EXHIBIT 4.4
ACN Holdings, LLC
(to be renamed Muzak Holdings LLC)
Muzak Holdings Finance Corp.
$39,996,375 Gross Proceeds
13% Senior Discount Notes due 2010
PURCHASE AGREEMENT
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March 12, 1999
CIBC OPPENHEIMER CORP.
XXXXXXX, XXXXX & CO.
c/o CIBC Xxxxxxxxxxx Corp.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ACN Holdings, LLC, a Delaware limited liability company ("Holdings"), Muzak
Holdings Finance Corp., a Delaware Corporation, and a wholly-owned subsidiary of
Holdings ("Holdings Finance Corp." and, together with Holdings, the "Issuers"),
hereby confirm their agreement with you (the "Initial Purchasers"), as set forth
below.
1. The Transactions. Subject to the terms and conditions herein
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contained, the Issuers propose to issue and sell to the Initial Purchasers
$75,000,000 aggregate principal amount at maturity of their 13% Senior Discount
Notes due 2010 (the "Notes"). The Notes are to be issued pursuant to the
Indenture (the "Indenture"), to be dated March 12, 1999, among the Issuers and
State Street Bank and Trust Company, a Massachusetts banking corporation, as
trustee (the "Trustee").
The sale of the Notes to the Initial Purchasers (the "Offering") will be
made without registration of the Notes under the Securities Act of 1933, as
amended together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the "Securities
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Act"), in reliance upon the exemption therefrom provided by Section 4(2) of the
Securities Act.
In connection with the sale of the Notes, Holdings has prepared a
preliminary offering memorandum dated February 25, 1999 (the "Preliminary
Memorandum") and a final offering memorandum dated the date hereof (the "Final
Memorandum"), each setting forth or including a description of the terms of the
Notes, the terms of the Offering, the other Transactions (as defined herein) and
the transactions contemplated thereby and hereby, a description of the Issuers,
Audio Communications Network, LLC, a Delaware limited liability company, and a
wholly-owned subsidiary of Holdings (the "Company"), and Old Muzak (as defined
herein) and any material developments relating to the Issuers, the Company and
Old Muzak occurring after the date of the most recent financial statements
included therein.
The Issuers understand that the Initial Purchasers propose to make an
offering of the Notes only on the terms and in the manner set forth in the Final
Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable
after this Agreement has been executed and delivered, to persons in the United
States whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act,
as such rule may be amended from time to time ("Rule 144A"), in transactions
under Rule 144A and outside the United States to certain persons in reliance on
Regulation S under the Securities Act.
The Initial Purchasers and their direct and indirect transferees of the
Notes will be entitled to the benefits of the Registration Rights Agreement to
be dated as of March 18, 1999 among the parties hereto (the "Registration Rights
Agreement") pursuant to which the Issuers will agree, among other things, to
file (i) a registration statement (the "Registration Statement") with the
Commission registering the Notes or the Exchange Notes (as defined in the
Registration Rights Agreement) under the Securities Act or (ii) a shelf
registration statement pursuant to Rule 415 under the Securities Act relating to
the resale of the Notes by holders thereof or, if appli-
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cable, relating to the resale of Private Exchange Notes (as defined in the
Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange
of the Notes for Private Exchange Notes.
The Notes are being issued in connection with the merger of Muzak Limited
Partnership, a Delaware limited partnership ("Old Muzak"), with and into the
Company (the "Merger") pursuant to the Agreement and Plan of Merger, dated as of
January 29, 1999, among the Company, Holdings, Old Muzak, MLP Acquisition L.P.,
a Delaware limited partnership and the managing general partner of Old Muzak and
Music Holdings Corp., a Delaware corporation and the general partner of MLP
Acquisition (the "Merger Agreement"). At the time of the Merger, the Company
will change its name to Muzak LLC and Holdings will change its name to Muzak
Holdings LLC. In connection with the Merger, the Company will: (i) enter into a
new senior secured credit facility that provides for $135 million of term loans
and a $35 million revolving credit facility (the "New Credit Agreement"); (ii)
issue $115 million of Senior Subordinated Notes due 2009 (the "Senior
Subordinated Notes Offering"); and (iii) complete a tender offer and consent
solicitation for the outstanding 10% Senior Notes due 2003 of Old Muzak (the
"Muzak Notes") (the "Tender Offer"); and Holdings will make (i) a cash equity
investment of approximately $59.9 million in the Company of which approximately
$40 million will be made from the proceeds of the Offering and (ii) a $15.0
million equity investment of assets to be acquired in the Pending Capstar
Acquisition (as defined herein) (the "Equity Contribution"). The date and time
of the consummation of the Merger is referred to herein as the "Effective Time."
In addition, (i) Holdings has entered into a Contribution Agreement dated as of
February 19, 1999 with Capstar Broadcasting Corporation ("Capstar") pursuant to
which Capstar agreed to contribute to Holdings certain Muzak franchises
principally in exchange for equity interests in Holdings (the "Pending Capstar
Acquisition") and (ii) the Company has entered into a Stock Purchase Agreement
dated as of February 18, 1999 with Carolina Georgia Sound, Inc. pursuant to
which the Company acquired Electro Systems Corporation, an owner of Muzak
franchises (the "Electro Systems Acquisition").
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Concurrently with the Tender Offer, the Company is soliciting consents
(the "Consent Solicitation") from holders of the Muzak Notes to amendments (the
"Proposed Amendments") to certain of the provisions in the Indenture governing
the Muzak Notes (the "Muzak Indenture") as described in the Offer to Purchase
and Consent Solicitation Statement dated February 8, 1999. After receipt of the
required consents from the holders of the Muzak Notes, Old Muzak and the trustee
under the Muzak Indenture will enter into a supplemental indenture to give
effect to the Proposed Amendments (the "Supplemental Indenture"). Unless
otherwise indicated, the use of the term Tender Offer herein shall be deemed to
include the Consent Solicitation.
The Merger Agreement and the documents entered into in connection
therewith are herein collectively referred to as the "Merger Documents." This
Agreement, the Notes, the Exchange Notes, the Private Exchange Notes, the
Registration Rights Agreement and the Indenture are herein collectively referred
to as the "Offering Documents." The Merger Documents, the Offering Documents,
the New Credit Agreement, and all the documents related to the Equity
Contribution, the Pending Capstar Acquisition, the Electro Systems Acquisition
and the Tender Offer are herein collectively referred to as the "Transaction
Documents."
The Merger, the issuance of the Notes, the Equity Contribution, the
Pending Capstar Acquisition, the Electro Systems Acquisition and the Tender
Offer and the transactions contemplated by the New Credit Agreement are herein
collectively referred to as the "Transactions."
2. Representations and Warranties of the Issuers. The Issuers,
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jointly and severally, represent and warrant to and agree with the Initial
Purchasers that:
(a) The Final Memorandum, as of its date and the Closing Date (as
defined in Section 3 hereof), does not and will not contain 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, ex-
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cept that the representations and warranties set forth in this Section 2(a) do
not apply to statements or omissions that are made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished to the
Issuers in writing by the Initial Purchasers expressly for use in the Final
Memorandum or any amendment or supplement thereto. The Final Memorandum and any
amendment or supplement thereto complied or will comply in all material respects
with Rule 144A(d)(4) under the Securities Act.
(b) Each of the Issuers and their subsidiaries set forth in Exhibit A
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hereto (the "Subsidiaries") has been and, at and as of the Effective Time will
be, and to the best knowledge of the Issuers, each of Old Muzak and its
subsidiaries set forth in Exhibit B hereto (the "Muzak Subsidiaries") has been
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and, at and as of the Effective Time, each of the Muzak Subsidiaries will be,
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has and, at and as of the Effective Time, will
have the power and authority to carry on its business as now being conducted and
as contemplated to be conducted and to own and operate the properties and assets
now owned and being operated by it or to be owned and operated by it in each
case as described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum). Each of the Issuers and the
Subsidiaries is and, at and as of the Effective Time will be, and to the best
knowledge of the Issuers, each of Old Muzak and the Muzak Subsidiaries is, and
at and as of the Effective Time, each of the Muzak Subsidiaries will be, duly
qualified to do business as a foreign entity and is or will be in good standing
in each jurisdiction in which such qualification is necessary under the
applicable law as a result of the conduct of its business or the ownership of
its properties, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the general
affairs, management, business, condition (financial or other), properties,
prospects or
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results of operations of the Issuers, taken as a whole (any such event, a
"Material Adverse Effect").
(c) As of the Closing Date (after giving effect to the Transactions and
assuming the Pending Capstar Acquisition has been consummated by such date):
Holdings will have the capitalization materially in conformance with that set
forth in the Final Memorandum; and all of the outstanding capital stock of
Holdings Finance Corp. will be owned and held by Holdings.
(d) Except as described in the Final Memorandum: (i) all of the issued and
outstanding shares or capital stock of the Issuers and the Subsidiaries are and,
at and as of the Effective Time, will be, and to the best knowledge of the
Issuers, as of the Closing Date, all of the issued and outstanding shares of
capital stock of the Muzak Subsidiaries will be, duly authorized and validly
issued and fully paid and non-assessable and none of them have been issued in
violation of any preemptive or other right; (ii) all of the outstanding shares
of capital stock of the Subsidiaries are owned, directly or indirectly, by
Holdings; (iii) except for options issued to management, as of the Effective
Time, no options, warrants or other rights to purchase from Holdings or any
agreements or other obligations of Holdings or any Subsidiary to issue or other
rights to convert any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in Holdings or any Subsidiary are
outstanding and no holder of securities of Holdings or any Subsidiary is
entitled to have such securities registered under the Registration Statement;
and (iv) as of the Effective Time, there will be no agreement, understanding or
arrangement among Holdings or any Subsidiary and each of their respective
stockholders or any other person relating to the ownership or disposition of any
capital stock of Holdings or any Subsidiary, or the election of directors of
Holdings or any Subsidiary, or the governance of Holdings' or any Subsidiary's
affairs, and, if any, such agreements, understandings and arrangements will not
be
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breached or violated as a result of the execution and delivery of, or the
consummation of the Transactions.
(e) Each of the Issuers has and, at and as of the Effective Time, each of
the Issuers will have the required corporate or limited liability company power
and authority to execute, deliver and perform its obligations under the Notes,
the Exchange Notes and the Private Exchange Notes. The Notes, the Exchange
Notes, the Private Exchange Notes have each been duly and validly authorized by
each of the Issuers for issuance and, when executed by the Issuers and
authenticated by the Trustee in accordance with the provisions of the Indenture
and, in the case of the Notes, when delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, will have been duly executed,
issued and delivered and will constitute valid and legally binding obligations
of the Issuers, entitled to the benefits of the Indenture and enforceable
against the Issuers in accordance with their terms except that the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding at law or in equity) and
the discretion of the court before which any proceeding with respect thereto may
be brought (the "Enforceability Exceptions"). The Notes are in the form
contemplated by the Indenture.
(f) Each of the Issuers has the requisite corporate or limited liability
company power and authority to execute, deliver and perform its obligations
under the Indenture. The Indenture has been duly and validly authorized by the
Issuers and meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"), and, when executed and delivered by the
Issuers (assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms except that the
en-
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forcement thereof may be limited by the Enforceability Exceptions.
(g) Each of the Issuers has the requisite corporate or limited liability
company power and authority to execute, deliver and perform its obligations
under the Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed and delivered
by the Issuers (assuming due authorization, execution and delivery by the
Initial Purchasers), will constitute a valid and legally binding agreement of
the Issuers, enforceable against the Issuers in accordance with its terms except
(i) that the enforcement thereof may be limited by the Enforceability Exceptions
and (ii) as any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(h) Each of the Issuers has the requisite corporate or limited liability
power and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the Issuers
and, when executed and delivered by the Issuers (assuming due authorization,
execution and delivery by the Initial Purchasers), will constitute a valid and
legally binding agreement of such Issuer, enforceable against the Issuers in
accordance with its terms except (i) that the enforcement thereof may be limited
by the Enforceability Exceptions and (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities laws and
public policy considerations. The Notes, the Indenture and the Registration
Rights Agreement conform in all material respects to the descriptions thereof in
the Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum).
(i) The Issuers and the Subsidiaries (to the extent a party thereto) and,
to the best knowledge of the Issuers, Old Muzak and each of the Muzak
Subsidiaries (to the extent a party thereto), each have the requisite power and
authority to execute, deliver and perform each of their
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respective obligations under each of the Transaction Documents other than the
Offering Documents and to enter into all other agreements, instruments and
documents executed and delivered by any of them pursuant thereto and to carry
out their respective obligations thereunder. As of the Closing Date, each of the
Transaction Documents other than the Offering Documents will have been duly and
validly authorized by the Issuers, the Subsidiaries and Old Muzak (in each case
to the extent a party thereto) and, when executed and delivered by the Issuers,
the subsidiaries and Old Muzak (in each case to the extent a party thereto),
will constitute a valid and legally binding agreement of the Issuers, the
Subsidiaries and Old Muzak (in each case to the extent a party thereto),
enforceable against the Issuers, the Subsidiaries and Old Muzak (in each case to
the extent a party thereto) in accordance with their respective terms except
that (i) the enforcement thereof may be limited by the Enforceability Exceptions
and (ii) as any rights to indemnity or contribution hereunder may be limited by
federal and state securities laws and public policy considerations.
(j) (i) Holdings has delivered to the Initial Purchasers a true and
correct copy of each of the Transaction Documents that have been executed and
delivered prior to the date of this Agreement, together with all related
agreements and all schedules and exhibits thereto, and as of the date hereof
there have been no amendments, alterations, modifications or waivers of any of
the provisions of any of such Transaction Documents since their date of
execution; and (ii) there exists as of the date hereof (after giving effect to
the transactions contemplated by each of the Transaction Documents) no event or
condition that would constitute a default or an event of default (in each case
as defined in each of the Transaction Documents) under any of the Transaction
Documents that would result in a Material Adverse Effect or materially adversely
affect the ability of the Issuers, the Company and Old Muzak to consummate the
Transactions.
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(k) Except as set forth in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum), no
consent, approval, authorization or order of any court or governmental agency or
body is required for the performance of any of the Transaction Documents by the
Issuers, the Subsidiaries and Old Muzak, to the extent each is or will be a
party thereto, or for the consummation by the Issuers, the Subsidiaries or Old
Muzak, of any of the transactions contemplated thereby, except for such
consents, approvals, authorizations or orders as have been obtained or made or
as may be required under the Securities Act and the TIA (with respect to the
transactions contemplated by the Registration Rights Agreement) or as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and distribution of the Notes by the Initial Purchasers or such that
the failure to obtain would not reasonably be expected to have a Material
Adverse Effect; and none of the Issuers or the Subsidiaries is and, to the best
knowledge of the Issuers, none of Old Muzak or the Muzak Subsidiaries is, (i) in
violation of its respective certificate of incorporation, organizational
documents, limited liability company agreement, partnership agreement or bylaws,
(ii) in violation of any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets, which violation would,
individually or in the aggregate, have a Material Adverse Effect, or (iii) in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any of the Transaction Documents or any other
contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate or agreement or instrument to
which it is a party or to which it is subject, which default would, individually
or in the aggregate, have a Material Adverse Effect.
(l) The execution, delivery and performance by (i) the Issuers and the
Subsidiaries and (ii) to the best knowledge of the Issuers, Old Muzak and the
Muzak Subsidiaries of, in each case, each of the Transaction Documents
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to which it is a party, and the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof, will not
violate, conflict with or constitute or result in a breach of or a default under
(or an event that, with notice or lapse of time, or both, would constitute a
breach of or a default under) any of (a) the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, or agreement or instrument to which any of them is a party
or to which any of their respective properties or assets are subject, which
violation, conflict, breach or default would, individually or in the aggregate,
have a Material Adverse Effect, (b) the certificate of incorporation,
organizational documents, limited liability company agreement, partnership
agreement or by-laws of any of them or (c) (assuming compliance with all
applicable Federal and state securities and "Blue Sky" laws and the accuracy of
the representations and warranties of the Initial Purchasers in Section 9
hereof) any statute, judgment, decree, order, rule or regulation of any court or
governmental agency or other body applicable to any of them or any of their
respective properties or assets, which violation, conflict, breach or default
would, individually or in the aggregate, have a Material Adverse Effect.
(m) The audited historical financial statements of the Company and Audio
Communications Network, Inc. ("ACN Inc.") and, to the best knowledge of the
Issuers, Old Muzak, included in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum) present
fairly in all material respects the consolidated financial position, results of
operations and cash flows of each such entity, at the dates and for the periods
to which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein; the unaudited financial statements and financial
information of the Capstar Affiliate (as defined in the Final Memorandum),
Business Sound Inc. (as defined in the
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Final Memorandum), the MTI Business (as defined in the Final Memorandum),
Electro Systems Inc. and the Omaha Muzak affiliate to be acquired by Capstar
included in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) present fairly in all
material respects the financial position and results of operations of each such
entity at the dates and for the periods to which they relate, and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis except as otherwise stated therein and have been prepared on
a basis substantially consistent with that of the audited financial statements
of the Company referred to above except as otherwise stated therein; the summary
and selected financial and statistical data included in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum) present fairly in all material respects the information shown
therein and have been prepared and compiled on a basis consistent with the
audited and unaudited financial statements included therein, except as otherwise
stated therein; and each of PricewaterhouseCoopers LLP and Deloitte & Touche
LLP, which have examined certain of such financial statements as set forth in
their reports included in the Final Memorandum (or, if the Final Memorandum is
not in existence, the most recent Preliminary Memorandum), are independent
public accounting firms within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants
and its interpretations and rulings.
(n) (i) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Final Memorandum (or,
if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum) have been properly computed on the bases described therein; and the
assumptions used in the preparation of the pro forma financial statements and
other pro forma financial information included in the Final Memorandum (or, if
the Final Memorandum is not in ex-
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istence, the most recent Preliminary Memorandum) are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(o) Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum), there
is not pending or, to the best knowledge of the Issuers, threatened any action,
suit, proceeding, inquiry or investigation, governmental or otherwise, to which
any of the Issuers or, to the best knowledge of the Issuers, Old Muzak or any
Muzak Subsidiary is a party, or to which their respective properties or assets
are subject, before or brought by any court, arbitrator or governmental agency
or body, that, if determined adversely to the Issuers, the Subsidiaries or Old
Muzak or any Muzak Subsidiary, would, individually or in the aggregate, have a
Material Adverse Effect, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Notes to be
sold hereunder or the other Transactions.
(p) None of the Issuers or the Subsidiaries has, and, to the best
knowledge of the Issuers, none of Old Muzak or any of the Muzak Subsidiaries
has, and, after giving effect to the Transactions and the issuance and sale of
the Notes, none of the Issuers or the Subsidiaries will not have, any liability
for any prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other plan
which is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which any of them makes or ever has made a contribution
and in which any employee of any of them is or has ever been a participant. With
respect to such plans, the Issuers and the Subsidiaries are, and, to the best
knowledge of the Issuers, Old Muzak and the Muzak Subsidiaries are, and, after
giving effect to the Transactions and the issuance and sale of the Notes, the
Issuers
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and the Subsidiaries will be, in compliance in all material respects with all
provisions of ERISA.
(q) The Issuers and the Subsidiaries and, to the best knowledge of the
Issuers, Old Muzak and the Muzak Subsidiaries, own or possess adequate licenses
or other rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how that are necessary to conduct their business as
described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum). None of the Issuers or the
Subsidiaries and, to the best knowledge of the Issuers, none of Old Muzak or any
of the Muzak Subsidiaries, has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how that, if such assertion of infringement or
conflict were sustained, would, individually or in the aggregate, have a
Material Adverse Effect.
(r) Each of the Issuers and the Subsidiaries, and, to the best knowledge
of the Issuers, each of Old Muzak and the Muzak Subsidiaries, possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals presently required or necessary
to own or lease, as the case may be, and to operate its respective properties
and to carry on its respective businesses as now or proposed to be conducted as
set forth in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) ("Permits"), except where the
failure to obtain such Permits would not, individually or in the aggregate, have
a Material Adverse Effect; each of the Issuers and the Subsidiaries and, to the
best knowledge of the Issuers, each of Old Muzak and the Muzak Subsidiaries, has
fulfilled and performed all of its obligations with respect to such Per-
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mits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, except for
nonperformance or events or revocations or terminations that would not,
individually or in the aggregate, have a Material Adverse Effect; and none of
the Issuers or the Subsidiaries and, to the best knowledge of the Issuers, none
of Old Muzak and the Muzak Subsidiaries, has received any notice of any
proceeding relating to revocation or modification of any such Permit, except as
described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) and except where such
revocation or modification would not, individually or in the aggregate, have a
Material Adverse Effect.
(s) Subsequent to the respective dates as of which information is given in
the Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) and except as described therein or as
contemplated by the Transaction Documents, (i) the Issuers, the Subsidiaries
and, to the best knowledge of the Issuers, Old Muzak and the Muzak Subsidiaries
have not incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions not in the ordinary course of
business, (ii) the Issuers, the Subsidiaries and, to the best knowledge of the
Issuers, Old Muzak and the Muzak Subsidiaries have not purchased any of their
respective outstanding capital stock, membership interests, partnership
interests or the equivalent, or declared, paid or otherwise made any dividend or
distribution of any kind on any of their respective capital stock, membership
interests, partnership interest or otherwise, (iii) there shall not have been
any change in the capital stock or long-term indebtedness of the Issuers, the
Subsidiaries and, to the best knowledge of the Issuers, Old Muzak and the Muzak
Subsidiaries and (iv) none of the Issuers, the Subsidiaries or, to the best
knowledge of the Issuers, Old Muzak or any of the Old Muzak Subsidiar-
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ies, has sustained any material loss or interference with its business from
fire, explosion, flood, earthquake or other calamity, whether or not covered by
insurance, except in each case as would not have a Material Adverse Effect.
(t) Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum), none of
the Issuers or the Subsidiaries and, to the best knowledge of the Issuers, Old
Muzak or the Muzak Subsidiaries is in default under any of the contracts
described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum), has received a notice or
claim of any such default or has knowledge of any breach of such contracts by
the other party or parties thereto, except such defaults or breaches as would
not, individually or in the aggregate, have a Material Adverse Effect.
(u) None of the Issuers, the Subsidiaries or, to the best knowledge of the
Issuers, Old Muzak or the Old Muzak Subsidiaries has taken or will take any
action that would cause this Agreement or the issuance or sale of the Notes to
violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in effect, on
the Closing Date.
(v) Each of the Issuers and the Subsidiaries and, to the best knowledge of
the Issuers, Old Muzak and the Muzak Subsidiaries has good and marketable title
to all real property described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum) as being
owned by it and good and marketable title to the leasehold estate in the real
property described therein as being leased by it, free and clear of all liens,
charges, encumbrances or restrictions, except, in each case, as described in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) or such as would not, indi-
-17-
vidually or in the aggregate, have a Material Adverse Effect.
(w) Each of the Issuers and the Subsidiaries and, to the best knowledge of
the Issuers, Old Muzak and the Muzak Subsidiaries, has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect; and, other than taxes due thereon or tax
deficiencies which any Issuer or any Subsidiary or, to the best knowledge of the
Issuers, Old Muzak or any Muzak Subsidiary reasonably believes that it has
provided adequate reserves, has paid all taxes due thereon and there is no tax
deficiency that has been asserted against any Issuer or any Subsidiary or, to
the best knowledge of the Issuers, Old Muzak and the Muzak Subsidiaries, that
would, individually or in the aggregate, have a Material Adverse Effect.
(x) (i) Immediately after the consummation of the Transactions, the fair
value and present fair saleable value of the assets of the Issuers will exceed
the sum of their stated liabilities and identified contingent liabilities; and
(ii) the Issuers are not, nor will they be, after giving effect to the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby, (a) left with
unreasonably small capital with which to carry on their businesses as is
proposed to be conducted, (b) unable to pay their debts (contingent or
otherwise) as they mature or (c) insolvent.
(y) Except as disclosed in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum) and
except as would not individually or in the aggregate have a Material Adverse
Effect, (A) each of the Issuers and the Subsidiaries and, to the best knowledge
of the Issuers, Old Muzak and the Muzak Subsidiaries, is in compliance with all
applicable Environmental Laws, (B) each of the Issuers and the Subsidiaries and,
to the best knowledge of the Issuers, Old Muzak
-18-
and the Muzak Subsidiaries has made all filings and provided all notices
required under any applicable Environmental Law, and has all permits,
authorizations and approvals required under any applicable Environmental Laws
and is in compliance with their requirements, (C) there are no pending or, to
the best knowledge of the Issuers, after due inquiry, threatened Environmental
Claims against any of the Issuers or the Subsidiaries or, in each case, to the
best knowledge of the Issuers, Old Muzak and the Muzak Subsidiaries and (D) none
of the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, Old
Muzak and the Muzak Subsidiaries has knowledge of any circumstances with respect
to any of their respective properties or operations that could reasonably be
anticipated to form the basis of an Environmental Claim against any of them or
any of their subsidiaries or any of their respective properties or operations
and the business operations relating thereto.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code or rule and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment binding on any of the Issuers,
the Subsidiaries or Old Muzak relating to pollution or protection of the
environment or health or safety or any chemical, material or substance that is
subject to regulation thereunder. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, written notices of responsibility, information requests, liens, written
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law.
(z) None of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, Old Muzak and the Muzak Subsidiaries, or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Securi-
-19-
ties Act) directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any "security" (as defined
in the Securities Act) which is or could be integrated with the sale of the
Notes in a manner that would require the registration under the Securities Act
of the Notes or (ii) engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
in connection with the offering of the Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act. Assuming the
accuracy of the Initial Purchasers' representations and warranties set forth in
Section 9 hereof, the offer and sale of the Notes to the Initial Purchasers in
the manner contemplated by this Agreement and the Final Memorandum does not
require registration under the Securities Act and the Indenture does not require
qualification under the TIA.
(aa) No securities of the Issuers or any of the Subsidiaries are (i) of
the same class (within the meaning of Rule 144A under the Securities Act) as the
Notes and (ii) listed on a national securities exchange registered under Section
6 of the Exchange Act or quoted in a U.S. automated interdealer quotation
system.
(bb) None of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, Old Muzak or the Muzak Subsidiaries, or, in each case, any of their
respective Affiliates or any person acting on their behalf, has engaged in any
directed selling efforts (as that term is defined in Regulation S under the
Securities Act ("Regulation S")) with respect to the Notes; and the Issuers and
the Subsidiaries and, to the best knowledge of the Issuers, Old Muzak and the
Muzak Subsidiaries, their respective Affiliates and any person acting on their
behalf have acted in accordance with the offering restrictions requirements of
Regulation S.
(cc) None of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, Old Muzak and the Muzak
-20-
Subsidiaries, is required to register as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(dd) None of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, Old Muzak or the Muzak Subsidiaries, or any of their respective
directors, officers or controlling persons, has taken, directly or indirectly,
any action designed, or that might reasonably be expected, to cause or result,
under the Act or otherwise, in, or that has constituted, stabilization or
manipulation of the price of any security of any Issuer to facilitate the sale
or resale of the Notes (it being understood that no representation or warranty
is made as to any actions by the Initial Purchasers).
(ee) Except as set forth in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum), there
is no strike, labor dispute, slowdown or work stoppage with the employees of any
of the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, Old
Muzak or the Muzak Subsidiaries, which is pending or, to the best knowledge of
the Issuers, threatened that would have a Material Adverse Effect.
(ff) Each of the Issuers and the Subsidiaries and, to the best knowledge
of the Issuers, Old Muzak and the Muzak Subsidiaries, carries insurance
(including self-insurance) in such amounts and covering such risks as in its
reasonable determination is adequate for the conduct of its business and the
value of its properties.
(gg) Each of the Issuers and the Subsidiaries and, to the best knowledge
of the Issuers, Old Muzak and the Muzak Subsidiaries, (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
-21-
accountability for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported accountability
for its assets is compared with existing assets at reasonable intervals.
(hh) The statistical and market and industry-related data included in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) are based on or derived from sources which the
Issuers believe to be reliable and accurate or represent the Issuers' good faith
estimates that are made on the basis of data derived from such sources.
Any certificate signed by any officer of any Issuer and delivered to any
Initial Purchaser or to counsel for the Initial Purchasers shall be deemed a
joint and several representation and warranty by the Issuers to each Initial
Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
----------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchasers, and each of the Initial Purchasers, acting
severally and not jointly, agrees to purchase from the Issuers, at 51.595% of
their principal amount, the respective aggregate principal amounts of the Notes
set forth opposite their respective names on Schedule 1 hereto.
----------
One or more certificates in definitive form for the Notes that the Initial
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as each Initial Purchaser
requests upon notice to Holdings at least 48 hours prior to the Closing Date,
shall be delivered by or on behalf of Holdings, against payment by or on behalf
of the Initial Purchasers of the purchase price therefor by wire transfer of
immediately available funds to the account of Holdings previously designated by
it in writing. Such delivery of and payment for the Notes shall be made at the
offices of Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
9:00 a.m., New York time, on
-22-
March 18, 1999, or at such date as the Initial Purchasers and Holdings may agree
upon, such time and date of delivery against payment being herein referred to as
the "Closing Date." Holdings will make such certificate or certificates for the
Notes available for inspection by the Initial Purchasers at the offices in New
York, New York of Xxxxxxxx & Xxxxx at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
----------------------------------
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Certain Covenants. The Issuers, jointly and severally, covenant
-----------------
and agree with the Initial Purchasers that:
(a) None of the Issuers will amend or supplement the Final Memorandum
or any amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given its consent (which consent shall not be
unreasonably withheld). The Issuers will promptly, upon the reasonable request
of the Initial Purchasers or counsel to the Initial Purchasers, make any
amendments or supplements to the Final Memorandum that may be reasonably
necessary or advisable in connection with the resale of the Notes by the Initial
Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the distribution of the Notes by the Initial
Purchasers; provided, however, that in connection therewith none of the Issuers
-------- -------
shall be required to qualify as a foreign corporation or to execute a general
consent to service of process in any
-23-
jurisdiction or to take any other action that would subject it to general
service of process or to taxation in respect of doing business in any
jurisdiction in which it is not otherwise subject.
(c) If, at any time prior to the completion of the resale by the
Initial Purchasers of the Notes or the Private Exchange Notes, any event shall
occur as a result of which it is necessary, in the opinion of counsel for the
Initial Purchasers, to amend or supplement the Final Memorandum in order to make
such Final Memorandum not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if for any other reason it shall
be necessary to amend or supplement the Final Memorandum in order to comply with
applicable laws, rules or regulations, the Issuers shall (subject to Section
5(a)) forthwith amend or supplement such Final Memorandum at their own expense
so that, as so amended or supplemented, such Final 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 existing at the time it is delivered to a purchaser, not
misleading and will comply with all applicable laws, rules or regulations.
(d) The Issuers will, without charge, provide to each Initial
Purchaser and to counsel to the Initial Purchasers as many copies of each of the
Preliminary Memorandum and Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) During the period of five years from the Closing Date, the
Issuers will furnish to the Initial Purchasers (a) as soon as available, a copy
of each report and other communication (financial or otherwise) of any Issuer
mailed to the Trustee or the holders of the Notes, stockholders or any national
securities exchange on which any class of securities of any Issuer may be listed
other than materials filed with the Commission and (b) from time to
-24-
time such other information concerning the Issuers as the Initial Purchasers may
reasonably request.
(f) If this Agreement shall terminate or shall be terminated after
execution because of any failure or refusal on the part of the Issuers to comply
with the terms or fulfill any of the conditions of this Agreement, the Issuers
agree to reimburse the Initial Purchasers for all reasonable out-of-pocket
expenses (including fees and expenses of counsel for the Initial Purchasers)
incurred by you in connection herewith.
(g) The Issuers will apply the net proceeds from the sale of the
Notes materially as set forth under "Use of Proceeds" in the Final Memorandum.
(h) None of the Issuers or any of their respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any "security" (as defined in the Securities Act) which could be integrated
with the sale of the Notes in a manner which would require the registration
under the Securities Act of the Notes.
(i) For so long as the Notes constitute "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Issuers will
not, and will not permit any of the Subsidiaries to, solicit any offer to buy or
offer to sell the Notes by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act, except in connection with the exchange offer contemplated
by the Registration Rights Agreement.
(j) For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act and not able to be sold in their entirety under Rule 144 under
the Securities Act (or any successor provision), the Issuers will make
-25-
available, upon request, to any seller of such Notes the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Issuers
are then subject to Section 13 or 15(d) of the Exchange Act.
(k) The Issuers will use their best efforts to (i) permit the Notes
to be included for quotation on the PORTAL Market and (ii) permit the Notes
to be eligible for clearance and settlement through The Depository Trust
Company ("DTC").
(l) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S), the Issuers will not register any
transfer of such Notes not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Notes in the form of definitive
securities.
(m) The Issuers will use their best efforts to do and perform all
things required to be done and performed by them under this Agreement and
the other Offering Documents prior to or after the Closing Date and to
satisfy all conditions precedent on their part to the obligations of the
Initial Purchasers to purchase and accept delivery of the Notes.
6. Expenses. Notwithstanding any termination of this Agreement
--------
(pursuant to Section 11 or otherwise), the Issuers jointly and severally agree
to pay the following costs and expenses and all other costs and expenses
incident to the performance by the Issuers of their obligations hereunder: (i)
the negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement and of the other Offering Documents, any amendment or
supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith; (ii) the preparation, printing or reproduction of each Preliminary
Memorandum, the Final Memorandum and each amendment or supplement to any of
them; (iii) the delivery (including postage, air freight charges and charges for
counting and pack-
-26-
aging) of such copies of each Preliminary Memorandum, the Final Memorandum and
all amendments or supplements to any of them as may be reasonably requested for
use in connection with the offering and sale of the Notes; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the Notes,
including any stamp taxes in connection with the original issuance and sale of
the Notes and trustees' fees; (v) the reproduction and delivery of this
Agreement and the other Offering Documents, the preliminary and supplemental
"Blue Sky" memoranda and all other agreements or documents reproduced and
delivered in connection with the offering of the Notes; (vi) the registration or
qualification of the Notes for offer and sale under the securities or Blue Sky
laws of the several states (including filing fees and the reasonable fees,
expenses and disbursements of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial
Purchasers, relating to such registration and qualification not to exceed
$10,000); (vii) the transportation and other expenses incurred by or on behalf
of Holdings' representatives in connection with presentations to and related
communications with prospective purchasers of the Notes; (viii) the fees and
expenses of Holdings' accountants and the fees and expenses of counsel
(including local and special counsel) for the Issuers; (ix) fees and expenses of
the Trustee including fees and expenses of its counsel; (x) all expenses and
listing fees incurred in connection with the application for quotation of the
Notes on the PORTAL Market; and (xi) any fees charged by investment rating
agencies for the rating of the Notes.
7. Conditions of the Initial Purchasers' Obligations. The several
-------------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the Notes are
subject to the accuracy of the representations and warranties contained herein,
to the performance by the Issuers of their respective covenants and agreements
hereunder and to the following additional conditions unless waived in writing by
the Initial Purchasers:
(i) The Initial Purchasers shall have received an opinion of counsel
in form and substance satisfactory to the Initial Purchasers and Xxxxxx
Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers, dated the Closing
Date, of
-27-
each of (i) Xxxxxxxx & Xxxxx, counsel to the Issuers, substantially in the
form of Exhibit C hereto, (ii) Weil, Gotshal & Xxxxxx LLP, counsel
---------
to Old Muzak, substantially in the form of Exhibit D hereto. In rendering
---------
such opinions, each such counsel shall have received and may rely upon such
certificates and other documents and information, including one or more
opinions of local counsel reasonably acceptable to the Initial Purchasers
and Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers, as they may
reasonably request to pass upon such matters.
(ii) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial
Purchasers, with respect to the sufficiency of certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may require. In rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx
shall have received and may rely upon such certificates and other documents
and information as they may reasonably request to pass upon such matters.
In addition, in rendering their opinion, Xxxxxx Xxxxxx & Xxxxxxx may state
that their opinion is limited to matters of New York, Delaware corporate
and federal law.
(iii) The Initial Purchasers shall have received from
PricewaterhouseCoopers LLP and Deloitte & Touche LLP, independent public
accountants for the Company and Old Muzak, "comfort" letters dated the date
hereof and the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers and Xxxxxx Xxxxxx & Xxxxxxx, counsel to the
Initial Purchasers.
(iv) The representations and warranties of the Issuers contained in
this Agreement shall be true and correct on and as of the Closing Date; the
Issuers shall have complied in all material respects with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date.
(v) None of the issuance and sale of the Notes pursuant to this
Agreement or any of the Transactions or any
-28-
of the other transactions contemplated by any of the other Offering Documents or
the Transaction Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued; and there
shall not have been any legal action, order, decree or other administrative
proceeding instituted or threatened against any of the Issuers or against the
Initial Purchasers relating to the issuance of the Notes or the Initial
Purchasers' activities in connection therewith or any other transactions
contemplated by this Agreement or the Final Memorandum, the other Offering
Documents or the Transaction Documents.
(vi) Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), there shall not have
occurred (i) any change, or any development involving a prospective change, in
or affecting the general affairs, management, business, condition (financial or
other), properties, prospects or results of operations of the Issuers, the
Subsidiaries, Old Muzak and the Muzak Subsidiaries, taken as a whole, not
contemplated by the Final Memorandum that, in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Notes, or (ii)
any event or development relating to or involving any of the Issuers, the
Subsidiaries, Old Muzak or the Muzak Subsidiaries, or any of their respective
officers or directors that makes any statement made in the Final Memorandum
untrue or that, in the opinion of the Issuers and their counsel or the Initial
Purchasers and their counsel, requires the making of any addition to or change
in the Final Memorandum in order to state a material fact required by any
applicable law, rule or regulation to be stated therein or necessary in order to
make the statements made therein not misleading.
(vii) The Initial Purchasers shall have received certificates, dated
the Closing Date and signed by the chief
-29-
executive officer and the chief financial officer of each Issuer (in their
capacities as such), to the effect that:
a. All of the representations and warranties of such Issuer set
forth in this Agreement are true and correct as if made on and as of the
Closing Date and such Issuer has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date.
b. The issuance and sale of the Notes pursuant to this Agreement or
the Final Memorandum and the consummation of the transactions contemplated
by the Transaction Documents have not been enjoined (temporarily or
permanently) and no restraining order or other injunctive order has been
issued and there has not been any legal action, order, decree or other
administrative proceeding instituted or, to such officers' knowledge,
threatened against such Issuer relating to the issuance of the Notes or the
Initial Purchasers' activities in connection therewith or in connection
with any other transactions contemplated by this Agreement or the Final
Memorandum, the other Offering Documents or the Transaction Documents.
c. Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), there has not
occurred (i) any change, or any development involving a prospective change,
in or affecting the general affairs, management, business, condition
(financial or other), properties, prospects or results of operations of the
Issuers, the Subsidiaries, Old Muzak and the Muzak Subsidiaries, taken as a
whole, not contemplated by the Final Memorandum that would materially
adversely affect the market for the Notes, or (ii) any event or development
relating to or involving any of the Issuers, the Subsidiaries, Old Muzak
and the Muzak Subsidiaries or any of their
-30-
respective officers or directors that makes any statement made in the
Final Memorandum untrue or that requires the making of any addition to
or change in the Final Memorandum in order to state a material fact
required by any applicable law, rule or regulation to be stated
therein or necessary in order to make the statements made therein not
misleading.
d. At the Closing Date and after giving effect to the
consummation of the transactions contemplated by the Transaction
Documents, there exists no Default or Event of Default (as defined in
the Indenture).
(viii) Each of the Transaction Documents and each other agreement or
instrument executed in connection with the Transactions shall be reasonably
satisfactory in form and substance to the Initial Purchasers and shall have been
executed and delivered by all the respective parties thereto and shall be in
full force and effect, and there shall have been no material amendments,
alterations, modifications or waivers of any provision thereof since the date of
this Agreement. On the Closing Date, the New Credit Agreement shall provide for
revolving credit and term loan borrowings in such amounts as are sufficient to
consummate the Transactions to be consummated on the Closing Date and
substantially as described in the Final Memorandum.
(ix) On the Closing Date, the Company shall have received not less
than $115 million in gross proceeds from the Senior Subordinated Notes Offering.
(x) The Company shall have received cash equity financing (including
the proceeds of the Offering) pursuant to the Equity Contribution in such an
amount as is sufficient to consummate the Transactions to be consummated on the
Closing Date, substantially as described in the Final Memorandum.
-31-
(xi) The Certificate of Merger with respect to the Merger shall
have been filed with the Secretary of State of the State of Delaware and
shall have become effective.
(xii) Each of the Proposed Amendments to the Muzak Notes shall
have been approved by the requisite percentage of holders of Muzak Notes;
simultaneously with the closing of the sale of the Notes by the Issuers,
the Issuers shall have accepted for payment and have instructed the
depositary with respect thereto to pay to the trustee under the Muzak
Indenture the purchase price for all Muzak Notes properly tendered pursuant
to the Tender Offer. The Supplemental Indenture shall have been executed by
Old Muzak and the trustee under the Muzak Indenture and the terms of the
Muzak Indenture shall be as modified by such Supplemental Indenture.
(xiii) All proceedings taken in connection with the issuance of the
Notes and the transactions contemplated by this Agreement, the other
Offering Documents and the Transaction Documents and all documents and
papers relating thereto shall be reasonably satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers. The Initial Purchasers
and counsel to the Initial Purchasers shall have received copies of such
papers and documents as they may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to them.
(xiv) The Issuers shall apply the proceeds necessary from the
issuance and sale of the Notes as described under "Use of Proceeds" in the
Final Memorandum.
(xv) On the Closing Date, the Initial Purchasers shall have
received a letter, dated the Closing Date, from Xxxxxxxx Xxxxx Xxxxxx &
Xxxxx Inc. with respect to the solvency of the Issuers as of the Effective
Time in form, scope and substance reasonably satisfactory to the Initial
Purchasers.
-32-
(xvi) Since the date of this Agreement, there shall not have
been any announcement by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g) under the Securities
Act, that (A) it is downgrading its rating assigned to any debt securities
of Holdings, the Company or Old Muzak, or (B) it is reviewing its rating
assigned to any debt securities of Holdings, the Company or Muzak with a
view to possible downgrading, or with negative implications, or direction
not determined.
(xvii) On or before the Closing Date, the Initial Purchasers
shall have received the Registration Rights Agreement executed by the
Issuers and such agreement shall be in full force and effect at all times
from and after the Closing Date.
(xviii) The Issuers shall have furnished or caused to be furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall have reasonably requested.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel to the Initial Purchasers. The Issuers shall
furnish to the Initial Purchasers such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in such quantities
as the Initial Purchasers shall reasonably request.
8. Indemnification and Contribution. (a) Each Issuer jointly
--------------------------------
and
severally agrees to indemnify and hold harmless the Initial Purchasers, each
director, officer, employee or agent of any Initial Purchaser and each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages, liabilities or expenses to which such Initial Purchaser or such
director, officer, employee, agent or controlling person may become subject
under
-33-
the Securities Act, the Exchange Act or otherwise, insofar as any such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) arise
out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto or (B) any of the
Offering Documents or any application or other document, or any amendment
or supplement thereto, executed by any Issuer or based upon written
information furnished by or on behalf of any Issuer filed in any
jurisdiction in order to qualify the Notes under the securities or "Blue
Sky" laws thereof or filed with the Commission or any securities
association or securities exchange (collectively, the "Documents"); or
(ii) the omission or alleged omission to state, in any
Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, or any of the Documents, 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 xxxx xxxxxxxxx, promptly after demand, the Initial Purchasers and each such
director, officer, employee, agent or controlling person for any legal or other
expenses reasonably incurred by the Initial Purchasers or such director,
officer, employee, agent or controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability, expense or action; provided, however, that
-------- -------
none of the Issuers will be liable in any such case to any Initial Purchaser or
any director, officer, employee, agent or controlling person of such Initial
Purchaser to the extent that any such loss, claim, damages, liability expense or
action arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Memorandum or
the Final Memorandum or any amendment or supplement thereto, or any Document, in
reliance upon and in conformity with written information furnished to Holdings
by or on behalf of an Initial Purchaser specifically for use therein; and
provided, further,
-------- -------
-34-
that none of the Issuers will be liable to any Initial Purchaser or any
director, officer, employee, agent or any person controlling any Initial
Purchaser with respect to any such untrue statement or omission made in any
Preliminary Memorandum that is corrected in the Final Memorandum (or any
amendment or supplement thereto) to the extent that any such loss, claim,
damage, expense or liability results from the fact that the person asserting any
such loss, claim, damage, expense or liability purchased Notes from an Initial
Purchaser in reliance upon the Preliminary Memorandum but was not sent or given
a copy of the Final Memorandum (as amended or supplemented) that was made
available by the Issuers to such Initial Purchaser at or prior to the written
confirmation of the sale of the Notes to such person unless such failure to
deliver such Final Memorandum (as amended or supplemented) was a result of
noncompliance by the Issuers with Section 5(d) of this Agreement. This indemnity
agreement will be in addition to any liability that the Issuers may otherwise
have to the indemnified parties. The Issuers further agree that the
indemnification, contribution and reimbursement commitments set forth in this
Section 8 shall apply whether or not any Initial Purchaser is a formal party to
any such lawsuits, claims or other proceedings.
(b) The Initial Purchasers severally and not jointly will indemnify
and hold harmless the Issuers, their respective directors, officers, employees
and agents and each person, if any, who controls any of the Issuers within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which any of the Issuers
or any such director, officer, employee, agent or controlling person may become
subject under the Securities Act, the Exchange Act 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 any
material fact contained in any Preliminary Memorandum or the Final Memorandum or
any amendment or supplement thereto or any Document, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
was made in reliance upon and in conformity with written information furnished
to Holdings by or on behalf
-35-
of an Initial Purchaser specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, promptly
after request, any legal or other expenses reasonably incurred by any of the
Issuers or any such director, officer, employee, agent or controlling person in
connection with investigating or defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Initial Purchasers may otherwise have to the indemnified parties.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party except to the extent that
such omission results in the forfeiture by the indemnifying party of substantial
rights and defenses. In case any such action is brought against any indemnified
party, and such indemnified party notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the named
-------- -------
parties in any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties that are different from or additional to
those available to any such indemnifying party, and a conflict of interest may
exist between an indemnified party and the indemnifying party and the
representation of both would be inappropriate, then the indemnifying parties
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to
-36-
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable out-of-pocket costs of
investigation, incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions); (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying parties; or (iii) the indemnifying party shall have failed to
assume the defense or retain counsel reasonably satisfactory to the indemnified
party. After such notice from the indemnifying parties to such indemnified party
(so long as the indemnified party shall have informed the indemnifying parties
of such action in accordance with this Section 8 on a timely basis prior to the
indemnified party seeking indemnification hereunder), the indemnifying parties
will not be liable under this Section 8 for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party, unless such indemnified party waived its rights under
this Section 8, in which case the indemnified party may effect such a settlement
without such consent. No indemnifying party will, without the prior written
consent of the indemnified party (which shall not be unreasonably withheld or
delayed), settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification by an indemnified party may be sought hereunder (whether or not
-37-
the indemnified party or any person who controls any indemnified party within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party and each such director, officer, employee, agent or
controlling person from all liability arising out of such claim, action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act as to any such person.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable contribution, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits
received by the Issuers on the one hand and the Initial Purchasers on the other
from the offering of the Notes or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages, expenses or liabilities (or actions in respect
thereof). The relative benefits received by the Issuers on the one hand and the
Initial Purchasers on the other shall be deemed to be in the same proportion as
the total proceeds from the offering of the Notes (before deducting expenses)
received by the Issuers bear to the total discounts and commissions received by
the Initial Purchasers. The relative fault of the parties 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 on
-38-
the one hand or the Initial Purchasers on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with investigating or defending any such claim. The Issuers and the Initial
Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Issuers on the one hand and the Initial Purchasers on the other hand were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding any other provision of
this paragraph (d), the Initial Purchasers shall not be obligated to make
contributions hereunder that in the aggregate exceed the total discounts and
commissions received by the Initial Purchasers under this Agreement, less the
aggregate amount of any damages that the Initial Purchasers have otherwise been
required to pay by reason of the untrue or alleged untrue statements, and no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each director, officer, employee or agent of and each person, if
any, who controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, and each director, officer, employee and
agent of any of the Issuers and each person, if any, who controls any of the
Issuers within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Section 8, the
indemnification and contribution provisions of
-39-
the Registration Rights Agreement shall govern any claim with respect thereto.
9. Offering of Notes; Restrictions on Transfer. Each Initial
-------------------------------------------
Purchaser represents and warrants as to itself only that it is a QIB. Each
Initial Purchaser agrees with the Issuers as to itself only that (i) it has not
and will not solicit offers for, or offer or sell, the Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act; and (ii) it
has and will solicit offers for the Notes only from, and will offer the Notes
only to, (A) in the case of offers inside the United States persons whom such
Initial Purchaser reasonably believes to be QIBs or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to such Initial
Purchaser that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and, in each case,
in transactions under Rule 144A and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than an
estate or trust)); provided, however, that, in the case of this clause (B), in
-------- -------
purchasing such Notes such persons are deemed to have represented and agreed as
provided under the caption "Notice to Investors" contained in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum).
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchasers 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 (i) any investigation made by or
on behalf of the Issuers, any of their respective officers or directors, the
Initial Purchasers or any
-40-
controlling person referred to in Section 8 hereof and (ii) delivery of and
payment for the Notes, and shall be binding upon and shall inure to the benefit
of, any successors, assigns, heirs, personal representatives of the Issuers, the
Initial Purchasers and indemnified parties referred to in Section 8 hereof. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchasers by notice to the Issuers given in the event
that the Issuers shall have failed, refused or been unable to satisfy all
conditions on its respective part to be performed or satisfied hereunder on or
prior to the Closing Date or, if at or prior to the Closing Date:
(i) any of the Issuers, the Subsidiaries or Old Muzak shall have
sustained any loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, which loss or interference
has had or has a Material Adverse Effect or there shall have been any
material adverse change, or any development involving a prospective
material adverse change (including without limitation a change in
management or control of the Issuers, the Company or Old Muzak), in the
general affairs, management, business, condition (financial or other),
properties, prospects or results of operations of the Issuers, the
Subsidiaries or Old Muzak except as described in or contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York, American Stock
Exchange or the Nasdaq National Market shall have been suspended or minimum
or maximum prices shall have been established on any such exchange;
-41-
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any material change in the financial
markets of the United States that, in the sole judgment of the Initial
Purchasers, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes as contemplated by the Final
Memorandum, as amended as of the date hereof; or
(v) any securities of the Issuers, the Company or Old Muzak shall
have been downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Initial Purchasers, shall be hand delivered, mailed by first-
class mail, couriered by next-day air courier or telecopied and confirmed in
writing to the Initial Purchasers c/o CIBC Xxxxxxxxxxx Corp., 000 Xxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxx, and with a
copy to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx X. Xxxxxxxxx, Esq. If sent to the Issuers, shall be delivered,
mailed, couriered or telecopied and confirmed in writing, to Muzak LLC, 0000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx,
with a copy to Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx Xxxxxxx, Esq., and a copy to ABRY Partners, Inc., 00
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxx Xxxxxx.
-42-
13. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchasers and each of the Issuers and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuers contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Issuers, their respective officers, employees and agents and any person or
persons who controls any Issuer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Notes from the Initial
Purchasers will be deemed a successor because of such purchase.
14. No Waiver; Modifications in Writing. No failure or delay on the
-----------------------------------
part of any Issuer or the Initial Purchasers in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any Issuer or the Initial Purchasers at law or
in equity or otherwise. No waiver of or consent to any departure by any Issuer
or Initial Purchasers from any provision of this Agreement shall be effective
unless signed in writing by the party entitled to the benefit thereof, provided
--------
that notice of any such waiver shall be given to each party hereto as set forth
below. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of each of the
-43-
Issuers and the Initial Purchasers. Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Issuers or the Initial
Purchasers from the terms of any provision of this Agreement shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no notice
to or demand on the Issuers in any case shall entitle the Issuers to any other
or further notice or demand in similar or other circumstances.
15. Joint and Several Obligations. All of the obligations of the
-----------------------------
Issuers hereunder shall be joint and several obligations of each of them.
16. Information Supplied by the Initial Purchasers. The statements
----------------------------------------------
set forth in the fifth, ninth and tenth paragraphs under the heading "Plan of
Distribution" constitute the only information furnished by the Initial
Purchasers to the Issuers for purposes of Section 2(a) hereof.
17. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
18. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
--------------
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-44-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers and
the Initial Purchasers.
Very truly yours,
ACN HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ Xxxx Xxxxxx
--------------------------------------------------
Name: Xxxx Xxxxxx
Title:
MUZAK HOLDINGS FINANCE CORP., a Delaware corporation
By: /s/ Xxxx Xxxxxx
--------------------------------------------------
Name: Xxxx Xxxxxx
Title:
-45-
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
CIBC XXXXXXXXXXX CORP.
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
XXXXXXX, XXXXX & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
----------------------------------------
Xxxxxxx, Xxxxx & Co.
Schedule 1
----------
Principal Amount
of Notes at
Initial Purchaser Maturity
----------------- ----------------
CIBC Xxxxxxxxxxx Corp................................. $45,000,000
30,000,000
Xxxxxxx, Xxxxx & Co................................... -----------
Total............................................ $75,000,000
===========
EXHIBIT A
---------
Subsidiaries
------------
Muzak LLC
Muzak Finance Corp.
Business Sound, Inc.
EXHIBIT B
---------
Xxxxx Xxxxxxxxxxxx
------------------
MLP Environmental Music, LLC
EXHIBIT C
---------
Form of Opinion of Xxxxxxxx & Xxxxx
-----------------------------------
Opinion, dated the Closing Date and addressed to the Initial Purchasers, of
Xxxxxxxx & Xxxxx, counsel to the Issuers, to the effect that:
EXHIBIT D
---------
Form of Opinion of Xxxx, Gotshal & Xxxxxx, LLP
----------------------------------------------
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Weil, Gotshal & Xxxxxx, LLP, counsel to Old Muzak, to the effect
that:
(i) Old Muzak has been duly formed, is validly existing in good
standing as a limited partnership under the laws of its jurisdiction of
formation, with the requisite power and authority to own its properties and
conduct its business as now conducted as described in the Final Memorandum
and is duly qualified to do business as a foreign partnership in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, have a Material Adverse Effect.
(ii) Old Muzak has the requisite limited partnership power and
authority to execute, deliver and perform its obligations under the
Transaction Documents to which it is a party. The Transaction Documents
have been duly and validly authorized by Old Muzak to the extent a party
thereto and, when executed and delivered by the other parties thereto, will
constitute valid and legally binding agreements of Old Muzak, enforceable
against Old Muzak in accordance with their terms except that the
enforcement thereof may be limited by the Enforceability Exceptions and
except as any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations.
(iii) No consent, approval, authorization, license, qualification,
exemption or order of any court or governmental agency or body or third
party is required for the performance of the Transaction Document by Old
Muzak or for the consummation by Old Muzak of any of the Transactions or
any of the other transactions contemplated thereby; all such consents,
approvals, authorizations, li-
-2-
censes, qualifications, exemptions and orders set forth in the Final
Memorandum which are required to be obtained by the Closing Date have been
obtained or made, as the case may be, and are in full force and effect and
not the subject of any pending or, to the best knowledge of such counsel,
threatened attack by appeal or direct proceeding or otherwise.
(iv) The execution, delivery and performance of the Transaction
Documents and the consummation of the Transactions and the other
transactions contemplated thereby and by the Final Memorandum and the
fulfillment of the terms thereof will not (a) violate, conflict with or
constitute or result in a breach of or a default under (or an event that,
with notice or lapse of time, or both, would constitute a breach of or a
default under) any of (i) the terms or provisions of any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to
which Old Muzak is a party or to which any of their respective properties
or assets are subject, (ii) the certificate of formation or limited
partnership agreement of Old Muzak or (iii) (assuming compliance with all
applicable state securities or "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or
other body applicable to Old Muzak or any of its properties or assets or
(b) result in the imposition of any lien upon or with respect to any of the
properties or assets of Old Muzak, which violation, conflict, breach,
default or lien would, individually or in the aggregate, have a Material
Adverse Effect.
