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EXECUTION COPY
CLASSIC CABLE, INC.
9 3/8% SENIOR SUBORDINATED NOTES DUE 2009
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PURCHASE AGREEMENT
July 21, 1999
Xxxxxxx, Xxxxx & Co.,
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Classic Cable, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of $150.0
million principal amount of the 9 3/8% Senior Subordinated Notes due 2009 (the
"Securities") of the Company. The Securities will be unconditionally guaranteed
as to the payment of principal, premium, if any, and interest (the "Guarantees")
by each of the entities named in Schedule II hereto (each a "Guarantor" and,
collectively, the "Guarantors").
The Notes are being issued and sold in connection with a Securities
Purchase Agreement (the "Securities Purchase Agreement") dated as of May 11,
1999, as amended, by and among the Company and Xxxxxx Group, Inc., a Delaware
corporation ("Xxxxxx") and the sellers named therein. The Securities Purchase
Agreement provides that, subject to certain conditions as described therein, the
Company will, directly or indirectly, acquire all of the outstanding capital
stock of Xxxxxx (the "Acquisition") for a purchase price of approximately $300.0
million in cash (the "Securities Purchase Consideration").
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The proceeds to the Company from the sale to the Purchasers of the
Notes (the "Proceeds") will be used to partially fund the Securities Purchase
Consideration. In addition to the Proceeds, the Company will generate funding
for the Acquisition through (i) borrowings under a credit facility (the "New
Credit Facility") with the financial institutions which are party thereto (the
"Lenders") and Xxxxxxx Sachs Credit Partners L.P., as agent for the Lenders, to
be entered into concurrently with the closing of the Acquisition and (ii) an
equity contribution from Brera Classic, L.L.C. ("Brera") to Classic
Communications, Inc., a Delaware corporation and the Company's direct parent
("CCI"), which will then be contributed, after deducting fees, to the Company by
CCI.
1. Each of the Company and the Guarantors, jointly and severally,
represents and warrants to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated July 7,1999 (the
"Preliminary Offering Circular") and an offering circular, dated July
21, 1999 (the "Offering Circular"), in each case including the
international supplement thereto, have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary
Offering Circular or the Offering Circular shall be deemed to refer to
and include any Additional Issuer Information (as defined in Section
5(f)) furnished by the Company prior to the completion of the
distribution of the Securities. The Preliminary Offering Circular or
the Offering Circular and any amendments or supplements thereto did not
and will not, as of their respective dates, contain an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Purchaser through Xxxxxxx,
Sachs & Co. expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has, and
after giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement will have, sustained since the date of
the latest audited financial statements included in the Offering
Circular any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not been, and
after giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement will not be, any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any material adverse change in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have, and after giving
effect to the Acquisition pursuant to the terms of the Securities
Purchase Agreement will have, good and marketable title in fee simple
to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering
Circular or such as do not, in the aggregate, materially affect the
value of such property and do not, in the aggregate, materially
interfere with the
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use made and proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;
(d) The Company has been, and after giving effect to the
Acquisition pursuant to the terms of the Securities Purchase Agreement
will be, duly incorporated and is validly existing as a corporation in
good standing under the laws of Delaware, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Circular, and has been, and after giving
effect to the Acquisition pursuant to the terms of the Securities
Purchase Agreement will be, duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each subsidiary of the
Company has been, and after giving effect to the Acquisition pursuant
to the terms of the Securities Purchase Agreement will be, duly
organized and is validly existing in good standing under the laws of
its jurisdiction of organization;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been, and after giving effect to the Acquisition
pursuant to the terms of the Securities Purchase Agreement will be,
duly and validly authorized and issued and are and will be fully paid
and non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been, and after giving effect to
the Acquisition pursuant to the terms of the Securities Purchase
Agreement will be, duly and validly authorized and issued, are and will
be fully paid and non-assessable and (except for directors' qualifying
shares and except as otherwise set forth in the Offering Circular) are
and will be owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
(f) The Securities have been duly authorized by the Company and,
when issued and delivered pursuant to this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture to be dated as of July 28, 1999 (the
"Indenture") between the Company and Chase Bank of Texas, National
Association, as Trustee (the "Trustee"), under which they are to be
issued, which will be substantially in the form previously delivered to
you; the Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee, the Indenture will constitute
a valid and legally binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the Indenture will
conform in all material respects to the descriptions thereof in the
Offering Circular and will be in substantially the form previously
delivered to you;
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(g) The Guarantees have been duly authorized and, upon the due
authorization, issuance and delivery of the related Securities and the
due endorsement of the Guarantees thereon, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of such Guarantor entitled to the
benefits provided by the Indenture under which they are to be issued,
and the Guarantees will conform in all material respects to the
description thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(h) The exchange and registration rights agreement, to be dated
as of July 28, 1999 (the "Registration Rights Agreement"), between the
Company, the Guarantors and the Purchasers has been duly authorized by
the Company and each of the Guarantors and, when executed and delivered
by the Company and each Guarantor, the Registration Rights Agreement
will constitute a valid and legally binding instrument of the Company
and each Guarantor, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles. Pursuant to the Registration
Rights Agreement, the Company and the Guarantors will agree to file
with the Commission, under the circumstances set forth therein, (i) a
registration statement under the United States Securities Act of 1933,
as amended (the "Act"), relating to another series of debt securities
of the Company with terms substantially identical to the Securities
(the "Exchange Securities") to be offered in exchange for the
Securities (the "Exchange Offer"), (ii) to the extent required by the
Registration Rights Agreement, a shelf registration statement pursuant
to Rule 415 of the Act relating to the resale by certain holders of the
Securities and (iii) to the extent required by the Registration Rights
Agreement, a market making registration statement, and in each case, to
use its reasonable best efforts to cause such registration statements
to be declared effective. The Exchange Securities have been duly
authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture will be the
valid and legally binding obligations of the Company, entitled to the
benefits provided by the Indenture, enforceable against the Company in
accordance with their terms. The Guarantees with respect to the
Exchange Securities have been duly authorized for issuance by each
Guarantor, and when issued in accordance with the terms of the
Indenture will be the valid and legally binding obligations of such
Guarantor, entitled to the benefits provided by the Indenture,
enforceable in accordance with their terms. The Registration Rights
Agreement, the Exchange Securities and the Guarantees with respect to
the Exchange Securities will conform, in all material respects, to the
descriptions thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(i) The New Credit Facility has been duly authorized by the
Company and, when executed and delivered by the Company and the
subsidiaries of the Company that are obligors thereunder, the New
Credit Facility will constitute a valid and legally binding instrument
of the Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
New Credit Facility will conform in all material respects to the
descriptions thereof in the Offering Circular;
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(j) The Securities Purchase Agreement has been duly authorized,
executed and delivered by the Company, constitutes a valid and legally
binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities Purchase Agreement conforms to the
descriptions thereof in the Offering Circular;
(k) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U, and X of the Board of
Governors of the Federal Reserve System;
(l) Prior to the date hereof, none of the Company, the
Guarantors nor any of their respective affiliates have taken any action
which is designed to or which has constituted or which might have been
expected to cause or result in stabilization or manipulation of the
price of any security of the Company or any Guarantor in connection
with the offering of the Securities and the Guarantees;
(m) The issue and sale of the Securities and the Guarantees and
the compliance by the Company and the Guarantors with all of the
provisions of the Securities, the Guarantees, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is, or after giving effect to
the Acquisition pursuant to the terms of the Securities Purchase
Agreement will be, a party or by which the Company or any of its
subsidiaries is, or after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will be, bound or to
which any of the property or assets of the Company or any of its
subsidiaries is, or after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will be, subject (except
such as will not individually or in the aggregate have a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any Guarantor or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties (other than immaterial FCC and local franchise
authority requirements); and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities and the Guarantees or the consummation by the Company and
the Guarantors of the transactions contemplated by this Agreement, the
Registration Rights Agreement or the Indenture, except for the filing
of a registration statement by the Company with the Commission pursuant
to the Act pursuant to Section 5(k) hereof and qualification of the
Indenture under the Trust Indenture Act of 1939 (the "TIA") and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Purchasers;
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(n) Neither the Company nor any of its subsidiaries is, and
after giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement neither the Company nor any of its
subsidiaries will be, in violation of its Certificate of Incorporation
or By-laws or in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, except for such default that would not have a Material Adverse
Effect;
(o) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities and under the captions
"Legislation and Regulation", "Certain Relationships and Related
Transactions", "Description of Other Indebtedness", "Certain United
States Federal Income Tax Considerations" and "Underwriting", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete in all material
respects;
(p) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is, and after giving effect to the Acquisition
pursuant to the terms of the Securities Purchase Agreement will be, a
party or to which any property of the Company or any of its
subsidiaries is, and after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will be, the subject
which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to individually or in the
aggregate have a material adverse effect on the general affairs,
management, the current or future financial position, business,
stockholders' equity or results of operations of the Company and its
subsidiaries (a "Material Adverse Effect"); and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(q) When the Securities and the Guarantees are issued and
delivered pursuant to this Agreement, neither the Securities nor the
Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as securities of the Company or the Guarantors which are
listed on a national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system;
(r) Each of the Company and the Guarantors is not, and after
giving effect to the offering and sale of the Securities and after
giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement, will not be an "investment company", as
such term is defined in the United States Investment Company Act of
1940, as amended (the "Investment Company Act");
(s) None of the Company, the Guarantors or any person acting on
its or their behalf (other than the Purchasers and their affiliates as
to whom the Company and the Guarantors make no representation) has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Act or,
with respect to Securities and Guarantees sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902
under the Act and the Company, the Guarantors, any affiliate of the
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Company or the Guarantors and any person acting on its or their behalf
(other than the Purchasers and their affiliates as to whom the Company
and the Guarantors make no representation) has complied with and will
implement the "offering restriction" within the meaning of such Rule
902;
(t) Within the preceding six months none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor (other than the Purchasers and their affiliates as to whom
the Company and the Guarantors make no representation) has offered or
sold to any person any Securities or Guarantees, or any securities of
the same or a similar class as the Securities or Guarantees, other than
Securities and Guarantees offered or sold to the Purchasers hereunder.
The Company and the Guarantors will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Securities, any Guarantee or any substantially similar
security issued by the Company or any Guarantor, within six months
subsequent to the date on which the distribution of the Securities and
the Guarantees has been completed (as notified to the Company by
Xxxxxxx, Xxxxx & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer
and sale of the Securities and the Guarantees in the United States and
to U.S. persons contemplated by this Agreement as transactions exempt
from the registration provisions of the Act;
(u) Ernst & Young, LLP who have certified certain financial
statements of the Company and its subsidiaries, and KPMG LLP, who have
certified certain financial statements of Xxxxxx and its subsidiaries,
are each independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(v) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material Adverse
Effect. The "Year 2000 Problem" as used herein means any significant
risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000;
(w) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, and after giving effect to the Acquisition
pursuant to the terms of the Securities Purchase Agreement will own or
possess, or be able to acquire on reasonable terms, adequate patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them, or operated by them after giving effect to the
Acquisition, except as would not result in a Material Adverse Effect,
and neither the Company nor any of its subsidiaries
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has received, and after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will have received, any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or
of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company
or any of its subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect;
(x) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of (collectively,
"authorizations"), any court or governmental authority or agency
(including the Federal Communications Commission (the "FCC")) is
necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or the Securities Purchase
Agreement (other than filings which have been made and authorizations
which have been obtained in the case of the Securities Purchase
Agreement and other than immaterial FCC and local franchise authority
requirements); except for the filing of a registration statement by the
Company with the Commission pursuant to the Act pursuant to Section
5(k) hereof and qualification of the Indenture under the TIA and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Purchasers;
(y) The Company and its subsidiaries possess, and after giving
effect to the Acquisition pursuant to the terms of the Securities
Purchase Agreement will possess, such permits, franchises, licenses
(including licenses of the FCC), approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess such Governmental Licenses would not have
a Material Adverse Effect; the Company and its subsidiaries are, and
after giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement will be, in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect;
(z) The Company and its subsidiaries have filed, and after
giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement will have filed, all federal, state,
local and foreign tax returns that are required to be filed or have
duly requested extensions thereof and have paid all material taxes
required to be paid by any of them and any related assessments, fines
or penalties, except for any such tax, assessment, fine or penalty that
is being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements, together with the related schedules and notes,
included in the Offering Circular in respect of
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all material federal, state, local and foreign taxes for all periods as
to which the tax liability of the Company or any of its subsidiaries
has not been fully determined or remains open to examination by
applicable taxing authorities;
(aa) Except as described in the Offering Circular and except as
such matters as would not, singly or in the aggregate, result in a
Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries is, and after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will be, in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (ii) the Company and its subsidiaries have, and after giving
effect to the Acquisition pursuant to the terms of the Securities
Purchase Agreement will have, all permits, authorizations and approvals
required under any applicable Environmental Laws and are each, and
after giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement will each be, in compliance with their
requirements, (iii) there are, and after giving effect to the
Acquisition pursuant to the terms of the Securities Purchase Agreement
there will be, no pending or to the Company's knowledge threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Laws against
the Company or any of its subsidiaries and (iv) there are, and after
giving effect to the Acquisition pursuant to the terms of the
Securities Purchase Agreement there will be, no events or circumstances
that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
Environmental Laws;
(bb) The Company and its subsidiaries carry or are entitled to
the benefits of, and after giving effect to the Acquisition pursuant to
the terms of the Securities Purchase Agreement will carry or be
entitled to the benefits of, insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and
effect in all material respects;
(cc) The Company is, and after giving effect to the Acquisition
pursuant to the terms of the Securities Purchase Agreement will be,
Solvent. As used herein, the term "Solvent" means, with respect to the
Company on a particular date, that on such date (i) the fair market
value of the assets of the Company is greater than the total amount of
liabilities (including contingent liabilities) of the Company, (ii) the
present fair salable value of the assets of the Company is greater than
the amount that will be required to pay the probable liabilities of the
Company on its debts as they become absolute and matured, (iii) the
Company is able to
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realize upon its assets and pay its debts and other liabilities,
including contingent obligations, as they mature, and (iv) the Company
does not have unreasonably small capital; and
(dd) The Company is not in default under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument constituting Senior Debt (as defined in the Indenture) or
under the Securities Purchase Agreement, except for defaults of the
Company or any of its subsidiaries that would not have a Material
Adverse Effect.
2. Subject to the terms and conditions herein set forth, the Company
and the Guarantors agree to issue and sell to each of the Purchasers, and each
of the Purchasers agrees, severally and not jointly, to purchase from the
Company and the Guarantors, at a purchase price of 97.25% of the principal
amount thereof, plus accrued interest, if any, from July 28, 1999 to the Time of
Delivery hereunder, the principal amount of Securities (including the Guarantees
thereof) set forth opposite the name of such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities and
the Guarantees, the several Purchasers propose to offer the Securities for sale
upon the terms and conditions set forth in this Agreement and the Offering
Circular, and each Purchaser hereby represents and warrants to, and agrees with
the Company and the Guarantors that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities and Guarantees by any form
of general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form,
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company and the Guarantors will
deliver the Securities and the Guarantees to Xxxxxxx, Xxxxx & Co., for the
account of each Purchaser, against payment by or on behalf of such Purchaser of
the purchase price therefor by wire transfer of Federal (same day) funds to an
account designated by the Company, by causing DTC to credit the Securities to
the account of Xxxxxxx, Sachs & Co. at DTC. The Company and the Guarantors will
cause the certificates representing the Securities to be made available to
Xxxxxxx, Xxxxx & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on July 28, 1999 or such other time and date
as Xxxxxxx, Sachs & Co. and the Company may agree upon in writing. Such time and
date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional
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documents requested by the Purchasers pursuant to Section 7(i) hereof, will be
delivered at such time and date at the offices of Xxxxxxxx Xxxxxxxx & Xxxxxx
P.C., 5400 Renaissance Tower, 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000-0000 (the
"Closing Location"), and the Securities and Guarantees will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 3:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. Each of the Company and the Guarantors, jointly and severally,
agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Company nor
any Guarantor shall be required to qualify as a foreign corporation or subject
itself to taxation in respect of doing business or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with five copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the expiration of nine months after the
date of the Offering Circular, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company or any Guarantor that are substantially similar to the
Securities or the Guarantees; except to the extent required by existing
registration rights agreements;
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(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act;
(g) If requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), to make available to holders of the Securities consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(i) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to holders of Securities of the Company or any of
the Guarantors, and to deliver to you (i) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any securities exchange on which the Securities or any class of
securities of the Company or the Guarantors is listed; and (ii) such additional
information concerning the business and financial condition of the Company or
the Guarantors as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(j) During a period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Act) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by them;
(k) The Company and the Guarantors shall file and use its best efforts
to cause to be declared or become effective under the Act, on or prior to 210.
days after the Time of Delivery, a registration statement on Form S-4 providing
for the registration of the Exchange Securities and the Guarantees thereon, and
the exchange of the Securities for the Exchange Securities, all in a manner
which will permit persons who acquire the Exchange Securities to resell the
Exchange Securities pursuant to Section 4(1) of the Act; and
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
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6. Each of the Company and the Guarantors, jointly and severally,
covenants and agrees with the several Purchasers that the Company and the
Guarantors will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel and
accountants in connection with the issue of the Securities and all other
expenses in connection with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Indenture, the Registration Rights
Agreement, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities and Guarantees;
(iii) all expenses in connection with the qualification of the Securities and
the Exchange Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Purchasers in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities and the Exchange Securities; (v) the
cost of preparing the Securities, the Exchange Securities and the Guarantees
with respect thereto; (vi) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities; (vii)
any cost incurred in connection with the designation of the Securities for
trading in PORTAL; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and the Guarantors herein are, at and as of the
Time of Delivery, true and correct, the condition that the Company and the
Guarantors shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect to the
matters covered in paragraphs (i), (vii), (viii), (ix), (x), (xi), (xii), (xx)
and (xxi) of subsection (b) below as well as such other related matters as you
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(b) Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for the Company, shall
have furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Offering Circular;
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(ii) The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each subsidiary of the Company has been duly organized and
is validly existing as a corporation, limited liability company or
limited partnership, in good standing under the laws of its
jurisdiction of organization; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except for directors'
qualifying shares and except as otherwise set forth in the Offering
Circular) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(v) To the best of such counsel's knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors;
(vii) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Offering Circular; The Securities have been
duly authorized by the Company; the temporary global Security has been
duly executed, authenticated, issued and delivered and constitutes a
valid and legally binding obligation of the Company entitled to the
benefits provided by the Indenture; the Securities in definitive form,
when executed, authenticated, issued and delivered in exchange for the
temporary global Security in accordance with the terms of the
Indenture, will have been duly executed, authenticated,
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issued and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the temporary global Security and the Indenture conform,
and the Securities will conform, to the descriptions thereof in the
Offering Circular;
(viii) The Guarantees have been duly authorized, executed,
issued and delivered and constitute valid and legally binding
obligations of the Guarantors entitled to the benefits provided by the
Indenture; and the Guarantees conform in all material respects to the
descriptions thereof in the Offering Circular;
(ix) The Exchange Securities have been duly authorized;
(x) The Guarantees with respect to the Exchange Securities have
been duly authorized;
(xi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(xii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the parties thereto and
constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(xiii) The New Credit Facility has been duly authorized,
executed and delivered by the parties thereto and constitutes a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xiv) The Securities Purchase Agreement has been duly
authorized, executed and delivered by the parties thereto and
constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(xv) The issue and sale of the Securities and the Guarantees and
the compliance by the Company and the Guarantors with all of the
provisions of the Securities, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other material agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the
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Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws, or
Certificate of Limited Liability Company or Limited Liability Company
Agreement, or Certificate of Limited Partnership or Limited Partnership
Agreement, of the Company or any Guarantor or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
(xvi) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities and the
Guarantees or the consummation by the Company and the Guarantors of the
transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Purchasers;
(xvii) The statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities and under the
captions "Certain Relationships and Related Transactions", "Description
of Other Indebtedness", "Certain United States Federal Income Tax
Considerations" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate and complete in all material respects;
(xviii) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939 with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Purchasers in the manner
contemplated by this Agreement;
(xix) Such counsel have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements therein, as to which such counsel need express no opinion)
contained as of its date or contains as of the Time of Delivery an
untrue statement of a material fact or omitted or omits, as the case
may be, to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xx) Each of the Company and the Guarantors is not an
"investment company", as such term is defined in the Investment Company
Act; and
(xxi) Except as set forth in the Offering Circular, each of the
Company and its subsidiaries has all of the licenses, permits,
franchises and authorizations required by each state in which it
operates, or the political subdivisions thereof, for the provision of
cable television services (as such counsel understands service to be
provided which may be based on a certificate of an officer of the
Company, provided that such counsel shall state that they believe that
both the Purchasers and such counsel are justified in relying on such
certificate), where the failure to obtain or hold such license, permit,
franchise or authorization would have a Material Adverse Effect.
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(c) Cole Raywid & Xxxxxxxxx, regulatory counsel for the Company, shall
have furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The statements set forth in the Offering Circular under the
caption "Legislation and Regulation," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects;
(ii) The Company and its subsidiaries operate cable television
systems which serve the communities listed on Attachment 1 hereto. Each
such community has been registered with the FCC;
(iii) The Company and its subsidiaries hold the FCC licenses set
forth on Attachment 1 hereto, each of which is in full force and
effect, and each of the Company and its subsidiaries have fulfilled and
performed all material obligations with respect thereto. To the best of
our knowledge, these are the only FCC licenses which are presently
necessary to the business of the Company and its subsidiaries as now
conducted, except for those licenses that are not material to the
Company. To the best of our knowledge, no condition exists or event has
occurred which permits or which after lapse of time or the giving of
notice or both would permit the suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any FCC license set forth on
Attachment 1. To the best of our knowledge, neither the Company nor any
of its subsidiaries has received written notice of any violation or
institution of any cease and desist proceeding with respect thereto;
(iv) Except with respect to general rulemakings and similar
matters relating generally to the cable television industry, there is
no action, suit or proceeding pending at the FCC, or, to the best of
our knowledge after due investigation with respect thereto, any inquiry
or investigation by the FCC pending or proceeding threatened by the FCC
against or affecting the Company or any of its subsidiaries which might
have Material Adverse Effect upon the Company and its subsidiaries or
the operation of the cable systems of the Company and its subsidiaries;
and
(v) The execution, delivery and performance by the Company of
the Purchase Agreement, the Registration Rights Agreement, the
Indenture, the Notes and the New Senior Credit Agreement and the
consummation of the Acquisition do not require the approval of the FCC
and will not result in any violation of the Communications Act of 1934,
as amended, or any rule or regulation of the FCC; provided however,
that prior FCC approval is required for the transfer of control of FCC
licenses, and prior FCC approval or filing may be required to foreclose
upon certain of the collateral pledged under the New Senior Credit
Agreement, and provided further, that the secured parties under the New
Senior Credit Agreement comply with the Communications Act and the
rules and regulations of the FCC, including, but not limited to,
ownership restrictions with respect to the ownership of the pledged
collateral.
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Ernst & Young, LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
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(e) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, KPMG LLP shall have furnished to you
a letter or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex II hereto;
(f) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Xxxxxx Xxxxxxxx & Xxxxxxxxx shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you;
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in Clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's and any Guarantors' debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
and any Guarantors' debt securities;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iii) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and in
the manner contemplated in the Offering Circular; or (iv) the occurrence of any
material adverse change in the existing, financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Representatives, would materially and adversely affect the financial markets or
the markets for the Securities and other debt securities;
(j) The Securities have been designated for trading on PORTAL;
(k) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company and the
Guarantors satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Guarantors herein at and as
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of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (g) and (h) of this Section and as to
such other matters as you may reasonably request;
(l) The Company shall have entered into the New Credit Facility (the
form and substance of which shall be acceptable to the Purchasers) and the
Purchasers shall have received copies of counterparts, conformed as executed
thereof and of all other documents and agreements entered into in connection
therewith;
(m) The Company shall have entered into the Securities Purchase
Agreement (the form and substance of which shall be acceptable to the
Purchasers) and the Purchasers shall have received counterparts, conformed as
executed thereof and of all other documents and agreements entered into in
connection therewith. The Securities Purchase Agreement shall be in full force
and effect, all conditions thereto shall have been satisfied, and no condition
shall have been waived without the express consent of Xxxxxxx, Sachs & Co.,
which consent shall not be unreasonably withheld; and
(n) CCI shall have received an equity contribution from Brera Classic,
L.L.C. and shall have contributed such funds to the Company as set forth in the
Offering Circular.
8. (a) The Company and each Guarantor will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which such Purchaser may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such action or claim as such expenses are incurred; provided,
however, that neither the Company nor any Guarantor shall be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company and the
Guarantors against any losses, claims, damages or liabilities to which the
Company and any Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein; and will reimburse the Company and the Guarantors for any legal or
other
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expenses reasonably incurred by the Company and the Guarantors in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and the Purchasers on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors on the one hand and the Purchasers on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Guarantors bear to the total underwriting discounts and commissions received by
the Purchasers, in each case as set forth in the Offering Circular. The relative
fault 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 Company
and the Guarantors on the one hand or
20
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the Purchasers on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Purchasers agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to investors were offered to investors exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Act; and the obligations of the Purchasers under this Section 8
shall be in addition to any liability which the respective Purchasers may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company or any Guarantor and to each person, if any,
who controls the Company or any Guarantor within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting
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Purchaser to purchase its pro rata share (based on the principal amount of
Securities which such Purchaser agreed to purchase hereunder) of the Securities
of such defaulting Purchaser or Purchasers for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company and the Guarantors, except for the expenses to be borne
by the Company, the Guarantors and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Guarantors and the several Purchasers,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, the Guarantors or any officer or director or controlling person of the
Company or a Guarantor, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities (including the Guarantees with respect thereto) are not delivered by
or on behalf of the Company and the Guarantors as provided herein, the Company
and the Guarantors will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary, with a copy to Brera, 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000; provided, however, that any notice to a Purchaser
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Purchaser at its address set forth in its
Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied
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to the Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company, the Guarantors and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and the Guarantors and each person who controls the Company, a Guarantor or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
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Very truly yours,
CLASSIC CABLE, INC.
By:
--------------------------------------------
Name:
Title:
CLASSIC CABLE HOLDING, INC.
By:
--------------------------------------------
Name:
Title:
PONCA HOLDINGS, INC.
By:
--------------------------------------------
Name:
Title:
CLASSIC TELEPHONE, INC.
By:
--------------------------------------------
Name:
Title:
UNIVERSAL CABLE HOLDINGS, INC.
By:
--------------------------------------------
Name:
Title:
UNIVERSAL CABLE COMMUNICATIONS INC.
By:
--------------------------------------------
Name:
Title:
25
UNIVERSAL CABLE OF BEAVER, OKLAHOMA, INC.
By:
--------------------------------------------
Name:
Title:
UNIVERSAL CABLE MIDWEST, INC.
By:
--------------------------------------------
Name:
Title:
WT ACQUISITION CORPORATION
By:
--------------------------------------------
Name:
Title:
W.K. COMMUNICATIONS, INC.
By:
--------------------------------------------
Name:
Title:
TELEVISION ENTERPRISES, INC.
By:
--------------------------------------------
Name:
Title:
BLACK CREEK MANAGEMENT, L.L.C.
By:
--------------------------------------------
Name:
Title:
BLACK CREEK COMMUNICATIONS, L.P.
By:
--------------------------------------------
Name:
Title:
26
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
BY:
------------------------------------------------------
(XXXXXXX, SACHS & CO)
On behalf of each of the Purchasers
27
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- ---------
Xxxxxxx, Xxxxx & Co......................................................................... $ 90,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation......................................... 30,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.............................................................. 30,000,000
-------------
Total..................................................................... $ 150,000,000
=============
28
SCHEDULE II
GUARANTORS
Classic Cable Holding, Inc.
Ponca Holdings, Inc.
Classic Telephone, Inc.
Universal Cable Holdings, Inc.
Universal Cable Communications Inc.
Universal Cable of Beaver, Oklahoma, Inc.
Universal Cable Midwest, Inc.
WT Acquisition Corporation
W.K. Communications, Inc.
Television Enterprises, Inc.
Black Creek Management, L.L.C.
Black Creek Communications, X.X.
Xxxxxx Group, Inc. (as of the Time of Delivery)
Friendship Cable of Texas, Inc. (as of the Time of Delivery)
Xxxxxx Television, Inc. (as of the Time of Delivery)
CallCom 24, Inc. (as of the Time of Delivery)
Correctional Cable TV, Inc. (as of the Time of Delivery)
Friendship Cable of Arkansas, Inc. (as of the Time of Delivery)
Xxxxxx Television Inc. of Fort Xxxxx (as of the Time of Delivery)
29
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, each Purchaser agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Securities, except with its affiliates or with the prior written
consent of the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (a) it has not
offered or sold and will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
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30
(4) Each Purchaser agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
A-2
31
ANNEX II
Pursuant to Section 7(c) and 7(d) of the Purchase Agreement, the
accountants shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(iv) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles
applied on the basis substantially consistent with the basis
for the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and balance
sheet
AII-1
32
items included in the Offering Circular and referred to in
Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated
financial statements included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Circular do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance
sheet included in the Offering Circular except in each case
for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; or
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred
or may occur or which are described in such letter.
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
AII-2
