Exhibit 1
CONFORMED COPY
AMERICAN MEDIA OPERATIONS, INC.
$150,000,000
8 7/8 Senior Subordinated Notes due 2011
PURCHASE AGREEMENT
January 16, 2003
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
American Media Operations, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $150,000,000 aggregate principal amount
of its 8 7/8 Senior Subordinated Notes due 2011 (the "Securities"). The
Securities will be issued pursuant to an Indenture to be dated as of January 23,
2003 (the "Indenture"), among the Company, the subsidiaries of the Company
listed on the signature pages hereof and X.X. Xxxxxx Trust Company, National
Association, as trustee (the "Trustee"). The Securities will be guaranteed on an
unsecured senior subordinated basis by the Company's existing subsidiaries
listed on the signature pages hereto (the "Existing Guarantors") and by Weider
Publications, LLC ("Weider Publications") and SYL Communications ("SYL" and,
together with Weider Publications, the "Weider Guarantors"). The Existing
Guarantors and the Weider Guarantors are collectively referred to herein as the
"Guarantors". The Company and the Guarantors hereby confirm their agreement with
X.X. Xxxxxx Securities Inc. ("JPMorgan") and Bear, Xxxxxxx & Co. Inc. ("Bear
Xxxxxxx" and, together with JPMorgan, the "Initial Purchasers") concerning the
purchase of the Securities from the Company by the several Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated January 3, 2003 (such
preliminary offering memorandum, including any information incorporated therein
by reference, the "Preliminary Offering Memorandum") and will prepare an
offering memorandum dated the date hereof (such offering memorandum, including
any information incorporated therein by reference, the "Offering Memorandum")
setting forth and incorporating by reference information concerning the Company
and the Securities. The Preliminary Offering Memorandum and the Offering
Memorandum will incorporate by reference the items titled "Financial Statements
and Supplementary Data," "Executive Compensation" and
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"Security Ownership of Certain Beneficial Owners and Management" from the
Company's Annual Report on Form 10-K for the fiscal year ended March 25, 2002,
and "Financial Statements" and "Quantitative and Qualitative Disclosures About
Market Risk" from the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 23, 2002, filed with the Securities and Exchange
Commission (the "Commission") on June 14, 2002 and November 7, 2002,
respectively, and any amendment or supplemental or additional filings made with
the Commission in the future (collectively, the "SEC Reports"). Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Company to the Initial Purchasers pursuant to the
terms of this Agreement. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include any amendment
or supplement thereto, and any amendment or supplemental or additional filing
made with the Commission in the future, unless otherwise noted. The Company
hereby confirms that it has authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and
resale of the Securities by the Initial Purchasers in accordance with Section 2.
The Company and EMP Group L.L.C. (the "LLC") entered into a Purchase
and Contribution Agreement (the "Acquisition Agreement"), dated as of November
26, 2002, with Weider Health and Fitness, Weider Health and Fitness, LLC, Weider
Interactive Networks, Inc. ("WIN") and Weider Publications, a newly formed
company to which the magazine publishing business of Weider Publications, Inc.
("WPI") and WIN will be contributed prior to the Closing Date, pursuant to which
the Company has agreed, subject to certain conditions, to purchase all of the
equity interests of Weider Publications (the "Acquisition"). On the Closing
Date, in connection with the Acquisition, (i) Weider Publications will enter
into an Asset Contribution Agreement with WPI and WIN (the "Contribution
Agreement"), (ii) Weider Publications will enter into a Trademark Licensing
Agreement with Weider Health and Fitness (the "Trademark Agreement"), (iii)
Weider Publications will enter into an Athlete Endorsement Cooperative Agreement
with Weider Health and Fitness (the "Endorsement Agreement"), (iv) Weider
Publications will enter into a Services Agreement with Weider Health and Fitness
(the "Services Agreement") and (v) Weider Publications will enter into an
Advertising Agreement with Weider Nutrition International, Inc. and Weider
Health and Fitness (the "Advertising Agreement" and, together with the
Acquisition Agreement, the Contribution Agreement, the Trademark Agreement, the
Endorsement Agreement and the Services Agreement, the "Primary Acquisition
Documents"). The foregoing transactions, together with all other transactions
contemplated by the Primary Acquisition Documents, are referred to herein as the
"Acquisition Transactions." The term "Subsidiaries" means all subsidiaries of
the Company after giving effect to the Acquisition.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file with the Commission (a) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") registering an
issue of senior subordinated notes of the Company (the "Exchange Securities")
which are identical in all material respects to the Securities (except that the
Exchange Securities will not contain terms with respect to transfer
restrictions) and (b) under certain circumstances, a
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shelf registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum. References to information or
data "contained in", "included in" or "described in" the Preliminary Offering
Memorandum or the Offering Memorandum includes information incorporated by
reference from the SEC Reports.
1. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company and each of the Guarantors represent and warrant to, and
agree with, the Initial Purchasers on and as of the date hereof (except with
respect to any representation and warranty that speaks as of the Closing Date)
and the Closing Date (as defined in Section 3) after giving effect to the
Acquisition Transactions that:
(a) Each of the Preliminary Offering Memorandum (including the SEC
Reports) and the Offering Memorandum (including the SEC Reports), as of
their respective dates, did not, and on the Closing Date the Offering
Memorandum will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company and
the Guarantors make no representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or the
Offering Memorandum in reliance upon and in conformity with written
information relating to the Initial Purchasers furnished to the Company by
or on behalf of any Initial Purchaser specifically for use therein (the
"Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with
the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) The Company and each of its Subsidiaries have been duly
organized and are validly existing and in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
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conduct the businesses in which they are engaged, except where the failure
to so qualify or have such power or authority would not, singularly or in
the aggregate, have a material adverse effect on the condition (financial
or otherwise), results of operations or business of the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect"). Weider
Publications is a newly formed limited liability company that has been
formed solely for the purpose of engaging in the Acquisition Transactions
and has not engaged in any other business or operations and does not have
any material liabilities, other than those assumed or incurred in
connection with the Acquisition Transactions.
(e) The Company will have an authorized capitalization as set forth
in the Offering Memorandum under the heading "Capitalization"; and all of
the outstanding shares of capital stock of America Media, Inc., a Delaware
corporation and the Company's parent company ("Holdings") and of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable. All of the outstanding 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 except as described in the
Offering Memorandum under the caption "Description of other indebtedness,"
are owned directly or indirectly by the Company, free and clear of any
lien, charge, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party. All the capital stock (i)
of the Company is owned directly by Holdings and (ii) of Holdings is owned
directly by the LLC, in each case, except as described in the Offering
Memorandum under the caption "Description of other indebtedness," free and
clear of any lien, charge, encumbrance, security interest, restriction
upon voting or transfer or any other claim of any third party. As of the
Closing Date, Evercore Capital Partners L.P. has the power to appoint a
majority of the managers of the Board of Managers of the LLC.
(f) The statements set forth under the sections titled (i) "Security
Ownership of Certain Beneficial Owners and Management" incorporated by
reference from the Company's Annual Report on Form 10-K for the fiscal
year ended March 25, 2002 and (ii) "Summary--The transactions," "Certain
relationships and related transactions" and "Description of other
indebtedness" set forth in the Offering Memorandum insofar as they purport
to describe the documents referred to therein constitute a fair summary
thereof.
(g) Holdings, the Company and the Existing Guarantors each have,
and, as of the Closing Date, the Weider Guarantors will have, full right,
power and authority to execute and deliver, as applicable, this Agreement,
the Indenture, the Registration Rights Agreement, the Securities, the
Credit Agreement dated as of May 7, 1999, as amended and restated as of
November 1, 1999, as amended as of February 11, 2002, as amended and
restated as of January 23, 2003, among Holdings, the Company, the lenders
party thereto and JPMorgan Chase Bank, as administrative agent (the
"Credit Agreement") and the Primary Acquisition Documents (collectively,
the "Transaction Documents"), and to perform their respective obligations
hereunder and thereunder; and all corporate action required to be taken
for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation
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of the transactions contemplated thereby have been, or, in the case of the
Weider Guarantors, as of the Closing Date will have been, duly and validly
taken.
(h) This Agreement has been, or, in the case of the Weider
Guarantors, as of the Closing Date will have been, duly authorized,
executed and delivered by the Company and each of the Guarantors and
constitutes, or, in the case of the Weider Guarantors, as of the Closing
Date will constitute, a valid and legally binding agreement of the Company
and each of the Guarantors.
(i) The Registration Rights Agreement has been, or, in the case of
the Weider Guarantors, as of the Closing Date will have been, duly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of the
Company and each of the Guarantors enforceable against the Company and
each of the Guarantors in accordance with its terms, except to the extent
that (i) such enforceability may be limited by (A) applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and (B) general
equitable principles (whether considered in a proceeding in equity or at
law) and the discretion of the court before which any proceeding therefor
may be brought and (ii) any rights to indemnity or contribution thereunder
may be limited by federal or state securities laws or public policy
considerations.
(j) The Indenture has been, or, in the case of the Weider
Guarantors, as of the Closing Date will have been, duly authorized by the
Company and each of the Guarantors and, when duly executed and delivered
in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each
of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, except to the extent that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and (ii) general equitable
principles (whether considered in a proceeding in equity or at law) and
the discretion of the court before which any proceeding therefor may be
brought. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(k) The Securities have been, or, in the case of the Weider
Guarantors, as of the Closing Date will have been, duly authorized by the
Company and each of the Guarantors and, when duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company, as
issuer, and each of the Guarantors as guarantors, entitled to the benefits
of the Indenture and enforceable against the Company, as issuer, and each
of the Guarantors, as guarantors, in accordance with their terms, except
to the extent that such enforceability may be limited by (i) applicable
bankruptcy, insolvency,
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fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and (ii) general equitable
principles (whether considered in a proceeding in equity or at law) and
the discretion of the court before which any proceeding therefor may be
brought.
(l) The Credit Agreement has been duly authorized by Holdings and
the Company, will be duly executed and delivered by Holdings and the
Company as of the Closing Date, and, when duly executed and delivered in
accordance with its terms by each of the other parties thereto, will
constitute a valid and legally binding agreement of Holdings and the
Company enforceable against Holdings and the Company in accordance with
its terms, except to the extent that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general equitable principles (whether considered
in a proceeding in equity or at law) and the discretion of the court
before which any proceeding therefor may be brought.
(m) The Acquisition Agreement has been duly authorized, executed and
delivered by the Company and, assuming that the Acquisition Agreement is
the valid and legally binding agreement of the other parties thereto,
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except to
the extent that such enforceability may be limited by (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and (ii)
general equitable principles (whether considered in a proceeding in equity
or at law) and the discretion of the court before which any proceeding
therefor may be brought.
(n) The Contribution Agreement, the Trademark Agreement, the
Endorsement Agreement, the Services Agreement and the Advertising
Agreement will be duly authorized by Weider Publications as of the Closing
Date and, when duly executed and delivered by the parties thereto, will
constitute valid and legally binding agreements of Weider Publications
enforceable against Weider Publications in accordance with their terms,
except to the extent that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and the discretion of the court before which any
proceeding therefor may be brought.
(o) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(p) The execution, delivery and performance by Holdings, the Company
and each of the Guarantors of each of the applicable Transaction Documents
to which each is a party, the issuance, authentication, sale and delivery
of the Securities and compliance by the Company and each of the Guarantors
with the terms thereof and
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the consummation of the transactions contemplated by the Transaction
Documents will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is a party
or by which the 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, except where such conflict, breach or violation would not,
singularly or in the aggregate, have a Material Adverse Effect, nor will
such actions result in any violation of the provisions of the limited
liability company agreement, operating agreement, charter, by-laws or
similar organizational documents, as applicable, of the Company or any of
its Subsidiaries or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of
their properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by Holdings, the Company and each of the Guarantors of each of
the Transaction Documents to which each is a party, the issuance,
authentication, sale and delivery of the Securities and compliance by the
Company and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, filings,
registrations or qualifications (i) which shall have been obtained or made
prior to the Closing Date, (ii) as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided
in the Registration Rights Agreement and (iii) the failure to obtain which
would not, singularly or in the aggregate, have a Material Adverse Effect.
(q) Deloitte & Touche LLP ("Deloitte & Touche") are independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants
("AICPA") and its interpretations and rulings thereunder. The historical
financial statements (including the related notes) of the Company
incorporated by reference in the Offering Memorandum comply in all
material respects with the requirements applicable to a registration
statement on Form S-1 under the Securities Act (except that certain
supporting schedules are omitted); such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and
the financial information contained in the Offering Memorandum under the
headings "Summary -- Summary historical and pro forma financial
information," "Unaudited pro forma financial information," "Selected
historical financial information," "Capitalization" and "Management's
discussion and analysis of financial condition and results of operations"
are derived from the accounting records of the Company and its
subsidiaries or WPI and its subsidiaries
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and WIN, as applicable, and fairly present the information purported to be
shown thereby. The pro forma financial information contained in the
Offering Memorandum under the heading "Unaudited pro forma financial
information" has been prepared on a basis consistent with the historical
financial statements contained and incorporated by reference in the
Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act") to reflect the transactions described in the Offering Memorandum,
gives effect to the assumptions made on a reasonable basis and fairly
presents the historical and proposed transactions contemplated by the
Offering Memorandum and the Transaction Documents. The other historical
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, fairly presented.
(r) Deloitte & Touche are independent certified public accountants
with respect to WPI and its subsidiaries and WIN within the meaning of
Rule 101 of the AICPA and its interpretations and rulings thereunder. The
historical financial statements (including the related notes) of WPI and
its subsidiaries and WIN contained in the Offering Memorandum comply in
all material respects with the requirements applicable to a registration
statement on Form S-1 under the Securities Act (except that certain
supporting schedules are omitted); such financial statements of WPI and
its subsidiaries and WIN included in the Offering Memorandum have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated.
(s) 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
or assets of the Company or any of its Subsidiaries is the subject which,
(i) singularly or in the aggregate, if determined adversely to the Company
or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect or (ii) question the validity or enforceability of
any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to the best knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(t) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities or suspends the sale of
the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of its
Subsidiaries which would prevent or suspend the issuance or sale of the
Securities or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best
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knowledge of the Company and each of the Guarantors, threatened against or
affecting the Company or any of its Subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or
foreign, which could reasonably be expected to interfere with or adversely
affect the issuance of the Securities or in any manner draw into question
the validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; and the Company has complied
with any and all requests by any securities authority in any jurisdiction
for additional information to be included in the Preliminary Offering
Memorandum and the Offering Memorandum.
(u) None of Holdings, the Company or any of its Subsidiaries is (i)
in violation of its limited liability company agreement, operating
agreement, charter, by-laws or similar organizational documents, as
applicable, (ii) in default in any respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject or (iii) in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject, except, in the case of (ii) and (iii), for any
such violation or default that would not, singularly or in the aggregate,
have a Material Adverse Effect.
(v) The Company and each of its Subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have
made all declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies which are necessary or desirable for
the ownership of their respective properties or the conduct of their
respective businesses as described in the Offering Memorandum, except
where the failure to possess or make the same would not, singularly or in
the aggregate, have a Material Adverse Effect, and neither the Company nor
any of its Subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit or
has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course except
where the revocation or modification of any such license, certificate,
authorization or permit, or the failure to renew any such license,
certificate, authorization or permit, would not, singularly or in the
aggregate, have a Material Adverse Effect.
(w) The Company and each of its Subsidiaries have filed all material
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown
to be due thereon, and no tax deficiency has been determined adversely to
the Company or any of its Subsidiaries which has had (nor does the Company
or any of its Subsidiaries have any knowledge of any tax deficiency which,
if determined adversely to the Company or any of its Subsidiaries, could
reasonably be expected to have) a Material Adverse Effect.
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(x) Neither the Company nor any of its Subsidiaries is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the Commission
thereunder or (ii) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(y) The Company and each of its Subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company and its Subsidiaries and their respective
businesses. Neither the Company nor any of its Subsidiaries has received
notice from any insurer or agent of such insurer that capital improvements
or other expenditures are required or necessary to be made in order to
continue such insurance.
(z) The Company and each of its Subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will
not conflict in any material respect with, and the Company and its
Subsidiaries have not received any notice of any claim of conflict with,
any such rights of others.
(aa) The Company and each of its Subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property which are material
to the business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections of
title except those (i) described in the Offering Memorandum under the
caption "Description of other indebtedness", (ii) which do not materially
interfere with the use made and proposed to be made of such property by
the Company and its Subsidiaries or (iii) could not reasonably be expected
to have a Material Adverse Effect.
(bb) No labor disturbance by or dispute with the employees of the
Company or any of its Subsidiaries exists or, to the best knowledge of the
Company, is contemplated or threatened.
(cc) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of the Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect;
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each such employee benefit plan is in compliance in all material respects
with applicable law, including ERISA and the Code; the Company and each of
its Subsidiaries have not incurred and do not expect to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal
from, any pension plan for which the Company or any of its Subsidiaries
would have any liability; and each such pension plan that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
(dd) Except as disclosed in the Offering Memorandum, there has been
no storage, generation, transportation, handling, treatment, disposal,
discharge, emission or other release of any kind of any toxic, infectious
or hazardous substances or wastes by, due to or caused by the Company or
any of its Subsidiaries (or, to the best knowledge of the Company, any
other entity (including any predecessor) for whose acts or omissions the
Company or any of its Subsidiaries is or could reasonably be expected to
be liable) upon any of the property now or previously owned or leased by
the Company or any of its Subsidiaries, or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability that could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; and except as disclosed in the Offering
Memorandum, there has been no disposal, discharge, emission or other
release of any kind onto such property or into the environment surrounding
such property of any toxic, infectious or hazardous substances or wastes
with respect to which the Company or any of the Guarantors has knowledge,
except for any such disposal, discharge, emission or other release of any
kind which could not reasonably be expected to have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect.
(ee) Neither the Company nor, to the best knowledge of the Company
and each of the Guarantors, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of
its Subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ff) On and immediately after the Closing Date, the Company (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the Company
is not less than the total amount required to pay the probable liabilities
of the
12
Company on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (ii) the Company is able
to realize upon its assets and pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in
the normal course of business, (iii) assuming the sale of the Securities
as contemplated by this Agreement and the Offering Memorandum, the Company
is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature and (iv) the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which the Company is engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such liabilities
will be computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(gg) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in Holdings,
the Company or any of its Subsidiaries other than those listed on Schedule
1 hereto.
(hh) Neither the Company nor any of its Subsidiaries owns any
"margin securities" as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or
for any other purpose which might cause any of the Securities to be
considered a "purpose credit" within the meanings of Regulation T, U or X
of the Federal Reserve Board.
(ii) Except for this Agreement, neither the Company nor any of its
Subsidiaries is a party to any contract, agreement or understanding with
any person that would give rise to a valid claim against the Company or
the Initial Purchasers for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Securities.
(jj) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(kk) None of the Company, any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as such term is defined in Regulation S under the Securities Act
("Regulation S")), and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S to the extent
applicable.
13
(ll) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of
the Securities in a manner that would require registration of the
Securities under the Securities Act.
(mm) None of the Company or any of its affiliates or any other
person acting on its or their behalf has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(nn) There are no securities of the Company or Holdings registered
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system other than the Company's 11 5/8
Senior Subordinated Notes due 2004, 10-1/4% Series B Senior Subordinated
Notes due 2009 and Holdings' Class A common stock.
(oo) None of the Company or any of the Guarantors has taken or will
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with the offering of the Securities.
(pp) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in
the Preliminary Offering Memorandum or the Offering Memorandum has been
made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(qq) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or management of the Company or any of the
Guarantors, whether or not arising in the ordinary course of business,
(ii) none of the Company or any of the Guarantors has incurred any
material liability or obligation, direct or contingent, other than in the
ordinary course of business, (iii) none of the Company or any of the
Guarantors has entered into any material transaction other than in the
ordinary course of business and (iv) there has not been any change in the
capital stock or long-term debt of the Company or any of the Guarantors,
or any dividend or distribution of any kind declared, paid or made by the
Company or any of the Guarantors on any class of their respective capital
stock.
(rr) As of the Closing Date, to the best knowledge of the Company,
(i) neither the Company nor any of its Restricted Subsidiaries (as defined
in the Indenture dated as of February 14, 2002 among the Company, the
subsidiaries of the Company party thereto and JPMorgan Chase Bank, as
trustee (the "Existing Indenture")) will have incurred any indebtedness
pursuant to Sections 4.03(b)(v) or (xi) of the Existing Indenture, (ii)
the aggregate amount of Restricted Payment (as defined in the Existing
14
Indenture) capacity as calculated in accordance with Section 4.04(a)(3)
(after giving effect to any deductions required pursuant to Section
4.04(b) of the Existing Indenture and including amounts under Section
4.04(a)(3)(A) of the Existing Indenture up to December 31, 2002 only) will
not be less than $54.4 million, (iii) neither the Company nor any of its
Restricted Subsidiaries will have made any Restricted Payments pursuant to
Sections 4.04(b)(v), (vi)(3) or (ix) of the Existing Indenture and (iv)
neither the Company nor any of its Restricted Subsidiaries will have made
any Permitted Investments pursuant to clause (k) of the definition of
"Permitted Investment" in the Existing Indenture.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers agrees to purchase from the Company, severally and not
jointly, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 2 hereto at a purchase price equal to 97.25% of
the principal amount thereof. The Company shall not be obligated to deliver any
of the Securities except upon payment for all of the Securities to be purchased
as provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents and warrants to and agrees with
the Company and the Guarantors that (i) it is purchasing the Securities pursuant
to a private sale exempt from registration under the Securities Act, (ii) it has
not solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D") or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (iii) it has
solicited and will solicit offers for the Securities only from, and has offered
or sold and will offer, sell or deliver the Securities, as part of their initial
offering, only (A) within the United States to persons whom it reasonably
believes to be qualified institutional buyers ("Qualified Institutional
Buyers"), as defined in Rule 144A under the Securities Act ("Rule 144A"), or if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
it that each such account is a Qualified Institutional Buyer to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A and
in each case, in transactions in accordance with Rule 144A and (B) outside the
United States to persons other than U.S. persons in reliance on Regulation S
under the Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it has complied and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Securities or has in its possession or distributed the
Preliminary Offering Memorandum or the Offering Memorandum;
15
(ii) the Securities have not been registered under the Securities
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 pursuant to an exemption
from, or in transactions not subject to, the registration requirements of
the Securities Act;
(iii) such Initial Purchaser has offered and sold the Securities,
and will offer and sell the Securities, (A) as part of their distribution
at any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act;
(iv) none of such Initial Purchaser nor any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities within the
meaning of Regulation S, and all such persons have complied and will
comply with the offering restriction requirements of Regulation S;
(v) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the distribution compliance
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering of the Securities and the
date of original issuance of the Securities, except in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S"; and
(vi) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that: (i) it has not offered or sold and, prior to the
expiry of the period of six months from the issue date of the Securities, will
not offer or sell any Securities to any person 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
United Kingdom Public Offers of Securities Regulations 1995 (as amended); (ii)
it has only communicated or caused to be communicated and will only communicate
or cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the United Kingdom Financial
16
Services and Markets 2000 (the "FMSA")) received by it in connection with the
issue or sale of any Securities in circumstances in which Section 21(1) of the
FMSA does not apply to the Company; and (iii) it has complied and will comply
with all applicable provisions of the FMSA with respect to anything done by it
in relation to the Securities in, from or otherwise involving the United
Kingdom.
(e) Each Initial Purchaser, severally and not jointly, agrees that
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(f) The Company and each of the Guarantors acknowledge and agree
that the Initial Purchasers may sell Securities to any affiliate of an Initial
Purchaser and that any such affiliate may sell Securities purchased by it to the
Initial Purchasers.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchasers and the Company, at 10:00 A.M., New York City time, on
January 23, 2003 or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchasers and
the Company (such date and time of payment and delivery being referred to herein
as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as JPMorgan on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by JPMorgan on behalf of the Initial
Purchasers in New York, New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company and the Guarantors. The Company
and each of the Guarantors agree with each of the several Initial Purchasers:
17
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchasers promptly of
any order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction
and of the initiation or threatening of any proceeding for any such
purpose; and to use its best efforts to prevent the issuance of any such
order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum or suspending any such qualification
and, if any such suspension is issued, to obtain the lifting thereof at
the earliest possible time;
(b) to furnish promptly to the Initial Purchasers and counsel for
the Initial Purchasers, without charge, as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum (and any amendments or
supplements thereto) as may be reasonably requested;
(c) prior to filing with the Commission any document that would be
incorporated by reference in the Preliminary Offering Memorandum or the
Offering Memorandum prior to the completion of the initial distribution of
Securities and prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request of
such holders or such prospective purchasers, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless
the Company is then subject to and in compliance with Section 13 or 15(d)
of the Exchange Act (the foregoing agreement being for the benefit of the
holders from time to time of the Securities and prospective purchasers of
the Securities designated by such holders);
18
(f) for so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of any documents, reports and information as
shall be furnished by the Company to the Trustee or to the holders of the
Securities pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may designate and to continue such qualifications
in effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Company and its Subsidiaries
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to take any action
which would subject them to service of process or taxation in any
jurisdiction;
(h) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to authorize
or knowingly permit any person acting on their behalf to, solicit any
offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising within the meaning of
Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; and not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offering and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum;
and not to engage in any directed selling efforts within the meaning of
Regulation S; and all such persons will comply with the offering
restriction requirements of Regulation S;
(k) for a period of 90 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
(other than the Exchange Offer Statement or the Shelf Registration
Statement) for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company or
any of its Subsidiaries (other than the Securities) without the prior
written consent of the Initial Purchasers;
19
(l) during the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchasers, not to, and not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that
have been reacquired by them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until
JPMorgan on behalf of the Initial Purchasers shall have notified the
Company of the completion of the resale of the Securities, not to, and to
cause its affiliated purchasers (as defined in Regulation M under the
Exchange Act) not to, either alone or with one or more other persons, bid
for or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Securities, or attempt to induce
any person to purchase any Securities; and not to, and to cause its
affiliated purchasers not to, make bids or purchase for the purpose of
creating actual, or apparent, active trading in or of raising the price of
the Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(p) to do and perform all things required to be done and performed
by it under this Agreement that are within its control prior to or after
the Closing Date, and to use its reasonable best efforts to satisfy all
conditions precedent on its part to the delivery of the Securities;
(q) except as contemplated by the Offering Memorandum, to not take
any action prior to the execution and delivery of the Indenture which, if
taken after such execution and delivery, would have violated any of the
covenants contained in the Indenture;
(r) to not take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(s) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise, or
earnings or business affairs (except for routine oral marketing
communications in the ordinary course of business and consistent with the
past practices of the Company and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers,
which consent shall not be unreasonably withheld, unless in the judgment
of the Company and its counsel, and after notification to the Initial
Purchasers, such press release or communication is required by law; and
20
(t) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and each of the Guarantors
contained herein, to the accuracy of the statements of the Company and each of
the Guarantors and their respective officers made in any certificates delivered
pursuant hereto, to the performance by the Company and each of the Guarantors of
their respective obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents
and the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
satisfactory in all material respects to the Initial Purchasers, and the
Company shall have furnished to the Initial Purchasers all documents and
information that they or their counsel may reasonably request to enable
them to pass upon such matters.
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel to the Company,
Xxxxxxx Xxxxxx, General Counsel of the Company, Xxxxx Xxxxx, Corporate
Counsel to the Company, and Xxxxxxx Cartoon, General Counsel of Weider
Publications, Inc., shall have furnished to the Initial Purchasers their
respective written opinions, addressed to the Initial Purchasers and dated
the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, substantially to the effect set forth in Annexes X-0,
X-0, X-0 and B-4 hereto.
(e) The Initial Purchasers shall have received from Cravath, Swaine
& Xxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they request for the
purpose of enabling them to pass upon such matters.
21
(f) The Company shall have furnished to the Initial Purchasers
letters (the "Initial Letters") of Deloitte & Touche, addressed to the
Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers, substantially to the effect set
forth in Annexes C and D hereto.
(g) The Company shall have furnished to the Initial Purchasers
letters (the "Bring-Down Letters") of Deloitte & Touche, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants with respect to the Company and its
subsidiaries or WPI and its subsidiaries and WIN, as applicable, within
the meaning of Rule 101 of the Code of Professional Conduct of the AICPA
and its interpretations and rulings thereunder, (ii) stating, as of the
date of the Bring-Down Letters (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date
not more than three business days prior to the date of the Bring-Down
Letters), that the conclusions and findings of such accountants with
respect to the financial information and other matters covered by the
Initial Letters are accurate and (iii) confirming in all material respects
the conclusions and findings set forth in the Initial Letters.
(h) The Company and each of the Guarantors shall have furnished to
the Initial Purchasers a certificate, dated the Closing Date, of their
respective chief executive officers and their respective chief financial
officers stating that (i) such officers have carefully examined the
Offering Memorandum, (ii) in their opinion, the Offering Memorandum, as of
its date, did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and since the
date of the Offering Memorandum, no event has occurred which should have
been set forth in a supplement or amendment to the Offering Memorandum so
that the Offering Memorandum (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (iii) as of the Closing Date, the
representations and warranties of the Company or the particular Guarantor,
as applicable, in this Agreement are true and correct in all material
respects, the Company or the particular Guarantor, as applicable, has
complied with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder on or prior to the Closing Date, and
(iv) there has been no material adverse change in the financial position
or results of operation of the Company or any of its Subsidiaries, or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations or business
of the Company and its Subsidiaries taken as a whole.
(i) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company and the Guarantors.
22
(j) The Indenture shall have been duly executed and delivered by the
Company, the Guarantors and the Trustee, and the Securities shall have
been duly executed and delivered by the Company and duly authenticated by
the Trustee.
(k) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(l) The Acquisition Transactions, including the cash equity
investment in the Company by the LLC and the funding of the Tranche C-1
Term Loan under the Credit Agreement, shall have been consummated or shall
be consummated substantially contemporaneously on the Closing Date in
accordance with the Primary Acquisition Documents, the Credit Agreement
and all other related documentation as described in the Offering
Memorandum.
(m) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(n) There shall not have occurred any invalidation of Rule 144A
under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the
Exchange Act by the Commission or any amendment or proposed amendment
thereof by the Commission which in the judgment of the Initial Purchasers
would materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Securities as contemplated hereby.
(o) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations or business
of the Company and its Subsidiaries taken as a whole, the effect of which,
in any such case described above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the
terms and in the manner contemplated by this Agreement and the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(p) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Securities; and no injunction, restraining order or order
of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(q) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Securities
or any of the
23
Company's other debt securities or preferred stock by any "nationally
recognized statistical rating organization", as such term is defined by
the Commission for purposes of Rule 436(g)(2) of the rules and regulations
of the Commission under the Securities Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review
(other than an announcement with positive implications of a possible
upgrading), its rating of the Securities or any of the Company's other
debt securities or preferred stock.
(r) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading generally shall
have been suspended or materially limited on the New York Stock Exchange
or the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Company or any of the Guarantors shall have been
suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been
declared by federal or New York State authorities; or (iv) any outbreak or
escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that in
the judgment of the Initial Purchasers is material and adverse and makes
it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the terms and in the manner contemplated by
this Agreement and the Offering Memorandum (exclusive of any amendment or
supplement thereto or any document incorporated by reference therein filed
with the Commission after the date hereof).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section
5(n), (o), (p), (q) or (r) shall have occurred and be continuing.
7. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 (other than pursuant
to Section 5(r)), (b) the Company shall fail to tender the Securities for
delivery to the Initial Purchasers for any reason permitted under this Agreement
(other than by reason of any failure by the Initial Purchasers to comply with
any of its material covenants under this Agreement) or (c) the Initial
Purchasers shall decline to purchase the Securities for any reason permitted
under this Agreement (other than pursuant to the failure to satisfy a condition
specified in Section 5(r)), the Company and the Guarantors shall reimburse the
Initial Purchasers for such out-of-pocket expenses (including reasonable fees
and disbursements of counsel) as shall have been reasonably incurred by the
Initial Purchasers in connection with this Agreement and the proposed purchase
and resale of the Securities.
8. Indemnification. (a) The Company and each of the Existing
Guarantors and, on and after the Closing Date, the Weider Guarantors, shall
jointly and severally indemnify and
24
hold harmless each Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(a) and
Section 9 as an Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which that Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum or in any amendment or supplement thereto or in any
information provided by the Company pursuant to Section 4(e) or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse each Initial Purchaser promptly upon demand for any legal or other
expenses reasonably incurred by that Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that none of the
Company or the Guarantors shall be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
Initial Purchasers' Information; and provided, further, that with respect to any
such untrue statement in or omission from the Preliminary Offering Memorandum,
the indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any such Initial Purchaser to the extent that the sale to the person
asserting any such loss, claim, damage, liability or action was an initial
resale by such Initial Purchaser and any such loss, claim, damage, liability or
action of or with respect to such Initial Purchaser results from the fact that
both (A) to the extent required by applicable law, a copy of the Offering
Memorandum (excluding the documents incorporated by reference therein) was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (B) the untrue statement in or omission
from the Preliminary Offering Memorandum was corrected in the Offering
Memorandum unless, in either case, such failure to deliver the Offering
Memorandum was a result of non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Guarantors, their affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls the Company or any Guarantor within the meaning of
the Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 8(b) and Section 9 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact
25
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Initial Purchasers' Information provided by such
Initial Purchaser, and shall reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based upon advice of counsel to
the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 8(a) and 8(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent
26
shall not be unreasonably withheld), but if settled with its written consent or
if there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any 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 (which consent shall not be unreasonably withheld), 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 on claims
that are the subject matter of such proceeding.
The obligations of the Company, the Guarantors and the Initial
Purchasers in this Section 8 and in Section 9 are in addition to any other
liability that the Company, the Guarantors or the Initial Purchasers, as the
case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action 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 Initial Purchasers on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by or on behalf of the Company and the
Guarantors on the one hand, and the total discounts and commissions received by
the Initial Purchasers with respect to the Securities purchased under this
Agreement, on the other, bear to the total gross proceeds from the sale of the
Securities under this Agreement. 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 the Company or information supplied by the Company or the Guarantors
on the one hand or to any Initial Purchasers' Information on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Guarantors and the Initial Purchasers agree that it would not be
just and equitable if contributions pursuant to this Section 9 were to be
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 9 shall be deemed to include, for purposes of this Section 9, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending or preparing to defend any such action or
27
claim. Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total discounts and commissions received by such Initial Purchaser with respect
to the Securities purchased by it under this Agreement exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and the Guarantors and their respective successors. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company, the
Guarantors and the Initial Purchasers and in Section 4(e) with respect to
holders and prospective purchasers of the Securities. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 10, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
11. Expenses. The Company and the Guarantors agree with the Initial
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements thereto; (c) the costs of reproducing and distributing
each of the Transaction Documents; (d) the costs incident to the preparation,
printing and delivery of the certificates evidencing the Securities, including
stamp duties and transfer taxes, if any, payable upon issuance of the
Securities; (e) the fees and expenses of the Company's counsel and independent
accountants; (f) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 4(h) and of
preparing, printing and distributing Blue Sky Memoranda (including reasonable
related fees and expenses of counsel for the Initial Purchasers); (g) any fees
charged by rating agencies for rating the Securities; (h) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (i) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement which are not
otherwise specifically provided for in this Section 11; provided, however, that
except as provided in this Section 11 and Section 7, the Initial Purchasers
shall pay their own costs and expenses and provided, further, that the Initial
Purchasers and the Company shall each pay 50% of the costs of the airplane and
any helicopter used for the "road show."
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination or cancelation of this Agreement or any investigation made by
or on behalf of
28
any of them or any of their respective affiliates, officers, directors,
employees, representatives, agents or controlling persons.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to : (1) X.X. Xxxxxx Securities Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxxxx Xxxxx (telecopier
no.: (000) 000-0000) and (2) Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx, (telecopier no.:
(000) 000-0000); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the
Offering Memorandum, Attention: Xxxx Xxxxx, Chief Financial Officer
(telecopier no.: (000) 000-0000);
provided that any notice to an Initial Purchaser pursuant to Section 8(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by JPMorgan.
14. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: the statements concerning the
Initial Purchasers contained in the third, tenth, eleventh and twelfth
paragraphs under the heading "Plan of distribution."
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
29
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
30
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof.
Very truly yours,
On behalf of
AMERICAN MEDIA OPERATIONS, INC.
NATIONAL ENQUIRER, INC.
GLOBE EDITORIAL, INC.
GLOBE COMMUNICATIONS, CORP.
STAR EDITORIAL, INC.
NATIONAL EXAMINER, INC.
MIRA! EDITORIAL, INC.
AM AUTO WORLD WEEKLY, INC.
AMERICAN MEDIA CONSUMER
ENTERTAINMENT INC.
AMERICAN MEDIA CONSUMER MAGAZINE
GROUP, INC.
AMERICAN MEDIA NEWSPAPER GROUP, INC.
COUNTRY MUSIC MEDIA GROUP, INC.
AMERICAN MEDIA MINI MAGS, INC.
AMERICAN MEDIA DISTRIBUTION &
MARKETING GROUP, INC.
AMERICAN MEDIA PROPERTY GROUP, INC.
DISTRIBUTION SERVICES, INC.
NDSI, INC.
AMI BOOKS, INC.
AMI FILMS, INC.
By /s/ Xxxx Xxxxx
---------------
Name:
Title:
31
Accepted:
X.X. XXXXXX SECURITIES INC.,
For itself and on behalf of the several
Initial Purchasers listed on Schedule 2
hereto.
By /s/ Xxxxxxxxxxx Xxxxx
----------------------
Authorized Signatory
Address for notices pursuant to Section 8(c):
1 Chase Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
The foregoing Agreement is hereby agreed to and accepted as of the Closing Date.
WEIDER PUBLICATIONS, LLC
By /s/ Xxxx Xxxxx
---------------
Name:
Title:
SYL COMMUNICATIONS
By /s/ Xxxx Xxxxx
---------------
Name:
Title:
32
SCHEDULE 1
Third Amended and Restated Limited Liability Company Agreement and Investors
Rights Agreement of EMP Group L.L.C., dated as of February 13, 2002, by and
among Evercore Capital Partners, L.P., Circulation, LLC, X.X. Xxxxxx Partners
(BHCA), L.P. (formerly Chase Equity Associates, L.P.), Tandem Journalism
Investments, L.P., BG Media Investors, L.P., Xxxxx X. Xxxxxx and the other
parties thereto (as such agreement may be amended from time to time including,
without limitation, in connection with the Acquisition).
33
SCHEDULE 2
Initial Purchasers of Securities Principal Amount
-------------------------------- ----------------
X.X. Xxxxxx Securities Inc. $97,500,000
Bear, Xxxxxxx & Co. Inc. $52,500,000
Total $150,000,000
===========
34
ANNEX B-1
Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
See attached.
35
ANNEX B-2
Form of Opinion of General Counsel for the Company
See attached.
36
ANNEX B-3
Form of Opinion of Corporate Counsel for the Company
See attached.
37
ANNEX B-4
Form of Opinion of General Counsel for Weider Publications, Inc.
See attached.
38
ANNEX C
Form of Initial Comfort Letter with Respect to the Company
39
ANNEX D
Form of Initial Comfort Letter with Respect to Weider Publications, Inc. and its
subsidiaries and Weider Interactive Networks
