EXHIBIT 1.1
$95,000,000
CFW COMMUNICATIONS COMPANY
13.5% SUBORDINATED NOTES DUE 2011 AND 300,000 WARRANTS
PURCHASE AGREEMENT
July 21, 2000
July 21, 2000
WCAS Capital Partners III, L.P.
LTSE Holdings Corporation
c/o WCAS Capital Partners III, L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
CFW COMMUNICATIONS COMPANY, a Virginia corporation (the "Company"),
(i) proposes to issue and sell to LTSE Holdings Corporation ("LTSE") $95,000,000
principal amount of its 13.5% Subordinated Notes due 2011 (the "Notes") and (ii)
proposes to issue and sell to WCAS Capital Partners III, L.P. ("WCAS," and
together with LTSE, the "Purchasers") Warrants (the "Warrants"), entitling the
holders thereof to purchase initially an aggregate of 300,000 shares of the
Company's common stock, no par value (the "Common Stock") at an exercise price
of $0.01 per share, subject to adjustment as provided in the Warrants. The Notes
and the Warrants are collectively referred to herein as the "Securities."
LTSE and its direct and indirect transferees will be entitled to the
benefits of a Registration Rights Agreement relating to the Notes, dated July
26, 2000 between the Company and the Purchasers (the "Note Registration Rights
Agreement"), and WCAS and its direct and indirect transferees will be entitled
to the benefits of registration rights relating to the Warrants contained in the
Amended and Restated Shareholders Agreement dated as of July 26, 2000 among the
Company and the other persons listed on the signature pages thereof (the
"Warrant Registration Rights Agreement").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum (the "Preliminary Memorandum") and
will prepare a final offering memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") including a description of the
terms of the Securities, the terms of the offering and a description of the
Company. As used herein, the term "Memorandum" shall include in each case (i)
any supplements or amendments thereto and (ii) the portions of documents
specifically incorporated by reference therein and any supplements or amendments
thereto.
As used herein, "Material Adverse Effect" or "Material Adverse Change"
means with respect to any person, a material adverse effect upon or change in
the business, prospects, operations, properties, assets, results of operations
or financial condition of such person.
Representations and Warranties. The Company represents and
warrants to, and agrees with, you that:
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(a) The Preliminary Memorandum did not contain and the Final
Memorandum will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in either Memorandum based upon
information relating to any Purchaser furnished to the Company in writing
by such Purchaser through you expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect on the Company and its subsidiaries, taken
as a whole; all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
other than those granted to secure the Credit Facility.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by LTSE in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), and will be entitled to the benefits of the Indenture
and the Note Registration Rights Agreement.
(f) The Warrants have been duly authorized and, when executed by the
Company and countersigned by WCAS as provided in the Warrant Agreement, and
delivered to and paid for by WCAS in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their
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terms, subject to applicable bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and will be entitled to
the benefits of the Warrant Registration Rights Agreement.
(g) The Indenture has been duly authorized and, when executed and
delivered by the Company, will be valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(h) The Warrant Agreement has been duly authorized and, when executed
and delivered by the Company, will be valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(i) The Note Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as rights to indemnification and contribution
under the Note Registration Rights Agreement may be limited under
applicable law.
(j) The Warrant Registration Rights Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization or similar laws affecting
the enforcement of creditors' rights generally and general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as rights to indemnification and
contribution under the Warrant Registration Rights Agreement may be limited
under applicable law.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Warrant Agreement, the Note Registration Rights Agreement, the Warrant
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Warrant Agreement, the Note Registration Rights
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Agreement, the Warrant Registration Rights Agreement or the Securities,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Securities and
by Federal and state securities laws with respect to the Company's
obligations under the Note Registration Rights Agreement and the Warrant
Registration Right Agreement.
(l) (1) There has not occurred any Material Adverse Change, or any
development which is reasonably likely to result in a Material Adverse
Change, in the Company and its subsidiaries, taken as a whole, from the
description of the Company and its subsidiaries as set forth in the Final
Memorandum, (2) there has not occurred any Material Adverse Change, or any
development which is reasonably likely to result in a Material Adverse
Change, in R&B Communications, Inc. ("R&B") or its subsidiaries, taken as a
whole, that would constitute a Material Adverse Change of the Company, its
subsidiaries and the Richmond-Norfolk Operations of PrimeCo, taken as a
whole, from the description of the Company and its subsidiaries set forth
in the Final Memorandum and (3) there has not occurred any Material Adverse
Change, or any development which is reasonably likely to result in a
Material Adverse Change, in the Richmond-Norfolk Operations of PrimeCo that
would constitute a Material Adverse Change in the Company, its subsidiaries
and the Richmond-Norfolk Operations of PrimeCo, taken as a whole, from the
description of the Company and its subsidiaries as set forth in the Final
Memorandum.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject other than proceedings accurately described in all material
respects in each Memorandum and proceedings that would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole, or on
the power or ability of the Company to perform its obligations under this
Agreement, the Indenture, the Warrant Agreement, the Note Registration
Rights Agreement, the Warrant Registration Rights Agreement or the
Securities or to consummate each of the Transactions.
(n) The Company and its subsidiaries, R&B and its subsidiaries and
the Richmond-Norfolk Operations of PrimeCo have all necessary certificates,
orders, permits, licenses, authorizations, consents and approvals of and
from, and have made all declarations and filings with, all applicable
federal, state, local, foreign supranational, national, regional and other
governmental authorities and all applicable courts and tribunals, to own,
lease, license and use their respective properties and assets and to
conduct their respective businesses in the manner described in the Final
Memorandum, and none of the Company and its subsidiaries, R&B and its
subsidiaries and the Richmond-Norfolk Operations of PrimeCo has received
any notice of proceedings relating to revocation or modification of any
such certificates, orders, permits, licenses, authorizations, consents or
approvals, nor are the Company and its subsidiaries, R&B and its
subsidiaries and the Richmond-Norfolk Operations of PrimeCo in violation
of, or in default under, any applicable federal, state, local, foreign
supranational, national or regional law, regulation, rule, decree, order or
judgment applicable to the Company and
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its subsidiaries and R&B and its subsidiaries and the Richmond-Norfolk
Operations of PrimeCo, the effect of which, in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company,
its subsidiaries and the Richmond-Norfolk Operations of PrimeCo, taken as a
whole, except as described in the Final Memorandum.
(o) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
(q) The Company is not aware of any fact which makes the acquisition
of R&B or the Richmond-Norfolk Acquisition unlikely and (ii) none of the
Company, R&B and PrimeCo have received any communication from any
regulatory authority which would have a Material Adverse Effect on the
Company's and PrimeCo's Richmond-Norfolk Operations existing operations,
taken as a whole.
(r) The Asset Exchange Agreement, dated May 17, 2000 between PrimeCo
and Virginia RSA 6 Cellular Limited Partnership, with respect to the
Richmond-Norfolk Acquisition, has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
(s) The Agreement and Plan of Merger, dated June 16, 2000, among the
Company, R&B and R&B Combination Company, with respect to the acquisition
by the Company of R&B, has been duly authorized, executed and delivered by,
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
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(t) each of (1) the Securities Purchase Agreement dated as of July
11, 2000 among the Company, Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P.
("WCAS") and the other purchasers listed on the signature pages thereof
(collectively with WCAS, the "Stock Purchasers") with respect to the Series
B Preferred Stock of the Company (the "Series B Preferred Stock"), (2) the
Shareholders Agreement among the Company and the Stock Purchasers dated as
of July 11, 2000, and (3) the Warrant Agreement among the Company and the
Stock Purchasers dated as of July 11, 2000 has been duly authorized,
executed and delivered by, and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(u) The Company is not aware of any fact which makes the issuance and
sale to WCAS and certain other purchasers of Series C Preferred Stock (the
"Series C Preferred Stock") and Series D Preferred Stock (the "Series D
Preferred Stock," together with the Series B Preferred Stock and Series C
Preferred Stock, the "Preferred Shares") in an amount equal to gross
proceeds of $137.5 million unlikely.
(v) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum under the caption "Use of Proceeds," will
not be an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(w) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "Affiliate") of the Company
has directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale
of the Securities in a manner that would require the registration under the
Securities Act of the Securities or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of the
Securities, (as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(x) None of the Company, its Affiliates or any person acting on its
or their behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities and the
Company and its Affiliates and any person acting on its or their behalf
have complied and will comply with the offering restrictions requirement of
Regulation S.
(y) Assuming the accuracy of the representations of the Purchasers in
Section 7 herein and their compliance with the covenants and agreements
therein, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Purchasers in the manner contemplated by
this Agreement and the Final Memorandum to register the Securities under
the Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
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(z) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(aa) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as the Company reasonably believes are prudent and customary
in the businesses in which they are engaged; none of the Company or any of
its subsidiaries has been refused any insurance coverage sought or applied
for; and none of the Company or any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole, except as described in the Final Memorandum
and except where such refusal or failure to renew would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole.
(bb) The Company and its subsidiaries keep accurate books and records
reflecting their respective assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of consolidated financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(cc) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent, and
none of the Company or any of its subsidiaries is aware of any existing or
imminent labor disturbance by the employees of any of the Company's or any
of its subsidiaries' principal suppliers, manufacturers, customers or
contractors which, in either case, may reasonably be expected to result in
a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, except as described in the Final Memorandum.
(dd) The Company and its subsidiaries own, possess or license, or can
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 except for such Intellectual
Property the absence of which would not reasonably be expected to result in
a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, and none of the Company or any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property
(including Intellectual Property which is licensed) or of any facts or
circumstances which would
8
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 or invalidity or inadequacy, would reasonably be
expected to result in a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
(ee) The Company and its subsidiaries have good and marketable title
to all material real property owned by them and good title to all other
material properties owned by them and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries hold
properties described in the Final Memorandum, are in full force and effect,
and none of the Company or any of its subsidiaries, has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or any of its subsidiaries to the continued possession of the
leased or subleased premises under any such lease or sublease.
(ff) All material United States federal income tax returns of the
Company and its subsidiaries required by law to be filed have been filed
and all taxes shown by such returns or otherwise assessed, which are due
and payable, have been paid, except assessments against which appeals have
been or will be promptly taken and as to which adequate reserves have been
provided. The Company and its subsidiaries have filed all other tax
returns that are required to have been filed by them pursuant to applicable
foreign, federal, state, local or other law except insofar as the failure
to file such returns would not result in a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole, and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Company and its subsidiaries, except for such taxes, if any, as are being
contested in good faith and by appropriate proceedings and as to which
adequate reserves have been provided. The charges, accruals and reserves
on the books of the Company and its subsidiaries in respect of all federal,
state, local and foreign tax liabilities of the Company and its
subsidiaries for any years not finally determined are adequate to meet any
assessments or reassessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not
result in a Material Adverse Effect on the Company and its subsidiaries,
taken as whole.
(gg) The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly and validly authorized (or ratified) and issued and
are fully paid and non-assessable; the shares of the Common Stock initially
issuable upon exercise of the Warrants have been duly and validly
authorized and reserved for issuance and, when issued, delivered and paid
for in accordance with the provisions of the Warrants and the Warrant
Agreement, will be duly and validly issued, fully paid and non-assessable.
Agreements to Sell and Purchase. Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company hereby agrees to sell to (i) LTSE $95,000,000 in principal
amount of Notes for the price of $82,800,000 and (ii) WCAS 300,000 Warrants for
the price of $12,200,000.
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The Company hereby agrees that, without the prior written consent of
the Purchasers, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company (other than the Credit Facility) or
warrants to purchase debt of the Company substantially similar to the Securities
(other than the sale of the Securities under this Agreement.)
[RESERVED].
Payment and Delivery. Payment of the purchase price for the
Securities shall be made to or at the direction of the Company by wire or other
transfer payable in same day funds against delivery of such Securities for the
respective accounts of the Purchasers at 10:00 a.m., New York City time, on July
26, 2000, or at such other time on the same or such other later date, but not
later than 4:00 p.m. August 4, 2000, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "Closing
Date".
Delivery of the Securities shall be at such location as the Purchasers
shall reasonably designate at least two business days in advance of the Closing
Date. Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the accounts of the Purchasers, with
any transfer taxes payable in connection with the transfer of the Securities to
the Purchasers duly paid, against payment of the purchase price therefor.
Conditions to the Purchasers' Obligations. The several
obligations of the Purchasers to purchase and pay for the Securities on the
Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Company or any of the Company's
securities or in the rating outlook for the Company by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any Material Adverse Change,
or any development which is reasonably likely to result in a Material
Adverse Change, in the Company and its subsidiaries, taken as a whole, from
the description of the Company and its subsidiaries set forth in the Final
Memorandum (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in your reasonable judgment, is
material and adverse and that makes it, in your reasonable judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum;
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(iii) There shall not have occurred any Material Adverse Change,
or any development which is reasonably likely to result in a Material
Adverse Change, in R&B and its subsidiaries, taken as a whole, that would
constitute a Material Adverse Change with respect to the Company and its
subsidiaries, taken together as a whole, after giving effect to the
Transactions, from the description of the Company and its subsidiaries as
set forth in the Final Memorandum, that, in your reasonable judgment, is
material and adverse and that makes it, in your reasonable judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum;
(iv) (A) There shall exist no fact that, in your reasonable
judgment, creates a substantial possibility that the R&B merger will not be
consummated and (B) the Company and R&B shall not have received any
communication from any regulatory authority which are, in your judgment,
reasonably likely to be material and adverse to the business prospects of
the Company's existing operations, taken as a whole, that would be material
and adverse to the business prospects of the Company and its subsidiaries,
taken as a whole, after giving effect to the Transactions.
(v) There shall not have occurred any Material Adverse Change
or any development which is reasonably likely to result in a Material
Adverse Change, in the Richmond-Norfolk Operations of PrimeCo that would
constitute a Material Adverse Change with respect to the Company and its
subsidiaries, taken together as a whole, after giving effect to the
Transactions, from the description of the Company and its subsidiaries as
set forth in the Final Memorandum, that, in your reasonable judgment, is
material and adverse and that makes it, in your reasonable judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum; and
(vi) (A) There shall exist no fact that, in your reasonable
judgment, creates a substantial possibility that the Richmond-Norfolk
Acquisition will not be consummated and (B) the Company and PrimeCo shall
not have received any communication from any regulatory authority which
are, in your judgment, reasonably likely to be material and adverse to the
business prospects of PrimeCo and the Company's existing operations, taken
as a whole, that would be material and adverse to the business prospects of
the Company and its subsidiaries, taken as a whole, after giving effect to
the Transactions.
(b) The Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
11
(c) The Purchasers shall have received on the Closing Date an opinion
of Xxxxxx & Xxxxxxxx, outside counsel for the Company, dated the Closing
Date, in a form satisfactory to the Purchaser.
(d) The Purchasers shall have received on the Closing Date an opinion
of Xxxxxx & Xxxxxxxx, special state regulatory counsel for the Company and
R&B, in a form satisfactory to the Purchaser.
(e) The Purchasers shall have received on the Closing Date an opinion
of Wiley, Rein & Fielding, United States regulatory counsel for the Company
and R&B, dated the Closing Date, in a form satisfactory to the Purchaser.
(f) The Purchasers shall have received on the Closing Date an opinion
of Xxxxxxxxx Xxxxxx, regulatory counsel to PrimeCo, dated the Closing Date,
in a form satisfactory to the Purchaser.
The above opinions shall be rendered to the Purchasers at the request
of the Company and shall so state therein.
(g) The Purchasers shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
(h) The Notes shall have been designated PORTAL securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the PORTAL
Market.
Covenants of the Company. In further consideration of the
agreements of the Purchasers contained in this Agreement, the Company covenants
with the Purchasers as follows:
(a) To furnish to you in New York City, without charge, prior to 3:00
p.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 6(c), as many
copies of the Final Memorandum and any supplements and amendments thereto
as you may reasonably request.
(b) Before amending or supplementing either Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use any
such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the
Closing Date, any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Final Memorandum in order to
make the statements therein, in the light of the circumstances when the
Final Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Purchasers, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Purchasers, either
amendments or supplements to the Final Memorandum so that the statements in
the Final Memorandum as so amended
12
or supplemented will not, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities and shares of the Common
Stock issuable upon exercise of the Warrants for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
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.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
issuance and sale of the Securities and the shares of the Common Stock
issuable upon exercise of the Warrants and all other fees or expenses in
connection with the preparation of each Memorandum and all amendments and
supplements thereto, including all printing costs associated therewith, and
the delivering of copies thereof to the Purchasers, in the quantities
herein above specified, (ii) all costs and expenses related to the transfer
and delivery of the Securities and the shares of the Common Stock issuable
upon exercise of the Warrants to WCAS, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue Sky
or legal investment memorandum in connection with the offer and sale of the
Securities and the shares of the Common Stock issuable upon exercise of the
Warrants under state securities laws and all expenses in connection with
the qualification of the Securities and the shares of the Common Stock
issuable upon exercise of the Warrants for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Purchasers in
connection with such qualification and in connection with the Blue Sky or
legal investment memorandum, (iv) any fees charged by rating agencies for
the rating of the Securities, (v) the fees and expenses, if any, incurred
in connection with the admission of the Securities for trading in PORTAL or
any appropriate market system and the listing of the shares of the Common
Stock issuable upon the exercise of the Warrants on the Nasdaq National
Market, (vi) the costs and charges of the Trustee, the Escrow Agent and any
transfer agent, registrar or depositary, (vii) the cost of the preparation,
issuance and delivery of the Securities, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, but excluding 50% of any
travel and lodging expenses and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section.
(f) Neither the Company nor any Affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities
13
Act) which could be integrated with the sale of the Securities in a manner
which would require the registration under the Securities Act of the
Securities.
(g) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) While any of the Securities remain "restricted securities" within
the meaning of the Securities Act, to make available, upon request, to each
holder of the Securities and to each prospective purchaser designated by
such holder the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to Section 13 or 15(d)
of the Exchange Act.
(i) To use its best efforts to permit the Notes to be designated
PORTAL securities in accordance with the rules and regulations adopted by
the National Association of Securities Dealers, Inc. relating to trading in
the PORTAL Market, and to list the shares of the Common Stock issuable upon
exercise of the Warrants on the Nasdaq National Market.
None of the Company, its Affiliates or any person acting on
its or their behalf (other than the Purchasers) will engage in any directed
selling efforts (as that term is defined in Regulation S) with respect to
the Securities, and the Company and its Affiliates and each person acting
on its or their behalf (other than the Purchasers) will not engage in any
selling efforts pursuant to Regulation S.
(k) To reserve and keep available at all times, free of preemptive
rights, shares of the Common Stock for the purpose of enabling the Company
to satisfy any obligations to issue the shares of the Common Stock upon
exercise of the Warrants.
Offering of Securities; Restrictions on Transfer. (a) Each
Purchaser, severally and not jointly, represents and warrants that such
Purchaser is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB").
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in either Memorandum (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue
14
statement or omission or alleged untrue statement or omission based upon
information relating to any Purchaser furnished to the Company in writing
by such Purchaser through you expressly for use therein; provided however,
that the foregoing indemnity agreement with respect to any Preliminary
Memorandum shall not inure to the benefit of any Purchaser from whom the
person asserting any such losses, claims, damages or liabilities purchased
the Securities, or any person controlling such Purchaser, if it is
established that a copy of the Final Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Purchaser to such person, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Final Memorandum (as so
amended or supplemented ) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result
of the Company's failure to provide such Purchaser the Final Memorandum at
or prior to the requested delivery of a written confirmation in connection
with the sale of Securities to such person.
(b) Each Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers and each person,
if any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Purchaser, but only with
reference to information relating to such Purchaser furnished to the
Company in writing by such Purchaser through you expressly for use in
either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 8(a) or 8(b), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution or (iv) the indemnifying party shall have authorized the
indemnified party to employ separate counsel at the expense of the
indemnifying party. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
15
incurred. Such firm shall be designated in writing by WCAS, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the Purchasers on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one
hand and of the Purchasers on the other hand 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 or by the
Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Purchasers' respective obligations to contribute pursuant to
this Section 8 are several in proportion to the purchase price of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Purchasers agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, 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 Section 8, (i) no Purchaser shall be required to
contribute any amount in excess of the amount by which the purchase price
it paid exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission and (ii) the Company's indemnification
obligations under this Agreement shall be capped at the purchase price paid
by the Purchasers. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities
16
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Purchaser or any person
controlling any Purchaser or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc. and the Chicago Board of Options Exchange, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 9(a)(i) through 9(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.
Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Purchasers, c/o WCAS Capital Partners III, L.P.,
000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, xxxxxxxxx: Xxxxxxxx X.
Xxxxxx, facsimile number (000) 000-0000 and if sent to the Company, to 000
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, attention: Chief Financial
Officer, facsimile number (000) 000-0000.
Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
17
Very truly yours,
CFW COMMUNICATIONS COMPANY
By: ______________________________
Name:
Title:
Accepted as of the date hereof
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates, L.L.C.,
its general partner
By: ________________________________
Name:
Title: Managing Member
LTSE HOLDINGS CORPORATION
By: ________________________________
Name:
Title:
18
