EXHIBIT 5.3
[LETTERHEAD OF HELLER ERHMAN WHITE & MCAULIFFE]
September 13, 1999
Muzak LLC
2901 Third Avenue, Suite 400
Seattle, Washington 98121
Re: Guarantee of Muzak LLC's Exchange Note Obligations
Ladies and Gentlemen:
We have acted as counsel to MLP Environmental Music, LLC, a Washington
limited liability company (the "Washington Guarantor") in connection with that
certain Guarantee executed and delivered by the Washington Guarantor and certain
other parties (the "Guarantee") related to up to $115,000,000 in aggregate
principal amount of 9-7/8% Senior Subordinated Notes due 2009 (the "Exchange
Notes") to be issued by Muzak LLC, a Delaware limited liability company (the
"Company") pursuant to a Registration Statement on Form S-4 (Registration No.
333-78571) originally filed with the Securities and Exchange Commission (the
"Commission") on May 17, 1999, under the Securities Act of 1933, as amended (the
"Act") (such Registration Statement, as amended or supplemented, is hereinafter
referred to as the "Registration Statement"). The Exchange Notes and the
Guarantee are to be issued pursuant to the Indenture (as supplemented, the
"Indenture"), dated as of March 18, 1999, among the Company and Muzak Finance
Corp., a Delaware corporation, as issuers, Muzak Capital Corporation, a Delaware
corporation, the Washington Guarantor, Business Sound, Inc., an Ohio
corporation, and Muzak Holdings LLC, a Delaware limited liability company, as
guarantors, and State Street Bank and Trust Company, as Trustee, in exchange for
and in replacement of the Company's outstanding 9-7/8% Senior Subordinated Notes
due 2009, of which $115,000,000 in aggregate principal amount is outstanding.
You have requested our opinion in connection with the Washington Guarantor's
guarantee of the obligations of the Company under the Exchange Notes. Our
representation of the Washington Guarantor in these matters has been solely for
the purpose of rendering this opinion, and we have not participated in the
negotiation or preparation of any of the documents relating to the transaction
which is the subject of this opinion.
I.
We have assumed the authenticity of all records, documents and instruments
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all records,
documents and instruments submitted to us as copies. We have based our opinion
upon our review of the following records, documents, instruments and
certificates and such additional certificates relating to factual matters as we
have deemed necessary or appropriate for our opinion:
(a) The Indenture;
(b) The Guarantee;
Muzak LLC
September 13, 1999
(c) The Certificate of Formation of the Washington Guarantor certified by
the Washington Secretary of State, and certified to us by an officer
of the Washington Guarantor as being complete and in full force and
effect as of the date of this opinion;
(d) The Limited Liability Company Agreement of the Washington Guarantor
certified to us by an officer of the Washington Guarantor as being
complete and in full force and effect as of the date of this opinion;
(e) Records certified to us by an officer of the Washington Guarantor as
constituting all records of proceedings and actions of the manager and
the member of the Washington Guarantor relating to the transactions
contemplated by the Guarantee and the Indenture;
(f) A Certificate of Existence/Authorization relating to the Washington
Guarantor issued by the Washington Secretary of State;
Our opinion expressed in Paragraph 1 of Part III as to the formation and
existence of the Washington Guarantor under the laws of the State of Washington
is based solely upon the Certificates of Formation and Existence/Authorization
enumerated above. We have made no additional investigation after the respective
dates of those Certificates in rendering our opinion expressed in Paragraph 1 of
Part III.
Where our opinion relates to our "knowledge," that knowledge is based upon
our examination of the records, documents, instruments and certificates
enumerated or described above and the actual contemporaneous knowledge of
attorneys in this firm who are currently involved in legal representation of the
Company and the Washington Guarantor in connection with the Indenture. We have
not examined any records of any court, administrative tribunal or other similar
entity in connection with our opinion.
II.
We express no opinion as to:
A. The applicable choice of law rules that may affect the interpretation
or enforcement of the Guarantee or the Indenture.
B. Any securities, tax, anti-trust, land use, safety, environmental or
hazardous materials laws, rules or regulations or laws, rules or regulations
applicable to the Company.
C. The effect on the Washington Guarantor's obligations, and the
Company's rights, under the Indenture and Guarantee of laws relating to
fraudulent transfers and fraudulent obligations set forth in Sections 544 and
548 of the federal Bankruptcy Code and Chapter 19.40 of the Revised Code of
Washington.
This opinion is limited to the federal laws of the United States of America
and the laws of the State of Washington and the Washington case law decided
thereunder, and we disclaim any opinion as to the laws of any other
jurisdiction. We further disclaim any opinion as to any statute, rule,
regulation, ordinance, order or other promulgation of any local governmental
body or as to any related judicial or administrative opinion interpreting any
statute, rule, regulation, ordinance, order or other promulgation of any local
governmental body.
Muzak LLC
September 13, 1999
III.
Based upon the foregoing and our examination of such questions of law as we
have deemed necessary or appropriate for the purpose of our opinion, and subject
to the limitations and qualifications expressed below, it is our opinion that:
1. The Washington Guarantor has been duly formed and is validly existing
as a limited liability company under the laws of the State of
Washington.
2. The Washington Guarantor has all requisite limited liability company
power and limited liability company authority to enter into and
perform its obligations under the Indenture and the Guarantee, to own
its properties and to carry on its business as, to our knowledge, it
is now conducted.
3. The Indenture and the Guarantee have been duly authorized by all
necessary limited liability company action on the part of the
Washington Guarantor, and the Indenture and the Guarantee have been
duly executed and delivered on behalf of the Washington Guarantor.
4. Neither the execution and delivery of the Indenture or the Guarantee
on behalf of the Washington Guarantor nor the consummation by the
Washington Guarantor of the Guarantee as provided in the Indenture (i)
conflicts with any provision of the Certificate of Formation or
Limited Liability Company Agreement of the Washington Guarantor or
(ii) violates any law applicable to the Washington Guarantor.
IV.
We further advise you that:
A. As noted, the enforceability of the Guarantee and the Indenture is
subject to the effect of general principles of equity. These
principles include, without limitation, concepts of commercial
reasonableness, materiality and good faith and fair dealing. As
applied to the Guarantee and the Indenture, these principles will
require you to act reasonably, in good faith and in a manner that is
not arbitrary or capricious in the administration and enforcement of
the Guarantee and the Indenture and will preclude you from invoking
penalties for defaults that bear no reasonable relation to the damage
suffered or that would otherwise work a forfeiture.
B. The enforceability of the Guarantee and the Indenture are subject to
the effects of (i) Revised Code of Washington ("RCW") Section 62A.1-
102, which provides that obligations of good faith, diligence,
reasonableness and care prescribed by the Washington Uniform
Commercial Code (RCW Title 62A) may not be disclaimed by agreement,
although the parties may by agreement determine the standards by which
the performance of such obligations is to be measured if those
standards are not manifestly unreasonable, (ii) RCW 62A.1-203, which
imposes an obligation of good faith in the performance or enforcement
of a contract and (iii) legal principles under which a court may
refuse to enforce, or may limit the enforcement of, a contract or any
clause of a contract that a court finds as a matter of law to have
been unconscionable at the time it was made.
Muzak LLC
September 13, 1999
C. The effectiveness of indemnities, rights of contribution, exculpatory
provisions and waivers of the benefits of statutory provisions may be
limited on public policy grounds.
D. Pursuant to RCW 4.84.330, any provision in an agreement requiring a
party to pay another party's attorneys' fees and costs in actions to
enforce the provisions of such agreement will be construed to entitle
the prevailing party in any action, whether or not that party is the
specified party, to be awarded its reasonable attorneys' fees, costs
and necessary disbursements.
E. Provisions of the Guarantee or the Indenture requiring that waivers
must be in writing may not be binding or enforceable if a non-
executory oral agreement has been created modifying any such provision
or an implied agreement by trade practice or course of conduct has
given rise to a waiver.
F. The enforceability of the Guarantee and the Indenture may be subject
to Washington case law to the effect that a guarantor may be
exonerated if the beneficiary of the guaranty alters the original
obligation of the principal, fails to inform the guarantor of material
information pertinent to the principal or any collateral, elects
remedies that may impair the subrogation rights of the guarantor
against the principal or that may impair the value of any collateral,
fails to accord the guarantor the protections afforded a debtor under
Article 9 of the Washington Uniform Commercial Code or otherwise takes
any action that materially prejudices the guarantor unless, in any
such case, the guarantor validly waives such rights or the
consequences of any such action. See, e.g., Warren v. Washington Trust
Bank, 92 Wash. 2d 381, 598 P.2d 701 (1979); Franco v. Peoples Nat'l
Bank of Washington, 39 Wash. App. 381; 693 P.2d 200 (1984); MGIC
Financial Corp. v. H.A. Briggs Co., 24 Wash. App. 1, 600 P.2d 573
(1979). While express and specific waivers of a guarantor's right to
be exonerated, such as those contained in the Guarantee and the
Indenture, are generally enforceable under Washington law, we express
no opinion as to whether the Guarantee or the Indenture contains an
express and specific waiver of each exoneration defense a guarantor
might assert or as to whether each of the waivers contained in the
Guarantee or the Indenture is fully enforceable.
V.
This opinion is rendered to you in connection with the Guarantee and the
Indenture and is for the benefit of you and the holders or noteholders or any
investor in, or beneficial owner of, the Exchange Notes in connection with the
filing of the Registration Statement with the Commission. Except as so provided,
this opinion letter may not be relied upon by any other person, firm,
corporation or other entity without our prior written consent, except that
Kirkland & Ellis may rely upon this opinion letter to the same extent as if it
were an addressee hereof. We disclaim any obligation to advise you of any change
of law that occurs, or any facts of which we become aware, after the date of
this opinion.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.3 to the Registration Statement.
Very truly yours,
/s/ Heller Ehrman White & McAuliffe