CCH II, LLC CCH II CAPITAL CORP. PURCHASE AGREEMENT Dated January 26, 2006
Exhibit
10.3
CCH
II,
LLC
CCH
II
CAPITAL CORP.
$450,000,000
10.25%
SENIOR NOTES DUE 2010 - SERIES B
PURCHASE
AGREEMENT
Dated
January 26, 2006
January
26, 2006
X.X.
Xxxxxx Securities Inc.
As
Representative of the
several
Purchasers listed
in
Schedule I hereto
c/o
X.X.
Xxxxxx Securities Inc.
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
CCH
II,
LLC, a Delaware limited liability company (the "Company"),
and
CCH II Capital Corp., a Delaware corporation ("CCH
II
Capital"
and,
together with the Company, the "Issuers"),
propose, subject to the terms and conditions stated herein, to issue and sell
to
the purchasers named in Schedule I hereto (the "Purchasers")
an
aggregate of $450,000,000 principal amount of 10.25% Senior Notes due 2010
-
Series B (the "Notes").
The
Notes will be issued pursuant to the Indenture dated as of September 23, 2003,
as supplemented by a supplemental indenture dated January 30, 2006 (the
"Indenture")
among
the Issuers and Xxxxx Fargo Bank, National Association, as trustee (the
"Trustee").
In
this Agreement, January 30, 2006 is referred to as the "Closing
Date"
or the
"Time
of Delivery".
The
Notes will have the benefit of an exchange and registration rights agreement
(the "Exchange
and Registration Rights Agreement"),
to be
dated as of the Time of Delivery, between the Issuers and the Purchasers,
pursuant to which the Issuers will agree to offer in exchange for the Notes,
new
notes, registered under the Securities Act of 1933, as amended (the
"Act"),
but
otherwise on terms substantially identical to the Notes (such registered Notes,
the "Exchange
Notes")
under
the Act subject to the terms and conditions therein specified. To the extent
there are no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Purchasers, and the terms
Representatives and Purchasers shall mean either the singular or plural as
the
context requires. It is understood and agreed that all the representatives
are
joint book-running managers for the offering of the Notes (in such capacity,
the
"Joint
Managers").
Any
determinations or other actions to be made under this Agreement by the Joint
Managers shall only require the consent of
X.X.
Xxxxxx Securities Inc.
The
sale
of the Notes to the Purchasers will be made without registration of the Notes
under the Act in reliance upon exemptions from the registration requirements
of
the Act.
In
connection with the sale of the Notes, the Issuers have prepared a preliminary
offering memorandum dated January 24, 2006 (the "Preliminary
Offering Memorandum")
and
will prepare an offering memorandum dated the date hereof (the "Offering
Memorandum"),
it
being understood that references to the Offering Memorandum refer to the version
of such document to be prepared and delivered in connection with this agreement,
including Sections 5(a) and (c) hereof, setting forth certain information
concerning the Issuers and their subsidiaries and the Notes. Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Issuers to the Purchasers pursuant to the terms of
this Agreement. The Issuers hereby confirm that they have authorized the use
of
the Preliminary Offering Memorandum, the Time of Sale Information (as defined
below) and the Offering Memorandum in connection with the offering and resale
of
the Notes by the Purchasers in the manner contemplated by this agreement.
Capitalized terms used but not defined herein shall have the meanings given
to
such terms in the Preliminary Offering Memorandum. References herein to the
Preliminary Offering Memorandum, the Time of Sale Information and the Offering
Memorandum shall be deemed to refer to and include any document incorporated
by
reference therein.
At
or
prior to the time when sales of the Notes were first made (the "Time
of Sale"),
the
following information shall have been prepared (collectively, the "Time
of Sale Information"):
a
Preliminary Offering Memorandum dated January 24, 2006, as supplemented and
amended by the written communications listed on Annex I hereto.
This
Agreement, the Exchange and Registration Rights Agreement, the Notes and the
Indenture collectively are referred to herein as the "Transaction
Documents."
1. Representations
and Warranties of the Issuers.
Each of
the Issuers jointly and severally represents and warrants to, and agrees with,
each of the Purchasers that:
(a)
The
Preliminary Offering Memorandum, as of its date, did not, the Time of Sale
Information, at the Time of Sale, did not and at the Closing Date, will not,
and
the Offering Memorandum, in the form first used by the Purchasers to confirm
sales of the Notes, will not, and, as of the Closing Date, will not, contain
an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made
in reliance upon and in conformity with information relating to the Purchasers
furnished in writing to the Issuers by or on behalf of a Purchaser through
X.X.
Xxxxxx Securities Inc. expressly for use in the Preliminary Offering Memorandum,
the Time of Sale Information or the Offering Memorandum;
(b) Other
than the Preliminary Offering Memorandum and the Offering Memorandum, the
Issuers (including its agents and representatives, other than the Purchasers
in
their capacity as such) have not made, used, prepared, authorized, approved
or
referred to and will not prepare, make, use, authorize, approve or refer to
any
written communication that constitutes an offer to sell or solicitation of
an
offer to buy the Notes other than the documents listed
-2-
on
Annex
I hereto, including a term sheet substantially in the form of Annex II hereto,
and other written communications used in accordance with Section
5(c);
(c) None
of
the Issuers or any of their subsidiaries has sustained since the date of the
latest audited financial statements included in each of the Time of Sale
Information and the Offering Memorandum any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any court or governmental action, order or decree,
otherwise than as set forth or contemplated in each of the Time of Sale
Information and the Offering Memorandum; and, since the respective dates as
of
which information is given in each of the Time of Sale Information and the
Offering Memorandum, there has not been any change in the capital stock or
limited liability company interests or long-term debt of the Issuers or any
of
their subsidiaries or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
management, financial position, members’ or stockholders’ equity or results of
operations of Charter Communications, Inc. ("CCI"),
Charter Communications Holding Company, LLC ("CCH
LLC"),
Charter Communications Holdings, LLC ("Holdings"),
CCH I
Holdings, LLC ("CIH") and CCH I, LLC ("CCH I" and collectively with CCI, CCH
LLC, Holdings and CIH, the "Parent
Companies"),
the
Issuers and each of the Issuers’ subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in each of the Time of Sale Information and the
Offering Memorandum;
(d) Each
of
the Issuers and its subsidiaries has good and marketable title to all real
property and good and valid title to all personal property owned by it reflected
as owned in the financial statements included in each of the Time of Sale
Information and the Offering Memorandum, in each case free and clear of all
liens, encumbrances and defects except such as are described in each of the
Time
of Sale Information and the Offering Memorandum or except such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Issuers and
their subsidiaries; and any real property and buildings held under lease by
the
Issuers and their subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Issuers and their subsidiaries;
(e) The
Company has been duly formed and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware, and CCH II
Capital has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Delaware; each of the Issuers
has
power and authority to own its properties and conduct its business as described
in each of the Time of Sale Information and the Offering Memorandum and to
execute, deliver and perform its obligations under this Agreement, and has
been
duly qualified as a foreign corporation or limited liability company, as the
case may be, for the transaction of business and is in good standing under
the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; and is not subject
to
liability or disability by reason of the failure to be so qualified in any
such
jurisdiction, except such as
would
not, individually or in the aggregate, have a material adverse effect on the
current or future financial position, members’ or stockholders’ equity or
results of operations of the Parent Companies, the Issuers and the Issuers’
subsidiaries, taken as a whole (a "Material
Adverse Effect");
each
Parent Company and each of the Issuers’ subsidiaries has been
-3-
duly
incorporated or formed, as the case may be, and is validly existing as a
corporation, partnership or limited liability company, as the case may be,
in
good standing under the laws of its jurisdiction of incorporation or formation,
in each case except such as would, individually or in the aggregate, not
result
in a Material Adverse Effect. CCH II Capital has no
subsidiaries;
(f) All
the
outstanding ownership interests of the Issuers have been duly and validly
authorized and issued and are fully paid and non-assessable; and all the
outstanding capital stock, limited liability company interests or partnership
interests, as the case may be, of CCH II Capital and each "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X) of the
Company (each a "Significant
Subsidiary")
have
been duly and validly authorized and issued, are fully paid and nonassessable
and (except as otherwise set forth in each of the Time of Sale Information
and
the Offering Memorandum) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(g) This
Agreement has been duly authorized and executed by each of the
Issuers;
(h) The
Notes
have been duly authorized and, when executed by the Issuers and authenticated
by
the Trustee in accordance with the provisions of the Indenture and when
delivered to, and paid for, by the Purchasers in accordance with the terms
of
this Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Issuers entitled to the benefits provided by the Indenture under which they
are
to be issued and enforceable against the Issuers in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles;
(i) The
Indenture has been duly authorized, and when executed and delivered by the
Issuers (assuming the due execution and delivery thereof by the Trustee), will
constitute a valid and legally binding instrument, enforceable against the
Issuers in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to
or affecting creditors’ rights and to general equity principles; and at the Time
of Delivery, the Indenture will meet the requirements for qualification under
the United States Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act");
and
the Indenture conforms in all material respects to the description thereof
in
each of the Time of Sale Information and the Offering Memorandum;
(j) The
Exchange and Registration Rights Agreement to be entered into between the
Issuers and the Purchasers, substantially in the form of Exhibit A hereto,
has
been duly authorized by the Issuers and, when executed and delivered by each
Issuer party thereto in accordance with its terms and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
will
constitute the legal, valid and binding obligation of each such Issuer,
enforceable against each such Issuer in accordance with its terms except that
(i) the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to general equity principles, whether arising in a court
of equity or law, and (ii) any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations; and
-4-
the
Exchange and Registration Rights Agreement will conform in all material respects
to the description thereof in each of the Time of Sale Information and the
Offering Memorandum;
(k) The
Exchange Notes (as defined in the Exchange and Registration Rights Agreement)
have been duly authorized by the Issuers; and, when executed, authenticated,
issued and delivered in accordance with the Indenture and Exchange and
Registration Rights Agreement (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), will constitute valid and legally
binding instruments entitled to the benefits provided by the Indenture and
enforceable against the Issuers in accordance with their respective terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles; and the Exchange Notes will conform in all material
respects to the description thereof in each of the Time of Sale Information
and
the Offering Memorandum;
(l) None
of
the transactions contemplated by this Agreement (including, without limitation,
the use of the proceeds from the sale of the Notes) will violate or result
in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the Federal
Reserve System;
(m) Prior
to
the date hereof, none of the Issuers or any of their affiliates has taken any
action which is designed to or which has constituted or which might have been
expected to cause or result in stabilization or manipulation of the price of
any
security of the Issuers in connection with the offering of the
Notes;
(n) The
issuance and sale of the Notes, the issuance of the Exchange Notes and the
compliance by the Issuers with all provisions of each of the Transaction
Documents, including those described under the caption "Description of the
Notes" in the Time of Sale Information and the Offering Memorandum and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of
trust, loan agreement, lease, license, franchise agreement, permit or other
agreement or instrument to which the Issuers, the Parent Companies or any of
the
Issuers’ subsidiaries is a party or by which the Issuers, the Parent Companies
or any of the Issuers’ subsidiaries is bound or to which any of the property or
assets of the Issuers, the Parent Companies or any of the Issuers’ subsidiaries
is subject, nor will such action result in any violation of any statute or
any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Issuers, the Parent Companies or any of the Issuers’
subsidiaries or any of their properties, including, without limitation, the
Communications Act of 1934, as amended, the Cable Communications Policy Act
of
1984, as amended, the Cable Television Consumer Protection and Competition
Act
of 1992, as amended, and the Telecommunications Act of 1996 (collectively,
the
"Cable Acts") or any order, rule or regulation of the Federal Communications
Commission (the "FCC"), or the Order Instituting Cease and Desist Proceedings,
Making Findings, and Imposing a Cease and Desist Order Pursuant to Section
21C
of the Securities and Exchange Act of 1934, dated July 27, 2004, issued In
the
Matter of Charter Communications, Inc. (the "Cease and Desist Order"), except,
in each case, where such conflicts, breaches, violations or defaults would
not,
individually or in the aggregate, have a Material Adverse Effect and would
not
have the effect of preventing the Issuers
-5-
from
performing any of their respective obligations under this Agreement or any
of
the other Transaction Documents to which they are, or are to be, a party;
nor
will such action result in any violation of the certificate of formation
or
limited liability company agreement of the Company or the certificate of
incorporation or bylaws of CCH II Capital; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or
governmental agency or body is required, including, without limitation, under
the Cable Acts, any order, rule or regulation of the FCC or the Cease and
Desist
Order, for the issuance and sale of the Notes or the consummation by the
Issuers
of the transactions contemplated in this paragraph (n), except such consents,
approvals, authorizations, registrations or qualifications as have been made
or
except as may be required under state or foreign securities or Blue Sky laws
in
connection with the purchase and distribution of the Notes by the Purchasers
and
except as required under the Securities Act in connection with the transactions
contemplated by the Exchange and Registration Rights Agreement or such as
may be
required by the National Association of Securities Dealers, Inc. (the "NASD")
and except as to such matters as are covered by other paragraphs of this
Section 1;
(o) None
of
the Issuers, the Parent Companies or any of the Issuers’ subsidiaries is (i) in
violation of its certificate of incorporation, bylaws, certificate of formation,
limited liability company agreement, partnership agreement or other
organizational document, as the case may be, (ii) in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in
any indenture, mortgage, deed of trust, loan agreement, lease, license, permit
or other agreement or instrument to which it is a party or by which it or any
of
its properties may be bound or (iii) in violation of the terms of any franchise
agreement, or any law, statute, rule or regulation or any judgment, decree
or
order, in any such case, of any court or governmental or regulatory agency
or
other body having jurisdiction over the Issuers, the Parent Companies or any
of
the Issuers’ subsidiaries or any of their properties or assets, including,
without limitation, the Cable Acts or any order, rule or regulation of the
FCC
or the Cease and Desist Order, except, in the case of clauses (ii) and (iii),
such as would not, individually or in the aggregate, have a Material Adverse
Effect;
(p) The
statements set forth in each of the Time of Sale Information and the Offering
Memorandum under the caption "Description of the Notes" insofar as they purport
to constitute a summary of the terms of the Notes and under the captions "Risk
Factors," "Description of Other Indebtedness" and "United States Federal Income
Taxation of Non-U.S. Holders" insofar as they purport to describe the provisions
of the laws, documents and arrangements referred to therein, are accurate in
all
material respects and (ii) the Annual Report incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum for the Year Ended
December 31, 2004, under the captions "Item 1. Business," "Item 11. Executive
Compensation," and "Item 13. Certain Relationships and Related Transactions"
are
accurate in all material respects as of the dates set forth therein insofar
as
they purport to describe the provisions of the laws, documents and arrangements
referred to therein and to the extent not superseded by subsequent disclosure
(including documents incorporated by reference into the Time of Sale Information
and the Offering Memorandum);
(q) Other
than as set forth in each of the Time of Sale Information and the Offering
Memorandum, there are no legal or governmental proceedings (including, without
limitation, by the FCC or any franchising authority) pending to which the
Issuers, the Parent Companies or any of the Issuers’ subsidiaries is a party or
of which any property of the Issuers, the Par-
-6-
ent
Companies or any of the Issuers’ subsidiaries is the subject which, if
determined adversely with respect to the Issuers, any of the Parent Companies
or
any of the Issuers’ subsidiaries, would, individually or in the aggregate, have
a Material Adverse Effect; and, to the best knowledge of the Issuers and,
except
as disclosed in each of the Time of Sale Information and the Offering
Memorandum, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(r) Each
of
the Issuers, the Parent Companies and the Issuers’ subsidiaries carries
insurance (including, without limitation, self-insurance) in such amounts and
covering such risks as in the reasonable determination of the Issuers is
adequate for the conduct of its business and the value of its
properties;
(s) Except
as
set forth in each of the Time of Sale Information and the Offering Memorandum,
there is no strike, labor dispute, slowdown or work stoppage with the employees
of any of the Issuers or their subsidiaries which is pending or, to the best
knowledge of the Issuers, threatened which would, individually or in the
aggregate, have a Material Adverse Effect;
(t) When
the
Notes are issued and delivered pursuant to this Agreement, the Notes will not
be
of the same class (within the meaning of Rule 144A under the Securities Act
of
1933, as amended, (the "Act")) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted
in
a U.S. automated inter-dealer quotation system;
(u) Neither
Issuer is, or after giving effect to the offering and sale of the Notes will
be,
an "investment company" or any entity "controlled" by an "investment company"
as
such terms are defined in the U.S. Investment Company Act of 1940, as amended
(the "Investment Company Act");
(v) None
of
the Issuers or any of their affiliates, nor any person authorized to act on
their behalf (other than the Purchasers, as to whom the Issuers make no
representations) has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy any security, under circumstances that
would require the registration of the Notes under the Act;
(w) None
of
the Issuers or any of the Parent Companies or the Issuers’ subsidiaries, or any
person authorized to act on their behalf (other than the Purchasers, as to
whom
the Issuers make no representation) has offered or sold, the Notes by means
of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Notes sold outside the United States
to
non-U.S. persons (as defined in Rule 902 under the Act), by means of any
directed selling efforts within the meaning of Rule 902 under the Act and the
Issuers, any affiliate of the Issuers and any person authorized to act on their
behalf (other than the Purchasers, as to whom the Issuers make no
representation) has complied with and will implement the offering restriction
within the meaning of such Rule 902;
(x) Within
the preceding six months, none of the Issuers or any other person authorized
to
act on their behalf (other than the Purchasers, as to whom the Issuers make
no
representation) has offered or sold to any person any Notes, or any securities
of the same or a simi-
-7-
lar
class
as the Notes, other than Notes offered or sold to the Purchasers hereunder
and
the approximate $60 million of the Issuers’ 10.250% Senior Notes due 2010 issued
in exchange for Holdings’ 8.250% Senior Notes due 2007. The Issuers will take
reasonable precautions designed to ensure that any offer or sale, direct
or
indirect, in the United States or to any U.S. person (as defined in Rule
902
under the Act) of any Notes or any substantially similar security issued
by the
Issuers, within six months subsequent to the date on which the distribution
of
the Notes has been completed (as notified to the Issuers by X.X. Xxxxxx
Securities Inc.), is made under restrictions and other circumstances reasonably
designed not to affect the status of the offer and sale of the Notes in the
United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act;
(y) The
consolidated financial statements (including the notes thereto) included in
each
of the Time of Sale Information and the Offering Memorandum present fairly
in
all material respects the respective consolidated financial positions, results
of operations and cash flows of the entities to which they relate at the dates
and for the periods to which they relate and have been prepared in accordance
with U.S. generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as otherwise noted therein). The selected historical
financial data in each of the Time of Sale Information and the Offering
Memorandum present fairly in all material respects the information shown therein
and, except with respect to the selected historical financial data for the
calendar year ended December 31, 1999 (which has not been restated), have been
prepared and compiled on a basis consistent with the audited financial
statements included therein; and the financial information set forth in the
Preliminary Offering Memorandum and the Offering Memorandum under the heading
"Summary - Fourth quarter preliminary information" to the knowledge of the
Issuers and subject to the conditions set forth therein, present fairly in
all
material respects the information shown therein and have been prepared and
compiled on a basis consistent with the audited financial statements included
therein;
(z) The
pro
forma financial information included in each of the Time of Sale Information
and
the Offering Memorandum (i) complies as to form in all material respects with
the applicable requirements of Regulation S-X for Form S-1 promulgated under
the
Exchange Act, and (ii) has been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma financial
information included in each of the Time of Sale Information and the Offering
Memorandum are reasonable and the adjustments used therein are appropriate
to
give effect to the transactions or circumstances referred to
therein;
(aa) KPMG
LLP,
who has certified the financial statements included in each of the Time of
Sale
Information and the Offering Memorandum, is a firm of independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder, based upon representations by such firm to
us;
(bb) The
Issuers, the Parent Companies and the Issuers’ subsidiaries own or possess, or
can acquire on reasonable terms, adequate licenses, trademarks, service marks,
trade names and copyrights (collectively, "Intellectual Property") necessary
to
conduct the business now or proposed to be operated by each of them as described
in each of the Time of Sale Information and the Offering Memorandum, except
where the failure to own, possess or have the ability to acquire any
Intellectual Property would not, individually or in the aggregate, have a
Material Adverse Effect; and none of the Issuers or any of the Parent Companies
or the Issuers’ sub-
-8-
sidiaries
has received any notice of infringement of or conflict with (and none actually
knows of any such infringement of or conflict with) asserted rights of others
with respect to any Intellectual Property which, if any such assertion of
infringement or conflict were sustained would, individually or in the aggregate,
have a Material Adverse Effect;
(cc) Except
as
described in each of the Time of Sale Information and the Offering Memorandum,
the Issuers, the Parent Companies and the Issuers’ subsidiaries have obtained
all consents, approvals, orders, certificates, licenses, permits, franchises
and
other authorizations of and from, and have made all declarations and filings
with, all governmental and regulatory authorities (including, without
limitation, the FCC), all self-regulatory organizations and all courts and
other
tribunals legally necessary to own, lease, license and use their respective
properties and assets and to conduct their respective businesses in the manner
described in each of the Time of Sale Information and the Offering Memorandum,
except to the extent that the failure to so obtain or file would not,
individually or in the aggregate, have a Material Adverse Effect;
(dd) The
Issuers, the Parent Companies and the Issuers’ subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns required
to be filed as of the date hereof, except where the failure to so file such
returns would not, individually or in the aggregate, have a Material Adverse
Effect, and have paid all taxes shown as due thereon; and there is no tax
deficiency that has been asserted against the Issuers or any of their
subsidiaries (other than those which the amount or validity thereof are
currently being challenged in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant entity) that could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect;
(ee) The
Issuers, the Parent Companies and the Issuers’ subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with
the existing assets at reasonable intervals and appropriate action is taken
with
respect to any differences;
(ff) Except
as
described in each of the Time of Sale Information and the Offering Memorandum:
(i) each of the franchises held by, or necessary for any operations of, the
Issuers and their subsidiaries that are material to the Issuers and their
subsidiaries, taken as a whole, is in full force and effect, with no material
restrictions or qualifications; (ii) to the best knowledge of the Issuers,
no
event has occurred which permits, or with notice or lapse of time or both .would
permit, the revocation or non-renewal of any such franchises, assuming the
filing of timely renewal applications and the timely payment of all applicable
filing and regulatory fees to the applicable franchising authority, or which
would be reasonably likely to result, individually or in the aggregate, in
any
other material impairment of the rights of the Issuers and the Issuers’
subsidiaries in such franchises; and (iii) the Issuers have no reason to believe
that any franchise that is material to the operation of the Issuers and their
subsidiaries will not be renewed;
-9-
(gg) Each
of
the programming agreements entered into by, or necessary for any operations
of,
the Issuers, their Parent Companies or their subsidiaries that are material
to
the Issuers and their subsidiaries, taken as a whole, is in full force and
effect (or in any cases where the Issuers or their subsidiaries and any
suppliers of content are operating in the absence of an agreement, such content
providers and the Issuers and their subsidiaries provide and receive service
in
accordance with terms that have been agreed to or consistently acknowledged
or
accepted by both parties, including, without limitation, situations in which
providers or suppliers of content accept regular payment for the provision
of
such content); and to the best knowledge of the Issuers, no event has occurred
(or with notice of lapse of time or both would occur) which would be reasonably
likely to result in the early termination or non-renewal of any such programming
agreements and which would, individually or in the aggregate, result in a
Material Adverse Effect; no amendments or other changes to such programming
agreements, other than amendments relating to intra-company transfers,
extensions of termination dates or pricing adjustments, together with other
changes that are not in the aggregate material, have been made to the copies
of
the programming agreements provided for the review of the Purchasers or their
representatives;
(hh) The
Issuers, the Parent Companies and the Issuers’ subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses
or
other approvals required of ‘them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to. comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, have a Material Adverse Effect;
(ii) Immediately
after the consummation of this offering (including after giving effect to the
execution, delivery and performance of this Agreement and the Indenture and
the
issuance and sale of the Notes), (i) the fair market value of the assets of
each
of Holdings, CIH, CCH I, LLC, CCO Holdings, LLC, Charter Communications
Operating, LLC and the Company, each on a consolidated basis with its
subsidiaries, exceeds and will exceed its liabilities, on a consolidated basis
with its subsidiaries; (ii) the present fair saleable value of the assets of
each of Holdings, CIH, CCH I, LLC, CCO Holdings, LLC and the Company, each
on a
consolidated basis with its subsidiaries, exceeds and will exceed its
liabilities, on a consolidated basis with its subsidiaries; (iii) each of
Holdings, CIH, CCH I, LLC, CCO Holdings, LLC, Charter Communications Operating,
LLC and the Company, each on a consolidated basis with its subsidiaries, is
and
will be able to pay its debts, on a consolidated basis with its subsidiaries,
as
such debts respectively mature or otherwise become absolute or due; and (iv)
each of Holdings, CIH, CCH I, LLC, CCO Holdings, LLC, Charter Communications
Operating, LLC and the Company, on a consolidated basis with its subsidiaries,
does not have and will not have unreasonably small capital with which to conduct
its respective operations;
(jj) The
Issuers and their Parent Companies each maintain a system of disclosure controls
and procedures to ensure that material information relating to the Issuers
and
their Parent Companies and their consolidated subsidiaries, is made known to
each of them by others
-10-
within
those entities, particularly during the period in which the periodic reports
are
being prepared;
(kk) There
is,
and has been, no failure on the part of the Issuers, the Parent Companies or
the
Issuers’ subsidiaries, or any of their directors or officers, in their
capacities as such, to comply with any provision of the Sarbanes Oxley Act
of
2002 and the rules and regulations promulgated in connection therewith,
including, without limitation, Section 402 related to loans and Sections 302
and
906 related to certifications;
(ll) The
statistical and market-related data that will be included in the Offering
Memorandum are based on or derived from sources that the Issuers believe to
be
reliable and accurate; and
(mm) Each
of
the relationships and transactions specified in Item 404 of Regulation S-K
that
would have been required to be described in a Form 10-K have been so described
in each of the Time of Sale Information and the Offering Memorandum (exclusive
of any amendment or supplement thereto).
2. Purchase
and Sale.
(a) Subject
to the terms and conditions herein set forth, the Issuers agree to issue and
sell to each of the Purchasers, and each of the Purchasers agrees, severally
and
not jointly, to purchase from the Issuers the principal amount of the 2010
Notes
set forth opposite the name of such Purchaser on Schedule I hereto at an
aggregate purchase price of 96.039% of the principal amount thereof, plus
accrued interest on such principal amount from and including September 15,
2005,
to but not including the Closing Date.
(b) The
Issuers acknowledge and agree that the Purchasers are acting solely in the
capacity of an arm's length contractual counterparty to the Issuers with respect
to the offering of Notes contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Issuers or any other person. Additionally,
no
Purchaser is advising the Issuers or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Issuers
shall consult with their own advisors concerning such matters and shall be
responsible for making their own independent investigation and appraisal of
the
transactions contemplated hereby, and the Purchasers shall have no
responsibility or liability to the Issuers with respect thereto. Any review
by
the Purchasers of the Issuers, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of the Purchasers and shall not be on behalf of the Issuers.
3. Representations,
Warranties and Covenants of the Purchasers.
Upon
the authorization by you of the release of the Notes, the several Purchasers
propose to offer the Notes for sale upon the terms and conditions set forth
in
this Agreement and the Time of Sale Information and each Purchaser, severally
and not jointly, hereby represents and warrants to, and agrees with the Issuers
that:
(a) It
will
offer and sell the Notes only: (i) to persons who it reasonably believes are
"qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under
the
-11-
Act
in
transactions meeting the requirements of Rule 144A or (ii) upon the terms
and
conditions set forth in Annex III to this Agreement;
(b) It
is an
institutional "accredited investor" within the meaning of Regulation D under
the
Act; and
(c) It
has
not offered and will not offer or sell the Notes by any form of general
solicitation or general advertising, including, without limitation, the methods
described in Rule 502(c) under the Act.
4. Delivery
and Payment.
(a) The
Notes
to be purchased by each Purchaser hereunder will be represented by definitive
global Notes in book-entry form which will be deposited by or on behalf of
the
Issuers with The Depository Trust Company ("DTC")
or its
designated custodian. The Issuers will deliver the Notes to X.X. Xxxxxx
Securities Inc., for the account of each Purchaser, against payment by or on
behalf of such Purchaser of the purchase price therefor by wire transfer of
same
day funds wired in accordance with the written instructions of the Company,
by
causing DTC to credit the Notes to the account of X.X. Xxxxxx Securities Inc.
at
DTC. The Issuers will cause the certificates representing the Notes to be made
available to X.X. Xxxxxx Securities Inc. for checking at least twenty-four
hours
prior to the Time of Delivery at the office of DTC or its designated custodian
(the "Designated
Office").
The
time and date of such delivery and payment shall be 9:30 a.m., New York City
time, on January 30, 2006 or such other time and date as X.X. Xxxxxx Securities
Inc. and the Issuers may agree upon in writing. Such time and date are herein
called the "Time of Delivery."
(b) The
documents to be delivered at the Time of Delivery by or on behalf of the parties
hereto pursuant to Section 8 hereof, including, without limitation, the
cross-receipt for the Notes and any additional documents requested by the
Purchasers pursuant to Section 8(j) hereof, will be delivered at such time
and
date at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or such other location as the parties mutually agree (the
"Closing
Location"),
and
the Notes will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 6 p.m., New York
City time, on the New York Business Day next preceding the Time of Delivery,
at
which meeting the final drafts of the documents to be delivered pursuant to
the
preceding sentence will be available for review by the parties hereto. For
the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. Agreements
of the Issuers.
Each of
the Issuers agrees with each of the Purchasers:
(a) To
prepare each of the Time of Sale Information and the Offering Memorandum in
a
form approved by you; to make no amendment or any supplement to any of the
Time
of Sale Information or the Offering Memorandum which shall not be approved
by
you promptly after reasonable notice thereof; and to furnish you with copies
thereof;
-12-
(b) Promptly
from time to time to take such action as you may reasonably request to qualify
the Notes for offering and sale under the securities laws of such jurisdictions
as you may request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Notes; provided that in connection
therewith the Issuers shall not be required to qualify as a foreign corporation
or limited liability company, as the case may be, or to file a general consent
to service of process in any jurisdiction;
(c) To
furnish the Purchasers with copies of the Preliminary Offering Memorandum,
any
other Time of Sale Information and the Offering Memorandum and each amendment
or
supplement thereto signed by an authorized officer of each of the Issuers with
the independent accountants’ reports in each of the Time of Sale Information and
the Offering Memorandum, and any amendment or supplement containing amendments
to the financial statements covered by such reports, signed by the accountants,
and additional copies thereof in, such quantities as you may from time to time
reasonably request, and (1) if, at any time prior to the expiration of nine
months after the date of the Offering Memorandum, any event shall have occurred
as a result of which the Offering Memorandum as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made when such Offering Memorandum
is
delivered, not misleading, or, if for any other reason it shall be necessary
or
desirable during such same period to amend or supplement the Offering
Memorandum, to notify you and upon your request to prepare and furnish without
charge to each Purchaser and to any dealer in securities as many copies as
you
may from time to time reasonably request of an amended Offering Memorandum
or a
supplement to the Offering Memorandum which will correct such statement or
omission or effect such compliance and (2) if at any time prior to the Closing
Date (i) any event shall occur or condition shall exist as a result of which
any
of the Time of Sale Information as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) it is necessary
to amend or supplement any of the Time of Sale Information so that any of the
Time of Sale Information will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, to immediately notify you thereof and forthwith prepare
and, subject to paragraph (a) above, furnish without charge to each Purchaser
such amendments or supplements to any of the Time of Sale Information as may
be
necessary so that the statements in any of the Time of Sale Information as
so
amended or supplemented will not, in the light of the circumstances under which
they were made, be misleading;
(d) Before
using, authorizing, approving or referring to any written communication that
constitutes an offer to sell or a solicitation of an offer to buy the Notes
(an
"Issuer
Written Communication")
(other
than written communications that are listed on Annex I hereto and the Offering
Memorandum), to furnish to the Representative and counsel for the Purchasers
a
copy of such written communication for review and to not use, authorize, approve
or refer to any such written communication to which the Representative
reasonably objects.
(e) During
the period beginning from the date hereof and continuing until the date 90
days
after the Time of Delivery, not to, and not permit any of its affiliates or
anyone au-
-13-
thorized
to act on behalf of the Issuers or their affiliates to, without the prior
written consent of X.X. Xxxxxx Securities Inc., offer, sell, contract to
sell or
otherwise dispose of, except as provided hereunder, any securities of the
Issuers that are substantially similar to the Notes other than as provided
in
the Exchange and Registration Rights Agreement and for private exchanges
of the
Issuers’ 10.250% Senior Notes due 2010 for Holdings’ 8.750% Senior Notes due
2007.
(f) Not
to be
or become, at any time prior to the expiration of two years after the Time
of
Delivery, an open-end investment company, unit investment trust, closed-end
investment company or face-amount certificate company that is or is required
to
be registered under Section 8 of the Investment Company Act;
(g) If
such
documents are not then available on the Commission’s XXXXX Database, during a
period of three years from the date of the Offering Memorandum, to furnish
or
make electronically available to you, copies of all reports or other
communications (financial or other) furnished generally to holders of a publicly
traded class of ownership interests of the Issuers or CCI, and to furnish or
make electronically available to you, as soon as they are available, of any
reports and financial statements furnished to or filed with the Commission
or
any securities exchange on which the Notes or any class of securities of the
Issuers or CCI is listed;
(h) During
the period of two years after the Time of Delivery, to not, and to not permit
any of their "affiliates" (as defined in Rule 144 under the Act) to, resell
any
of the Notes which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them;
(i) To
use
the net proceeds received from the sale of the Notes pursuant to this Agreement
in the manner specified in each of the Time of Sale Information and the Offering
Memorandum under the caption "Use of Proceeds";
(j) To
not,
and to not permit any affiliate nor any person authorized to act on its behalf
(other than the Purchasers, as to whom the Issuers take no responsibility)
to
engage in any directed selling efforts with respect to the Notes in
contravention of, and to comply with, the applicable offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S;.
(k) To
not
and to not permit any affiliate nor any person authorized to act on its behalf
(other than the Purchasers, as to whom the Issuers take no responsibility)
to,
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 Notes under the Act, except pursuant to the Exchange and Registration Rights
Agreement;
(l) To
not
and to not permit any affiliate nor any person authorized to act on its behalf
(other than the Purchasers, as to whom the Issuers take no responsibility)
to,
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 Notes
in
the United States;
(m) Except
as
otherwise permitted by Regulation M under the Exchange Act, to not and to not
permit any affiliate nor any person authorized to act on its behalf to, take,
directly or indirectly, any action designed to or which has constituted or
which
would reasonably
-14-
be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Issuers
to
facilitate the sale or resale of the Notes; and
(n) To
use
their best efforts prior to the Time of Delivery to cause the Notes to be
eligible for the PORTAL trading system of the NASD.
6. Agreement
to Pay Certain Fees.
Each of
the Issuers covenants and agrees with the several Purchasers that the Issuers
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Issuers’ counsel and accountants in connection with the issue of
the Notes and all other expenses in connection with the preparation, printing
and filing of each of the Time of Sale Information and the Offering Memorandum
and any amendments and supplements thereto and the mailing and delivering of
copies thereof to the Purchasers and dealers; (ii) the cost of printing or
producing any Agreement among Purchasers, this Agreement, the Indenture, the
Notes, the Blue Sky and Legal Investment Memoranda, closing documents
(including, without limitation, any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Notes; (iii) all expenses in connection with the qualification of the Notes
for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including, without limitation, the fees and disbursements of counsel
for
the Purchasers in connection with such qualification and in connection with
the
Blue Sky and Legal Investment surveys; (iv) any fees charged by securities
rating services for rating the Notes; (v) the cost of preparing the Notes;
(vi)
the fees and expenses of the Trustee and any agent of the Trustee and the fees
and disbursements of counsel for the Trustee in connection with the Indenture
and the Notes; (vii) any cost incurred in connection with the designation of
the
Notes for trading in PORTAL; and (viii) all other costs and expenses incident
to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section 6 and Sections 9 and 12 hereof; the
Purchasers will pay all their own costs and expenses, including, without
limitation, the fees of their counsel, transfer taxes on resale of any of the
Notes by them, and any advertising expenses connected with any offers they
may
make.
7. Agreements
of the Purchasers.
Each
Purchaser hereby represents and agrees that it has not and will not use,
authorize use of, refer to, or participate in the planning for use of, any
written communication that constitutes an offer to sell or the solicitation
of
an offer to buy the Notes other than (i) a written communication that contains
no "issuer information" (as defined in Rule 433(h)(2) under the Securities
Act)
that was not included (including through incorporation by reference) in the
Preliminary Offering Memorandum, (ii) any written communication listed on Annex
I or prepared pursuant to Section 5(c) above, (iii) any written communication
prepared by such Purchaser and approved by the Issuers in advance in writing
or
(iv) any written communication relating to or that contains the terms of the
Notes and/or other information that was included (including through
incorporation by reference) in the Preliminary Offering Memorandum.
8. Conditions
to the Obligations of the Purchasers.
The
obligations of the Purchasers hereunder shall be subject, in their discretion,
to the condition that all representations and warranties and other statements
of
the Issuers herein are, at and as of the date hereof and the Time of Delivery,
true and correct, the condition that the Issuers shall have performed all their
obligations hereunder theretofore to be performed, and the following additional
conditions:
-15-
(a) The
Purchasers shall have received from Xxxxxx Xxxxxx & Xxxxxxx LLP,
counsel
for the Purchasers, such opinion or opinions, dated the Time of Delivery and
addressed to the Purchasers, with respect to the issuance and sale of the Notes
and the Indenture and other related matters as the Purchasers may reasonably
require, and the Issuers shall have furnished to such counsel such documents
as
they request for the purpose of enabling them to pass upon such
matters.
(b) Xxxxxx,
Xxxx & Xxxxxxxx LLP, counsel for the Issuers, shall have furnished to you
their written opinions, dated the Time of Delivery, substantially in the form
of
Exhibit B hereto.
(c) Xxxx,
Raywid & Xxxxxxxxx, L.L.P., special regulatory counsel to the Issuers, shall
have furnished to you their written opinion, dated the Time of Delivery,
substantially in
the
form of Exhibit C hereto.
(d) Xxxxx
Xxxxxx, Esq., General Counsel of the Company, shall have furnished to you his
written opinion, dated as of the Time of Delivery, substantially in the form
of
Exhibit D hereto.
(e) On
the
date of this agreement and on the Closing Date, KPMG LLP shall have furnished
to
you, at the request of the Company, letters, dated the respective dates of
delivery thereof and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to you, containing statements and information of the
type customarily included in accountants’ "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
or incorporated by reference in each of the Time of Sale Information and the
Offering Memorandum; provided that the letter delivered on the Closing Date
shall use a "cut-off" date no more than three business days prior to the Closing
Date;
(f) (i)
None
of the Issuers, any of the Parent Companies or any of the Issuers’ subsidiaries
shall have sustained since the date of the latest audited financial statements
included in each of the Time of Sale Information and the Offering Memorandum
any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any court or governmental
action, order or decree, otherwise than as set forth or contemplated in each
of
the Time of Sale Information and the Offering Memorandum, and (ii) since the
respective dates as of which information is given in each of the Time of Sale
Information and the Offering Memorandum (for clarification purposes, this
excludes any amendment or supplement to the Offering Memorandum on or after
the
date of this Agreement) there shall not have been any change in the capital
stock, limited liability company interests, partnership interests or long-term
debt of the Issuers or any of their subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders’ or members’ equity, or results of
operations of the Issuers and their subsidiaries, otherwise than as set forth
or
contemplated in each of the Time of Sale Information and the Offering
Memorandum, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of a majority in interest of the Purchasers so material
and adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes on the terms and in the manner
contemplated in this Agreement, the Time of Sale Information and the Offering
Memorandum;
-16-
(g) Subsequent
to the execution and delivery of this Agreement, (i) no downgrading shall have
occurred in the rating accorded the Notes or any other debt securities or
preferred stock issued or guaranteed by the Issuers by any "nationally
recognized statistical rating organization," as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act; and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, or has changed its outlook with respect to, its rating of the Notes
or
of any other debt securities or preferred stock issued or guaranteed by the
Issuers (other than an announcement with positive implications of a possible
upgrading or an announcement which reaffirms, reiterates or restates the
substance of any announcement made prior to the date hereof);
(h) On
or
after the date hereof there shall not have occurred any of the following: (i)
a
suspension or material limitation in trading in securities generally on the
New
York Stock Exchange or on the Nasdaq National Market; (ii) a suspension or
material limitation in trading in CCI’s Class A common stock on the Nasdaq
National Market, (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities or the declaration of a national emergency or
war
or the occurrence of any other calamity or crisis, if the effect of any such
event specified in this clause (iv) in the judgment of the Purchasers makes
it
impracticable or inadvisable to proceed with the offering, sale or delivery
of
the Notes on the terms and in the manner contemplated in each of the Time of
Sale Information and the Offering Memorandum;
(i) The
Notes
shall have been designated for trading on PORTAL and shall be eligible for
clearance and settlement through DTC; and
(j) The
Issuers shall have furnished or caused to be furnished to you at the Time of
Delivery certificates of officers of each Issuer satisfactory to you as to
the
accuracy of the representations and warranties of the Issuers herein at and
as
of such Time of Delivery, as to the performance by the Issuers of all their
obligations hereunder to be performed at or prior to such Time of Delivery,
as
to the matters set forth in subsections (g) and (h) of this Section 8 and as
to
such other matters as you may reasonably request.
9. Indemnification
and Contribution.
(a) Indemnification
of the Purchasers.
The
Issuers jointly and severally agree to indemnify and hold harmless each
Purchaser, its affiliates, directors and officers and each person, if any,
who
controls such Purchaser within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages
and
liabilities (including, without limitation, reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any
claim
asserted, as such fees and expenses are incurred), joint or several, that arise
out of, or are based upon, any untrue statement or alleged untrue statement
of a
material fact contained in the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication or the Offering Memorandum
(or any amendment or supplement thereto) or any omission or alleged omission
to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
in
each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relat-
-17-
ing
to
any Purchaser furnished to the Issuers in writing by such Purchaser through
X.X.
Xxxxxx Securities Inc. expressly for use therein; provided, however, that
the
foregoing indemnity agreement with respect to the Preliminary Offering
Memorandum shall not inure to the benefit of any Purchaser from whom the
person
asserting any such losses, claims, damages or liabilities purchased Notes,
or
any person controlling such Purchaser where it shall have been determined
by a
court of competent jurisdiction by final and nonappealable judgment that
(i)
prior to the Time of Sale, the Issuers shall have notified such Purchaser
that
the Preliminary Offering Memorandum contains an untrue statement of material
fact or omits to state therein a material fact required to be stated therein
in
order to make the statements therein not misleading, (ii) such untrue statement
or omission of a material fact was corrected in an amended or supplemented
Preliminary Offering Memorandum or, where permitted by law, an Issuer Written
Communication and such corrected Preliminary Offering Memorandum or Issuer
Written Communication was provided to such Purchaser far enough in advance
of
the Time of Sale so that such corrected Preliminary Offering Memorandum or
Issuer Written Communication could have been provided to such person prior
to
the Time of Sale, (iii) the Purchaser did not send or give such corrected
Preliminary Offering Memorandum or Issuer Written Communication to such person
at or prior to the Time of Sale of the Notes to such person, and (iv) such
loss,
claim, damage or liability would not have occurred had the Purchaser delivered
the corrected Preliminary Offering Memorandum or Issuer Written Communication
to
such person.
(b) Indemnification
of the Issuers.
Each
Purchaser agrees, severally and not jointly, to indemnify and hold harmless
each
Issuer, its affiliates, officers, directors, employees, members, managers and
agents, and each person, if any, who controls an Issuer within the meaning
of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent
as
the indemnity set forth in paragraph (a) above, but only with respect to any
losses, claims, damages or liabilities that arise out of, or are based upon,
any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Purchaser
furnished to the Issuers in writing by such Purchaser through X.X. Xxxxxx
Securities Inc. expressly for use in the Preliminary Offering Memorandum (the
"Purchaser Information"), any other Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum (or any amendment or supplement
thereto), it being understood and agreed that the only such information consists
of the following: the paragraph related to over-allotment, covering and
stabilization transactions under the heading "Plan of distribution;" provided,
however, that the foregoing indemnity agreement with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of either Issuer from whom
the person asserting any such losses, claims, damages or liabilities purchased
Notes, or any person controlling either Issuer where it shall have been
determined by a court of competent jurisdiction by final and nonappealable
judgment that (i) prior to the Time of Sale, the Purchasers shall have notified
either Issuer that the Purchaser Information in the Preliminary Offering
Memorandum contains an untrue statement of material fact or omits to state
therein a material fact required to be stated therein in order to make the
statements therein not misleading, (ii) such untrue statement or omission of
a
material fact was corrected in an amended or supplemented Preliminary Offering
Memorandum or, where permitted by law, an Issuer Written Communication and
such
corrected Preliminary Offering Memorandum
-18-
or
Issuer
Written Communication was provided to such Purchaser far enough in advance
of
the Time of Sale so that such corrected Preliminary Offering Memorandum or
Issuer Written Communication could have been provided to such person prior
to
the Time of Sale, (iii) the Purchaser did not send or give such corrected
Preliminary Offering Memorandum or Issuer Written Communication to such person
at or prior to the Time of Sale of the Notes to such person, and (iv) such
loss,
claim, damage or liability would not have occurred had the Purchaser delivered
the corrected Preliminary Offering Memorandum or Issuer Written Communication
to
such person.
(c) Notice
and Procedures.
If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such person (the "Indemnified
Person")
shall
promptly notify the person against whom such indemnification may be sought
(the
"Indemnifying
Person")
in
writing; provided that the failure to notify the Indemnifying Person shall
not
relieve it from any liability that it may have under this Section 9 except
to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that
the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 9. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 9 that the Indemnifying Person
may
designate in such proceeding and shall pay the reasonable fees and expenses
of
such counsel related to such proceeding, as incurred. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but
the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall
have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it which if raised in a proceeding involving
both parties would be inappropriate under applicable legal or ethical standards
due to actual or potential differing interests between it and the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate under applicable legal or ethical standards due to actual or
potential differing interests between them. It is understood and agreed that
the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of
more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such reasonable fees and expenses shall be reimbursed
as
they are incurred. Any such separate firm for any Purchaser, its affiliates,
directors and officers and any control persons of such Purchaser shall be
designated in writing by X.X. Xxxxxx Securities Inc. and any such separate
firm
for the Issuers and any control persons of the Issuers shall be designated
in
writing by the Issuers. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
not
subject to further appeal, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability provided for in such
settlement or judgment. No Indemnifying Person shall, without the written
consent of the Indemnified Person (which shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnification
could have been sought hereunder by such Indemnified Person, unless such
settlement (x) includes an unconditional release of such Indemnified Person,
in
form and
-19-
substance
reasonably satisfactory to such Indemnified Person, from all liability on
claims
that are the subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to act
by or
on behalf of such Indemnified Person.
(d) Contribution.
If the
indemnification provided for in paragraphs (a) and (b) above is unavailable
to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuers on the
one
hand and the Purchasers on the other from the offering of the Notes or (ii)
if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Issuers on the
one
hand and the Purchasers on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well
as any other relevant equitable considerations. The relative benefits received
by the Issuers on the one hand and the Purchasers on the other shall be deemed
to be in the same respective proportions as the net proceeds (before deducting
expenses) received by the Issuers from the sale of the Notes and the total
discounts and commissions received by the Purchasers in connection therewith,
as
provided in this Agreement, bear to the aggregate offering price of the Notes.
The relative fault of the Issuers on the one hand and the Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuers
or by the Purchasers and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) Limitation
on Liability.
The
Issuers and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Purchasers were treated as one entity for such purpose) or by
any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable
by
an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim. Notwithstanding
the provisions of this Section 9, in no event shall a Purchaser be required
to
contribute any amount in excess of the amount by which the total discounts
and
commissions received by such Purchaser with respect to the offering of the
Notes
exceeds the amount of any damages that such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from
any person who was not guilty of such fraudulent misrepresentation. The
Purchasers’ obligations to contribute pursuant to this Section 9 are several in
proportion to their respective purchase obligations hereunder and not
joint.
(f) Non-Exclusive
Remedies.
The
remedies provided for in this Section 9 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any Indemnified Person
at law or in equity.
-20-
10. Default
by a Purchaser.
(a) If
any
Purchaser shall default in its obligation to purchase the Notes which it has
agreed to purchase hereunder, you may in your discretion arrange for you or
another party or other parties to purchase such Notes on the terms contained
herein. If within thirty-six hours after such default by any Purchaser you
do
not arrange for the purchase of such Notes, then the Issuers shall be entitled
to a further period of thirty-six hours within which to procure another party
or
other parties satisfactory to you to purchase such Notes on such terms. In
the
event that, within the respective prescribed periods, you notify the
Issuers.
that
you
have so arranged for the purchase of such Notes, or the Issuers notify you
that
they have so arranged for the purchase of such Notes, you or the Issuers shall
have the right to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary
in
the Time of Sale Information, the Offering Memorandum, or in any other documents
or arrangements, and the Issuers agree to prepare promptly any amendments to
the
Time of Sale Information or the Offering Memorandum which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Notes.
(b) If,
after
giving effect to any arrangements for the purchase of the Notes of a defaulting
Purchaser or Purchasers by you and the Issuers as provided in subsection (a)
above, the aggregate principal amount of such Notes which remains unpurchased
does not exceed one-tenth of the aggregate principal amount of all the Notes,
then the Issuers shall have the right to require each non-defaulting Purchaser
to purchase the principal amount of Notes which such Purchaser agreed to
purchase hereunder and, in addition, to require each non-defaulting Purchaser
to
purchase its pro rata share (based on the principal amount of Notes which such
Purchaser agreed to purchase hereunder) of the Notes of such defaulting
Purchaser or Purchasers for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
(c) If,
after
giving effect to any arrangements for the purchase of the Notes of a defaulting
Purchaser or Purchasers by you and the Issuers as provided in subsection (a)
above, the aggregate principal amount of Notes which remains unpurchased exceeds
one-tenth of the aggregate principal amount of all the Notes, or if the Issuers
shall not exercise the right described in subsection (b) above to require
non-defaulting Purchasers to purchase Notes of a defaulting Purchaser or
Purchasers, then this Agreement shall thereupon terminate, without liability
on
the part of any non-defaulting Purchaser or the Issuers, except for the expenses
to be borne by the Issuers and the Purchasers as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 9 hereof; but nothing
herein shall relieve a defaulting Purchaser from liability for its
default.
11. Representations
and Indemnities to Survive.
The
respective indemnities, agreements, representations, warranties and other
statements of the Issuers and the several Purchasers, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to
the
results thereof) made by or on behalf of any Purchaser or any controlling
per-
-21-
son
of
any Purchaser, or the Issuers, or any officer or director or controlling
person
of the Issuers, and shall survive delivery of and payment for the
Notes.
12. Termination.
If this
Agreement shall be terminated pursuant to Section 10 hereof, the Issuers shall
then not be under any liability to any Purchaser except as provided in Sections
6 and 9 hereof; but, if for any other reason other than a termination pursuant
to clauses (i), (iii) or (iv) of Section 8(h), the Notes are not delivered
by or
on behalf of the Issuers as provided herein, the Issuers will reimburse the
Purchasers through you for all out-of-pocket expenses approved in writing by
you, including, fees and disbursements of counsel, reasonably incurred by the
Purchasers in making preparations for the purchase, sale and delivery of the
Notes, but the Issuers shall then be under no further liability to any Purchaser
except as provided in Sections 6 and 9 hereof.
13. Reliance
and Notices.
In all
dealings hereunder, you shall act on behalf of each of the Purchasers, and
the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Purchaser made or given by you jointly
or
by X.X. Xxxxxx Securities Inc. on behalf of you as Purchasers.
All
statements, requests, notices and agreements hereunder shall be in writing,
and
if to the Purchasers (or any of them) shall be delivered or sent by mail, telex
or facsimile transmission to you as Purchasers (or a Purchaser) to X.X. Xxxxxx
Securities Inc. Attn: Xxxxx Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
fax: (000) 000-0000, and if to the Issuers shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Issuers set forth in
the
Offering Memorandum, Attention: Secretary and General Counsel. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. Successors.
This
Agreement shall be binding upon, and inure solely to the benefit of, the
Purchasers, the Issuers, and, to the extent provided in Sections 9 and 11
hereof, the officers and directors of the Issuers and the Purchasers and each
person who controls the Issuers or any Purchaser, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of
any of the Notes from any Purchaser shall be deemed a successor or assign by
reason merely of such purchase.
15. Timeliness.
Time
shall be of the essence in this Agreement.
16. Applicable
Law.
This
Agreement shall be governed by and construed in.
accordance
with the laws of the State of New York.
17. Counterparts.
This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same
instrument.
-22-
If
the
foregoing is in accordance with your understanding, please sign and return
to us
counterparts hereof, and upon the acceptance hereof by you, on behalf of each
of
the Purchasers, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Purchasers and the Issuers. It is
understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Issuers for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
Very
truly yours,
CCH
II,
LLC
By: /s/Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: SVP
Treasury and Finance
CCH
II
CAPITAL CORP.
By: /s/Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: SVP
Treasury and Finance
Accepted
as of the date hereof
X.X.
XXXXXX SECURITIES INC.
For
itself and on behalf of the several Purchasers named in Schedule I
hereto.
By: /s/
Xxxxx X. Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: Managing
Director
SCHEDULE
I
|
Purchasers
|
Principal
Amount of
Notes
to be Purchased
|
|
X.X.
Xxxxxx Securities Inc.
|
US
$174,375,000
|
|
Credit
Suisse Securities (USA) LLC
|
174,375,000
|
|
Deutsche
Bank Securities Inc.
|
101,250,000
|
|
Total
|
US
$450,000,000
|
ANNEX
I
Time
of Sale Information
1. Term
sheets containing the terms of the Notes, substantially in the forms in
Annex II.
ANNEX
II
ANNEX
III
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 Purchaser represents and agrees
that,
except as otherwise permitted under Section 3(a)(i) of the Agreement to which
this is an annex, 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 40 days after the later of the commencement of the offering
and
the Time of Delivery, only in accordance with Rule 903 of Regulation S under
the
Act. Accordingly, each 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 Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant
to
Section 3(a)(i) of the Agreement to which this is an annex), 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, as amended (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 40 days after the later of the commencement of the offering
and
August 17, 2005, 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
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
Purchaser represents and agrees that:
(a) It
has
only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and Markets
Act 2000 ("FSMA"))
received by it in connection with the issue or sale of any Securities or
Exchange Notes in circumstances in which section 21(1) of the FSMA does not
apply to the Company.
(b) It
has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Securities or Exchange Notes in,
from
or otherwise involving the United Kingdom.
(3) Each
Purchaser agrees that it will not offer, sell or deliver any of the Securities
in any jurisdiction outside the United States except under circumstances that
will result in compliance with the applicable laws thereof, and that it will
take at its own expense whatever action is required to permit its purchase
and
resale of the Securities in such jurisdictions. Each Purchaser understands
that
no action has been taken to permit a public offering in any jurisdiction outside
the United States where action would be required for such purpose. Each
Purchaser agrees not to cause any advertisement of the Securities to be
published in any newspaper or periodical or posted in any public place and
not
to issue any circular relating to the Securities, except in any such case with
the express written consent of X.X. Xxxxxx Securities Inc. and then only at
such
Purchaser’s own risk and expense.
-2-
Exhibit
A
[Form
of
Exchange and Registration Rights Agreement]
Exhibit
B
[Form
of
Xxxxxx, Xxxx & Xxxxxxxx LLP Opinion]
Exhibit
C
[Form
of
Xxxx, Raywid & Xxxxxxxxx LLP Opinion]
Exhibit
D
[Form
of
Raclin Opinion]
