purchaser furnished to the Company by or on behalf of such Initial Purchaser
through the Representatives specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Initial Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
23
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 9 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchasers severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Initial Purchasers may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Initial Purchasers on the other from the offering of the Securities; provided,
however, that in no case shall any Initial Purchaser (except as may be provided
in any agreement among Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the total price of the
Securities purchased by such Initial Purchaser hereunder less any damages which
the Initial Purchaser has otherwise been required to pay by reason of any untrue
or alleged untrue statement of fact or omission or alleged omission of a
material fact. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Initial Purchasers severally
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
24
it, and benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions, in each case as set forth on
the cover of the Offering Memorandum. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Initial Purchasers on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchasers agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), 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. For purposes
of this Section 9, each person who controls an Initial Purchaser within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
10. Default by an Initial Purchaser. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser or Initial Purchasers hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Initial Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the principal amount at maturity of Securities set forth opposite their names in
Schedule II hereto bears to the aggregate principal amount at maturity of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
aggregate principal amount at maturity of Securities which the defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase shall
exceed 10% of the aggregate principal amount at maturity of Securities set forth
in Schedule II hereto, the remaining Initial Purchasers shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Initial Purchasers do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Initial Purchaser or the Company. In the event of a default by any Initial
Purchaser as set forth in this Section 10, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Offering Memorandum or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company and any nondefaulting Initial Purchaser for damages
occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
25
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Offering Memorandum (exclusive
of any amendment or supplement thereto).
12. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Initial Purchaser or the Company or any of the
officers, directors, employees, agents or controlling persons referred to in
Section 9 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 8 and 9 hereof shall survive the termination or
cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax no.: (212)
▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to it at ▇▇▇ Communications, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer.
14. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 9
hereof, and no other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
26
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"▇▇▇▇▇▇▇ ▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended and the rules and regulations of the Commission promulgated
thereunder.
27
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Initial Purchasers.
▇▇▇ COMMUNICATIONS, INC.
By /s/ ▇▇▇▇ ▇. Major
-----------------
Name: ▇▇▇▇ ▇. Major
Title: Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
ABN AMRO ROTHSCHILD LLC
FLEET SECURITIES, INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
SCHEDULE I
▇▇▇ COMMUNICATIONS, INC.
$685,000,000 Convertible Senior Notes due 2021
1. The initial offering price per $1,000 principal amount at maturity of
the Securities shall be $695.03, which, together with the .348% per annum cash
interest on the principal amount at maturity, represents a yield to maturity of
2.25% per annum (computed on a semiannual bond equivalent basis).
2. The Securities shall be convertible into shares of Class A Common Stock,
par value $1.00 per share, of the Company (the "Common Stock") at an initial
rate of 11.8135 shares of Common Stock per $1,000 principal amount at maturity
of Securities.
3. The purchase price to be paid by the Initial Purchasers for the
Securities shall be $679.39, being an amount equal to the initial offering price
per $1,000 principal amount at maturity of Securities set forth above, less
$15.64 per $1,000 principal amount at maturity of Securities.
4. Prior to February 26, 2003, the Securities will not be redeemable.
5. The redemption prices to be supplied on page 20 of the Offering
Memorandum (and correspondingly in the Indenture) shall be:
(1) (2) (3)
Note Accrued Original Redemption Price
Redemption Date Issue Price Issue Discount (1) + (2)
------------------------------------- ---------------- -------------------- ------------------
February 26, 2003.................... $695.03 $24.83 $719.86
February 23, 2004.................... $695.03 $37.52 $732.55
February 23, 2005.................... $695.03 $50.59 $745.62
February 23, 2006.................... $695.03 $63.96 $758.99
February 23, 2007.................... $695.03 $77.64 $772.67
February 23, 2008.................... $695.03 $91.62 $786.65
February 23, 2009.................... $695.03 $105.92 $800.95
February 23, 2010.................... $695.03 $120.54 $815.57
February 23, 2011.................... $695.03 $135.50 $830.53
February 23, 2012.................... $695.03 $150.79 $845.82
February 23, 2013.................... $695.03 $166.43 $861.46
February 23, 2014.................... $695.03 $182.42 $877.45
February 23, 2015.................... $695.03 $198.77 $893.80
February 23, 2016.................... $695.03 $215.50 $910.53
February 23, 2017.................... $695.03 $232.60 $927.63
February 23, 2018.................... $695.03 $250.09 $945.12
February 23, 2019.................... $695.03 $267.98 $963.01
SchI-1
(1) (2) (3)
Note Accrued Original Redemption Price
Redemption Date Issue Price Issue Discount (1) + (2)
------------------------------------- ---------------- -------------------- ------------------
February 23, 2020.................... $695.03 $286.27 $981.30
At stated maturity................... $695.03 $304.97 $1,000.00
SchI-2
6. The Purchase Dates and Purchase Prices to be supplied on page 21 of the
Offering Memorandum and correspondingly in the Indenture shall be:
Purchase Date Purchase Price
------------- --------------
February 23, 2002 $707.26
February 23, 2003 $719.76
February 23, 2004 $732.55
February 23, 2005 $745.62
February 23, 2006 $758.99
February 23, 2011 $830.53
February 23, 2016 $910.53
7. The prices referred to in paragraphs 5 and 6 above are subject to
adjustment upon the occurrence of a Tax Event, and the subsequent conversion of
the Securities to semiannual coupon notes in the manner specified in the
Offering Memorandum.
SchI-3
SCHEDULE II
Principal Amount At
Maturity of Securities
Initial Purchaser to be Purchased
----------------- ---------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. ............................................................ $ 256,875,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ................................... 256,875,000
Banc of America Securities LLC. ...................................................... 34,250,000
Credit Suisse First Boston Corporation. .............................................. 34,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. ................................................... 34,250,000
ABN AMRO Rothschild LLC. ............................................................. 17,125,000
Fleet Securities, Inc. . ............................................................. 17,125,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. . ........................................................ 17,125,000
▇▇ ▇▇▇▇▇ Securities Corporation. ..................................................... 17,125,000
-----------
Total.........................................................................$ 685,000,000
============
SCHEDULE III
List of Subsidiaries
▇▇▇ Communications Las Vegas, Inc.
Cox Classic Cable, Inc.
CoxCom, Inc.
CCI PCS, Inc.
SCHEDULE IV
List of Persons Subject to Lock-up:
▇▇▇ Enterprises, Inc.
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 5(a) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until one year after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 5(a) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until one year
after the later of the commencement of the offering and the
Closing Date, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold and, prior to the date six months after the date of
issuance of the Securities, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing
of investments (as principal or as agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations
1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services ▇▇▇ ▇▇▇▇ of the United Kingdom
with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom; and (iii) it has only
issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of
the Securities to a person who is of a kind described in Article 9(3)
ExA-1
of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
ExA-2
EXHIBIT B
[Form of Lock-Up Agreement]
February 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
ABN AMRO ROTHSCHILD LLC
FLEET SECURITIES, INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Proposed Offering by ▇▇▇ Communications, Inc.
Convertible Senior Notes due 2021
Ladies and Gentlemen:
The undersigned, a stockholder of ▇▇▇ Communications, Inc., a
Delaware corporation (the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
("▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Banc of America Securities LLC, Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ABN AMRO
Rothschild LLC, Fleet Securities, Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇ ▇▇▇▇▇
Securities Corporation (collectively, the Initial Purchasers") propose to enter
into a Purchase Agreement (the "Purchase Agreement") with the Company providing
for the offering of $685,000,000 aggregate principal amount at maturity of the
Company's Convertible Senior Notes due 2021 (the "Securities") and the grant by
the Company to the Initial Purchasers of the option to purchase additional
Securities to cover over-allotments, if any. In recognition of the benefit that
such an offering will confer upon the undersigned as a stockholder, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned agrees with the Initial Purchasers that,
for a period of 45 days following the date hereof, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, the undersigned will not
offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into
any transaction which is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
ExB-1
affiliate of the undersigned or any person in privity with the undersigned or
any affiliate of the undersigned) directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the Securities
and Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, any shares of the
Company's Class A common stock (the "Common Stock"), or any securities
convertible into or exchangeable or exercisable for or repayable with Common
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or publicly announce an intention to effect any such transaction.
The foregoing sentence shall not apply to the securities (the "CEI Securities")
subject to the Purchase Agreement, dated the date hereof, between the
undersigned and the Initial Purchasers, or the shares of Common Stock
deliverable upon exchange of the CEI Securities.
Very truly yours,
▇▇▇ ENTERPRISES, INC.
By: _________________________
Name:
Title:
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