EXHIBIT 10.230
XXXXXX COMMUNICATIONS CORPORATION
$365,000,000
Senior Secured Floating Rate Notes Due 2010
Purchase Agreement
New York, New York
January 5, 2004
Citigroup Global Markets Inc.
Bear, Xxxxxxx & Co. Inc.
CIBC World Markets Corp.
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Communications Corporation, a corporation organized
under the laws of Delaware (the "Company"), proposes to issue and sell to the
several parties named in Schedule I hereto (the "Initial Purchasers"), for whom
you (the "Representatives") are acting as representatives, $365,000,000
principal amount of its Senior Secured Floating Rate Notes Due 2010 (the
"Notes"). As described in the Final Memorandum, the Company's obligations with
respect to a portion of the Notes will be unconditionally guaranteed (the
"Guarantees" and together with the Notes, the "Securities") on a senior secured
basis by each of the Company's direct and indirect domestic subsidiaries set
forth on the signature page hereto (the "Guarantors" and together with the
Company, the "Issuers"). The Securities are to be issued under an indenture (the
"Indenture"), to be dated as of the Closing Date (as defined below), among the
Issuers and The Bank of New York, as trustee (the "Trustee"). Each Issuer's
obligations with respect to the Securities and to the Trustee will have the
benefit of liens on the Collateral (as defined in the Final Memorandum) owned by
such Issuer pursuant to a Pledge and Security Agreement (the "Security
Agreement" and together with each other agreement purporting to create a lien in
favor of the Collateral Agent (as defined below) for the benefit of the holders
of Securities, the "Security Documents"), to be dated as of the Closing Date, by
and among the Issuers and the Collateral Agent in the form attached as Annex A.
The Company intends to apply a portion of the net proceeds from the sale of the
Securities to the Initial Purchasers to repay and terminate that certain Amended
and Restated Credit Agreement (as amended, the "Credit Agreement"), dated as of
May 5, 2003, by and among the Company, Citicorp USA, Inc. (the "Agent") and the
lenders named therein and to pre-fund or repay certain letters of credit
outstanding under the Credit Agreement (the "Refinancing"). The issuance and
sale of the Securities, the granting of the security interests in favor of the
Collateral Agent under the Security Documents and the Refinancing are sometimes
hereinafter collectively referred to as the "Transactions." To the extent there
are
no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial Purchasers, and the
terms Representatives and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 18 hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated December 10, 2003 (as amended
or supplemented at the Execution Time, the "Preliminary Memorandum"), and a
final offering memorandum, dated January 5, 2004 (as amended or supplemented to
the Closing Date, the "Final Memorandum"). Each of the Preliminary Memorandum
and the Final Memorandum sets forth certain information concerning the Issuers
and the Securities. Each Issuer hereby confirms that it has authorized the use
of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers.
1. Representations and Warranties. The Issuers, jointly and
severally, represent and warrant to each Initial Purchaser as set forth below in
this Section 1:
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. At the
Execution Time and on the Closing Date, the Final Memorandum did not,
and will not (and any amendment or supplement thereto, at the date
thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Issuers make no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or
the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Initial Purchasers through the
Representatives specifically for inclusion therein.
(b) None of the Issuers nor any of their Affiliates nor any
person acting on behalf of any of them has, directly or indirectly,
made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of
the Securities under the Act.
(c) None of the Issuers nor any of their Affiliates nor any
person acting on behalf of any of them has engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in
the United States.
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(d) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(e) None of the Issuers nor any of their Affiliates nor any
person acting on behalf of any of them has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(f) The Company has been advised by the NASD's PORTAL Market
that the Securities have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(g) No Issuer is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, no Issuer will be, an "investment
company" within the meaning of the Investment Company Act, without
taking account of any exemption arising out of the number of holders of
the Company's securities.
(h) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(i) No Issuer has paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities (except
as contemplated by this Agreement).
(j) No Issuer has taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(k) Each of the Issuers has been duly incorporated or
organized and is validly existing as a corporation, limited liability
company or limited partnership in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate,
limited liability company or partnership power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Final Memorandum, and is duly
qualified to do business as a foreign corporation, limited liability
company or partnership and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole. Except as set forth on Schedule II
hereto, the Company has no subsidiaries other than the Guarantors.
(l) With respect to those Guarantors which are corporations,
all the outstanding shares of capital stock of each Guarantor have been
duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares
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of capital stock of the Guarantors are owned by the Company either
directly or through other wholly owned Guarantors and on the Closing
Date such ownership is free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances
except for Permitted Liens (as defined in the Final Memorandum).
(m) The statements in the Final Memorandum under the headings
"Description of Material Indebtedness and Preferred Stock,"
"Description of the Notes" and "Important Federal Income Tax
Considerations" fairly summarize the matters therein described.
(n) This Agreement has been duly authorized, executed and
delivered by each Issuer; the Indenture has been duly authorized and,
assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by each Issuer, will constitute a
legal, valid and binding instrument enforceable against the each Issuer
in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); the
Securities have been duly authorized, and, when executed and, in the
case of the Notes, authenticated, in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers,
will have been duly executed and delivered by the Company and each
Guarantor, as applicable, and will constitute the legal, valid and
binding obligations of the Company and each Guarantor, as applicable,
entitled to the benefits of the Indenture (subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); and each
Security Document has been duly authorized and, when executed and
delivered by the applicable Issuers and the Collateral Agent, will
constitute the legal, valid, binding and enforceable agreement of each
Issuer (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity). The Security Documents, when executed
and delivered in connection with the sale of the Securities, will
create in favor of the Collateral Agent for the benefit of the Secured
Parties (as defined in the Security Agreement), valid and enforceable
security interests in the Collateral and, upon the filing of
appropriate Uniform Commercial Code financing statements and the taking
of the other actions described in the Security Documents, the security
interests in the rights of the Issuers in such Collateral will be
perfected and superior to and prior to the liens of all third persons
other than Permitted Liens.
(o) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the execution of this Agreement, the Indenture or the Security
Documents or the consummation of the Transactions, or the fulfillment
of the terms hereof or thereof, except such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Initial Purchasers in the
manner contemplated
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herein and in the Final Memorandum and filings required to be made by
the Security Agreement in order to perfect the lien created by the
Security Agreement.
(p) Neither the execution and delivery of the Indenture, this
Agreement or any Security Document, the issue and sale of the
Securities, nor the consummation of any of the Transactions, nor the
fulfillment of the terms hereof or thereof will conflict with, or
result in a breach or violation or imposition of any lien, charge or
encumbrance (other than the liens created by the Security Documents)
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter (including any certificates of
designation), by-laws or other organizational documents of the Company
or any of its subsidiaries; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties.
(q) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Final Memorandum present fairly in all material respects the
financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); the selected financial
data set forth under the captions "Summary Consolidated Financial and
Other Data" and "Selected Consolidated Financial and Other Data" in the
Final Memorandum fairly present, on the basis stated in the Final
Memorandum, the information included therein.
(r) Except as set forth in the Final Memorandum, no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the knowledge
of the Issuers, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement,
the Indenture or the Security Documents, or the consummation of the
Transactions; or (ii) could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(s) Each of the Company and its subsidiaries owns or leases
all such properties as are used in the conduct of its operations as
presently conducted, except where the failure to own or lease such
properties would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole.
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(t) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter (including any certificates
of designation), bylaws or other organizational documents; (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as
applicable, except in the case of each of clauses (ii) and (iii) for
such violations or defaults which would not reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole.
(u) PricewaterhouseCoopers LLP and Ernst & Young LLP, who have
each certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their respective reports with
respect to the audited consolidated financial statements included in
the Final Memorandum, are, in the case of Ernst & Young LLP, and were
prior to March 27, 2003, in the case of PricewaterhouseCoopers LLP,
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(v) There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in
connection with the execution and delivery of this Agreement or the
issuance or sale by the Issuers of the Securities.
(w) The Issuers have filed all foreign, federal, state and
local tax returns that are required to be filed or have requested
extensions thereof, except in any case in which the failure so to file
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto) and have paid all taxes required to be paid by them
and any other assessment, fine or penalty levied against any of them,
to the extent that any of the foregoing are due and payable, except for
any such assessment, fine or penalty that is currently being contested
in good faith or as would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
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(x) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and no Issuer is aware of any existing or imminent labor disturbance by
the employees of any of its or its subsidiaries' principal suppliers,
contractors or customers, that could have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(y) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause, where the failure of the Company
or such subsidiary to prevail on such claim would reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole; and neither the Company
nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, as to each of the
foregoing clauses of this sentence except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto).
(z) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(aa) The Company and its subsidiaries possess all licenses,
certificates, franchises, permits and other authorizations ("Licenses")
issued by the appropriate federal, state, local or foreign regulatory
authorities, including, without limitation, Licenses from the United
States Federal Communications Commission (the "FCC"), necessary to own
their respective properties and to conduct their respective businesses
in all material respects, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such License which, singly or in the
aggregate, if the subject of an unfavorable decision,
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ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto); the
Company and each of its subsidiaries have fulfilled and performed in
all material respects all of their respective obligations with respect
to such Licenses and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holders
of any such License, except as individually or in the aggregate could
not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business; and except as described in the Final Memorandum (exclusive of
any amendment or supplement thereto), none of such Licenses contains
any restriction that is materially burdensome to the Company or any of
its subsidiaries, taken as a whole. There are no license renewal or
rate or tariff proceedings existing, pending or, to the best knowledge
of the Company, threatened that could reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole.
(bb) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(cc) The Company and its subsidiaries are (i) in compliance
with any and all applicable federal, state, local and foreign laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement
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thereto); except as set forth in the Final Memorandum, neither the
Company nor any of its subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(dd) The Company has reasonably concluded that the costs and
liabilities associated with the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval under
Environmental Laws, any related constraints on operating activities
imposed by Environmental Laws and any potential liabilities to third
parties under Environmental Laws) would not, singly or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(ee) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries
are eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations; the Company and its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA.
(ff) Each of the relationships and transactions specified in
Item 404 of Regulation S-K that would have been required to be
described in a prospectus if this offering had been registered under
the Act has been so described in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(gg) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property necessary
for and material to the conduct of the Company's business as described
in the Final Memorandum (collectively, the "Intellectual Property").
Except as set forth in the Final Memorandum, (a) there are no
conflicting rights of third parties with respect to any such
Intellectual Property; (b) there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware
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of any facts which would form a reasonable basis for any such claim;
(d) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the validity or
scope of any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such claim; (e)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of any
other fact which would form a reasonable basis for any such claim; (f)
there is no U.S. patent or published U.S. patent application which
contains claims that dominate or may dominate any Intellectual Property
described in the Final Memorandum as being owned by or licensed to the
Company or that interferes with the issued or pending claims of any
such Intellectual Property; and (g) there is no prior art of which the
Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable
which has not been disclosed to the U.S. Patent and Trademark Office.
(hh) Based upon a review of the FCC files, (a) the Company and
its subsidiaries hold the broadcast licenses issued by the FCC with
respect to each of the stations set forth in the table under
"Business--Distribution" in the Final Memorandum (except for stations
which the Offering Memorandum discloses are operated by the Company or
its subsidiaries under time brokerage agreements with the station
owners and except as otherwise disclosed therein) without which the
station would not be permitted to broadcast its signal (the "FCC
Licenses") and (b) each of the FCC Licenses authorizes television
broadcast operations by the holder thereof using the broadcast channel
assignment and serving the community of license that is identified in
such table.
(ii) To each Issuer's knowledge, there is no order, judgment,
decree, notice of apparent liability, or order of forfeiture
outstanding, and no petition, objection, notice of apparent liability,
order of forfeiture, investigation, complaint, or other proceeding
pending before the FCC against the stations authorized by the FCC
Licenses set forth in the table referred to in clause (hh) above (the
"Stations") or the FCC Licenses that reasonably could be expected to
result in the termination, revocation, suspension, or denial of renewal
of any of the FCC Licenses, except for rule making and other similar
proceedings generally applicable to the television broadcasting
industry or substantial segments thereof.
(jj) To each Issuer's knowledge, except as set forth in the
Final Memorandum, (a) there are no license renewal proceedings (other
than applications for renewal filed in the ordinary course) pending for
any of the FCC Licenses; and (b) none of the FCC Licenses is subject to
any condition imposed by the FCC that reasonably could be expected to
have a material adverse effect on the Company's ability to conduct its
broadcast operations as described in the Final Memorandum, taken as a
whole.
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(kk) The execution, delivery and performance of this
Agreement, the Security Agreement and the Indenture and the issuance,
sale and delivery of the Securities pursuant to this Agreement and the
consummation of the other Transactions (A) do not require any consent
or authorization from the FCC, and (B) do not constitute a violation of
the Communications Act or the published rules and regulations of the
FCC promulgated thereunder.
(ll) The statements in the Final Memorandum under the captions
"Risk Factors--Risks Relating to Our Business-- We are required by the
FCC to abandon the analog broadcast service of 23 of our full power
stations occupying the 700 MHz spectrum and may suffer adverse
consequences if we are unable to secure alternative distribution on
reasonable terms," "Risk Factors--Risks Relating to Our Business--We
could be adversely affected by actions of the FCC, the Congress and the
courts that could alter broadcast television ownership rules in a way
that would materially affect our present operations or future business
alternatives," "Risk Factors--Risks Relating to Our Industry-- Our
business is subject to extensive and changing regulation that could
increase our costs, expose us to greater competition, or otherwise
adversely affect the ownership and operation of our stations or our
business strategies," "Risks Factors-- Risks Relating to Our Industry--
We believe that the success of our television operations depends to a
significant extent upon access to households served by cable television
systems. If the law requiring cable system operators to carry our
signal were to change, we might lose access to cable television
households, which could adversely affect our operations" and
"Business-- Federal Regulation of Broadcasting," insofar as they
constitute summaries of laws and the published rules and regulations
promulgated thereunder, fairly summarize the matters therein described
and are accurate in all material respects.
(mm) There are no restrictions or limitations imposed by the
FCC on the ability of the Company to make cash payments in respect of
the Securities in accordance with their terms.
(nn) The Issuers believe that the Issuers and their directors
or officers, in their capacities as such, are in compliance in all
material respects with the applicable provisions of the Sarbanes Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "Sarbanes Oxley Act"), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(oo) The Issuers have taken all actions necessary for the
Securities to be designated as Designated Senior Debt under each class
of the Company's subordinated debt.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Initial Purchasers in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Initial
Purchaser. Additionally, the representations and warranties made by the Issuers
in the Security Agreement shall be deemed to have been made to the Initial
Purchasers.
-11-
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company and the Guarantors agree to sell to each Initial Purchaser, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company and the Guarantors, at a purchase price of 98.25% of the principal
amount thereof, plus accrued interest from January 8, 2004 to the Closing Date,
the principal amount of Securities set forth opposite such Initial Purchaser's
name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 9:00 A.M., New York City time, on January 8, 2004,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
4. Offering by Initial Purchasers. (a) Each Initial Purchaser
acknowledges that the Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly,
represents and warrants to and agrees with the Issuers that:
(i) it has not offered or sold, and will not offer or sell,
any Securities within the United States or to, or for the account or
benefit of, U.S. persons (x) as part of its distribution at any time or
(y) otherwise until 40 days after the later of the commencement of the
offering and the date of closing of the offering except:
(A) to those it reasonably believes to be "qualified
institutional buyers" (as defined in Rule 144A under the Act)
or
(B) in accordance with Rule 903 of Regulation S;
(ii) neither it nor any person acting on its behalf has made
or will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States;
(iii) in connection with each sale pursuant to Section
4(b)(i)(A), it has taken or will take reasonable steps to ensure that
the purchaser of such Securities is aware that such sale is being made
in reliance on Rule 144A;
-12-
(iv) neither it, nor any of its Affiliates nor any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with
respect to the Securities;
(v) it has not entered and will not enter into any contractual
arrangement with any distributor (within the meaning of Regulation S)
with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company;
(vi) it and its Affiliates have complied and will comply with
the offering restrictions requirement of Regulation S;
(vii) at or prior to the confirmation of a sale of the
Securities (other than a sale of Securities pursuant to Section
4(b)(i)(A) of this Agreement), it shall have sent to each distributor,
dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the distribution
compliance period (within the meaning of Regulation S) a confirmation
or notice to substantially the following effect:
The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "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 and the date of
closing of the offering, except in either case in accordance
with Regulation S or Rule 144A under the Act. Terms used in
this paragraph have the meanings given to them by Regulation
S.
(viii) it has not offered or sold and, prior to the date six
months after the date of issuance of the Securities, will not offer or
sell any Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or as agent) for the purposes
of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;
(ix) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom;
(x) 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 FSMA) received by it in connection with the issue or
sale of any Securities, in circumstances in which section 21(1) of the
FSMA does not apply to the Company;
-13-
(xi) it is a person whose ordinary activities involve it in
acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of its business and it has not offered or
sold and will not offer or sell any Securities other than 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 who it is reasonable to expect will acquire, hold,
manage or dispose of investments (as principal or agent) for the
purposes of their businesses where the issue of the Securities would
otherwise constitute a contravention of section 19 of the FSMA by the
Company; and
(xii) it is an "accredited investor" (as defined in Rule
501(a) of Regulation D).
5. Agreements. Each Issuer agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as they may
reasonably request.
(b) The Company will not amend or supplement the Final
Memorandum without the prior written consent of the Representatives.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Representatives may
designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event
shall any Issuer be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Company will promptly
advise the Representatives of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
-14-
(e) The Issuers will not, and will not permit any of their
Affiliates to, resell any Securities that have been acquired by any of
them.
(f) None of the Issuers nor any of their Affiliates, nor any
person acting on behalf of any of them will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of
the Securities under the Act.
(g) None of the Issuers nor any of their Affiliates, nor any
person acting on behalf of any of them will engage in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in
the United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
(i) None of the Issuers nor any of their Affiliates, nor any
person acting on behalf of any of them will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) No Issuer will take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(l) The Issuers agree to pay the costs and expenses relating
to the following matters: (i) the preparation of, and all fees and
expenses for, lien searches and recordings and filings pursuant to the
Security Documents, the issuance of the Securities and the fees of the
Trustee and the Collateral Agent; (ii) the preparation, printing or
reproduction of the Preliminary Memorandum and Final Memorandum and
-15-
each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Preliminary
Memorandum and Final Memorandum, and all amendments or supplements to
either of them, as may, in each case, be reasonably requested for use
in connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities;
(v) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Initial Purchasers relating to such registration and
qualification); (vii) admitting the Securities for trading in the
PORTAL Market; (viii) the transportation and other expenses incurred by
or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the
fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the
Company; and (x) all other costs and expenses incident to the
performance by the Issuers of their obligations hereunder.
(m) The Issuers will comply in all material respects with all
applicable securities and other laws, rules and regulations, including,
without limitation, the Sarbanes Oxley Act, and use their reasonable
best efforts to cause the Issuers' directors and officers, in their
capacities as such, to comply in all material respects with such laws,
rules and regulations, including, without limitation, the Sarbanes
Oxley Act.
(n) No Issuer will take any action or omit to take any action
(such as issuing any press release relating to any Securities without
an appropriate legend) which may result in the loss by any of the
Initial Purchasers of the ability to rely on any stabilization safe
harbor provided by the Financial Services Authority under the FSMA.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Issuers contained herein at the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Issuers made in any certificates pursuant to the provisions hereof, to
the performance by the Issuers of their obligations hereunder and to the
following additional conditions:
(a) The Company shall have requested and caused Holland &
Knight LLP, counsel for the Issuers, to furnish to the Representatives
its opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
-16-
(i) each Issuer which is a Florida, New York or Delaware
corporation, limited liability company or limited partnership has been
duly incorporated or organized and is validly existing as a
corporation, limited liability company or limited partnership in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate, limited liability company or limited
partnership power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in
the Final Memorandum;
(ii) all the outstanding shares of capital stock of the
Company and, to such counsel's knowledge, each Guarantor which is a
corporation, have been duly authorized and validly issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock of each such
Guarantor are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest;
(iii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantors in accordance with
its terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity); the issuance of the Securities has
been duly authorized and, when executed and, in the case of the Notes,
authenticated, in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers under this
Agreement, the Securities will constitute legal, valid, binding and
enforceable obligations of the Company and the Guarantors entitled to
the benefits of the Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); the
Security Documents have been duly authorized, executed and delivered
and constitute the legal, valid, binding and enforceable agreements of
the Issuers party thereto (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and to general principles of equity); and the statements set
forth under the heading "Description of the Notes" in the Final
Memorandum, insofar as such statements purport to summarize certain
provisions of the Securities, the Indenture and the Security Documents,
are accurate;
(iv) other than as described in the Final Memorandum, to the
knowledge of such counsel, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property that would be required to be
disclosed in a registration statement filed
-17-
under the Act; and the statements in the Final Memorandum under the
headings "Business--Legal Proceedings," "Description of Material
Indebtedness and Preferred Stock" and "Important Federal Income Tax
Considerations" accurately summarize the matters therein described;
(v) such counsel has no reason to believe that at the
Execution Time and on the Closing Date the Final Memorandum contained
or contains any untrue statement of a material fact or omitted or omits
to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (in each case, other than the financial statements and other
financial information contained therein, as to which such counsel need
express no opinion);
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company and each Guarantor has all requisite
corporate, limited liability company or limited partnership power and
authority, has taken all requisite corporate, limited liability company
or limited partnership action, and has received and is in compliance
with all governmental, judicial and other authorizations, approvals and
orders necessary to enter into and perform this Agreement, the
Indenture, the Security Documents and the Securities, and no consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture and the Security
Documents, except such as may be required under the blue sky or
securities laws of any jurisdiction in connection with the purchase and
sale of the Securities by the Initial Purchasers in the manner
contemplated in this Agreement and the Final Memorandum and such other
approvals (specified in such opinion) as have been obtained;
(viii) neither the execution and delivery of the Indenture,
this Agreement or the Security Documents, the issue and sale of the
Securities, the consummation of any other of the transactions
contemplated in the Indenture or this Agreement, the performance by
each Issuer of its obligations under the Security Documents to which it
is a party, nor the fulfillment of the terms hereof or of the Indenture
will result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or asset of the Company or its
subsidiaries pursuant to, (i) the charter (including any certificates
of designation) or by-laws of the Company or its subsidiaries; (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries
is a party or bound or to which its respective property is subject and
which has been filed as an exhibit to any Company filing under the Act
or the Exchange Act, except that such counsel need express no opinion
as to contracts, agreements and other instruments
-18-
relating to broadcast station purchases and sales which are dated prior
to June 1, 1999; or (iii) any statute, law, rule, regulation, or, to
such counsel's knowledge, any judgment, order or decree applicable to
the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of its subsidiaries or any of
their respective properties;
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein, no
registration of the Securities under the Act, and no qualification of
an indenture under the Trust Indenture Act, are required for the offer
and sale by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement;
(x) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum, will not be an
"investment company" as defined in the Investment Company Act without
taking account of any exemption arising out of the number of holders of
the Company's securities;
(xi) Based upon a review of the publicly available files of
the FCC, (a) the Company and its subsidiaries hold the FCC Licenses
with respect to each of the stations set forth in the table under
"Business--Distribution" in the Final Memorandum (except as otherwise
disclosed therein) and (b) each of the FCC Licenses authorizes
television broadcast station construction or operation by the holder
thereof using the broadcast channel assignment and serving the
community of license that is identified in such table;
(xii) To such counsel's knowledge, based upon the review of
the publicly available records of the FCC and inquiry to officers of
the Company, there is no order, judgment, decree, notice of apparent
liability, or order of forfeiture outstanding, and no petition,
objection, notice of apparent liability, order of forfeiture,
investigation, complaint, or other proceeding pending before the FCC
against the Stations or the FCC Licenses that reasonably could be
expected to result in the termination, revocation, suspension, or
denial of renewal of any of the FCC Licenses, except for rule making
and other similar proceedings generally applicable to the television
broadcasting industry or substantial segments thereof;
(xiii) To such counsel's knowledge based upon the review of
the publicly available files of the FCC and inquiry to officers of the
Company, other than as disclosed in the Final Memorandum (a) there are
no license renewal proceedings (other than applications for renewal
filed in the ordinary course) pending for any of the FCC Licenses; and
(b) except as set forth in the FCC authorizations for the FCC Licenses
or imposed by the generally applicable rules, regulations and policies
of the FCC, none of the FCC Licenses is subject to any condition
imposed by the FCC that reasonably could be expected to have a material
adverse effect on the Company's ability to conduct its broadcast
operations as described in the Final Memorandum, taken as a whole;
-19-
(xiv) The issuance, sale and delivery of the Securities
pursuant to this Agreement and the execution and delivery of the
Securities (A) do not require any consent or authorization from the
FCC, and (B) do not constitute a violation of the Communications Act or
the published rules and regulations of the FCC promulgated thereunder;
(xv) The statements in the Final Memorandum under the captions
"Risk Factors-- Risks Relating to Our Business-- We are required by the
FCC to abandon the analog broadcast service of 23 of our full power
stations occupying the 700 MHz spectrum and may suffer adverse
consequences if we are unable to secure alternative distribution on
reasonable terms," "Risk Factors--Risks Relating to Our Business--We
could be adversely affected by actions of the FCC, the Congress and the
courts that could alter broadcast television ownership rules in a way
that would materially affect our present operations or future business
alternatives," "Risk Factors--Risks Relating to Our Industry-- Our
business is subject to extensive and changing regulation that could
increase our costs, expose us to greater competition, or otherwise
adversely affect the ownership and operation of our stations or our
business strategies," "Risk Factors--Risks Relating to Our Industry--
We believe that the success of our television operations depends to a
significant extent upon access to households served by cable television
systems. If the law requiring cable system operators to carry our
signal were to change, we might lose access to cable television
households, which could adversely affect our operations" and
"Business-- Federal Regulation of Broadcasting," insofar as they
constitute summaries of the Communications Act and the published rules
and regulations of the FCC promulgated thereunder, have been reviewed
by such counsel and are accurate in all material respects;
(xvi) The execution, delivery and performance of this
Agreement by the Company and the Guarantors and the consummation of the
Transactions (A) do not require any consent or authorization from the
FCC, and (B) do not violate the Communications Act and the rules and
regulations promulgated thereunder;
(xvii) There are no restrictions or limitations imposed by the
FCC on the ability of the Company to make cash payments in respect of
the Securities in accordance with their terms;
(xviii) The Indenture and the Securities and the interest
provided for therein will not violate any law, statute, or regulation
of the State of Florida relating to usury, provided that the persons
party thereto have not and do not reserve, charge, take, or receive,
directly or indirectly, at any time, interest or other sums deemed to
be in the nature of interest in an amount exceeding the equivalent of
the rate of 25% simple interest per year, calculated on the basis of a
365 day year and the actual number of days elapsed;
-20-
(xix) The Security Documents are in form sufficient to create
a valid security interest in favor of the Collateral Agent in the
Collateral;
(xx) Each of the Uniform Commercial Code financing statements
(the "Financing Statements") attached to such opinion as an exhibit is
in appropriate form for filing in the Office of the Secretary of State
of the jurisdiction indicated on the face of such Financing Statement.
Upon the filing of the applicable Financing Statements in such
appropriate form in each applicable state, the Collateral Agent will
have a perfected security interest in that portion of the Collateral
(the "Filing Collateral") in which a security interest can be perfected
by the filing of a financing statement under the Uniform Commercial
Code as currently in effect in each such state. The filing of the
Financing Statements with the offices set forth in this paragraph is
the only recording or filing necessary to perfect the security interest
in the Filing Collateral;
(xxi) The recordation of the assignment of security interest
in trademarks pursuant to the Security Agreement filed in connection
with the Indenture in the United States Patent and Trademark Office and
the filings referred to in paragraph (xx) above together will be
effective, under applicable law, to perfect the security interests
granted to the Collateral Agent under the Security Agreement in the
trademarks owned of record by the Issuers and registered with the
United States Patent and Trademark Office as against any subsequent
lien holder;
(xxii) The recordation of the assignment of security interests
in copyrights pursuant to the Security Agreement filed in connection
with the Indenture in the United States Copyright Office and the
filings referred to in paragraph (xx) above together will be effective,
under applicable law, to perfect the security interests granted to the
Collateral Agent under the Security Agreement in the copyrights owned
of record by the Issuers and registered with the United States
Copyright Office as against any subsequent lien holder;
(xxiii) The execution and delivery of the Control Agreements
attached to such opinion as exhibits will be effective to establish
control and perfect the security interests of the Collateral Agent in
the deposit accounts and securities accounts set forth on Schedule 6 to
the Security Agreement under the provisions of the New York Uniform
Commercial Code applicable to such type of collateral;
(xxiv) Each of the Pledged Notes under which any Issuer is the
obligor has been duly authorized, executed and delivered by the
applicable Issuer and is enforceable against such Issuer in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity);
-21-
(xxv) The delivery and continued possession in New York by the
Collateral Agent of (i) certificates representing the Pledged Stock (as
defined in the Security Agreement), together with stock powers properly
executed in blank with respect thereto, and (ii) the Pledged Notes (as
defined in the Security Agreement) duly indorsed in favor of the
Collateral Agent or in blank, will be effective to perfect the security
interests of the Collateral Agent in the Pledged Stock and the Pledged
Notes;
(xxvi) No taxes or other charges, including, without
limitation, intangible or documentary stamp taxes, recording taxes,
transfer taxes or similar charges, are payable to New York, Delaware or
Florida or to any jurisdiction therein on account of the execution and
delivery of the Indenture or the Security Documents or the creation of
the indebtedness evidenced or secured by any of the foregoing or the
recording or filings contemplated by paragraphs (xx) and (xxi) above,
except for filing or recording fees;
(xxvii) Neither the Trustee, the Collateral Agent nor any
Initial Purchaser is required (i) to be qualified to transact business,
file any designation for service of process, file any reports or pay
any taxes in New York, Delaware or Florida or (ii) to comply with any
statutory or regulatory requirement applicable only to financial
institutions chartered or qualified to do business in New York,
Delaware, or Florida in each case, solely by reason of the execution
and delivery of any of the Indenture or the Security Documents or by
reason of its participation in any of the transactions contemplated
thereby, including, without limitation, the making and receipt of
payments pursuant thereto and the exercise of any remedy thereunder;
and
(xxviii) All obligations of the Issuers now or hereafter
existing under or in respect of the Securities constitute "Senior Debt"
or "Guarantor Senior Debt" under each class of the Company's
subordinated debt, to the extent they are obligations of the Issuers in
respect of principal, interest, reimbursements of amounts drawn under
letters of credit, penalties, fees, expenses, indemnifications or other
reimbursements.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the jurisdiction of incorporation of the Company, the State of
Delaware, the State of Florida, the State of New York or the Federal
laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel
for the Initial Purchasers; and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Final Memorandum in
this Section 6(a) include any amendment or supplement thereto at the
Closing Date.
-22-
(b) The Company shall have requested and caused Xxxxxxx X.
Xxxxxxxx, Esq., Executive Vice President and Chief Legal Officer of the
Company, to furnish to the Representatives his opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each Issuer which is a New York corporation or
limited liability company has been duly incorporated or
organized and is validly existing as a corporation or limited
liability company in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate or limited liability company power and authority to
own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Final
Memorandum and to perform its obligations under the Indenture
and the Security Documents to which it is a party;
(ii) all the outstanding shares of capital stock of the
Company and each Guarantor have been duly authorized and
validly issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of each of the Guarantors
are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or
encumbrances other than Permitted Liens (as defined in the
Indenture) and liens to be released on the Closing Date;
(iii) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity); the
issuance of the Securities has been duly authorized and, when
executed and, in the case of the Notes, authenticated, in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers under this
Agreement, will constitute legal, valid, binding and
enforceable obligations of the Company entitled to the
benefits of the Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity); each Security Document has been duly
authorized, executed and delivered and constitutes the legal,
valid, binding and enforceable agreement of the Issuers party
thereto (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity);
-23-
(iv) neither the execution and delivery of the Indenture,
this Agreement or the Security Documents, the issue and sale
of the Securities, nor the consummation of any other of the
Transactions, nor the fulfillment of the terms hereof or
thereof will conflict with or result in a breach or violation
of or imposition of any lien, charge or encumbrance upon any
property or asset of the Company or its subsidiaries pursuant
to, (i) the charter (including any certificates of
designation) or by-laws of the Company or its subsidiaries;
(ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument known
to such counsel, after due inquiry, to which the Company or
any of its subsidiaries is a party or bound or to which its
respective property is subject; or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the
Company or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company, any of
its subsidiaries or any of their respective properties;
(v) except as disclosed in the Final Memorandum, there is
no pending or, to the knowledge of such counsel, threatened
action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or
their property that would be required to be disclosed in a
registration statement filed under the Act; and
(vi) such counsel has no reason to believe that at the
Execution Time and on the Closing Date the Final Memorandum
contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case,
other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion).
In rendering such opinion, such counsel may limit his opinion
to matters involving the application of laws of the State of New York
and the Federal laws of the United States (excluding the Communications
Act and federal securities laws) and may rely as to matters of fact, to
the extent he deems proper, on certificates of responsible officers of
the Company and public officials. References to the Final Memorandum in
this Section 6(b) include any amendment or supplement thereto at the
Closing Date.
(c) The Representatives shall have received from Xxxxxx Xxxxxx
& Xxxxxxx LLP, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the issuance and sale of the Securities, the Indenture,
the Security Documents, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
-24-
(d) The Company and each Guarantor shall have furnished to the
Representatives a certificate of the Company and each Guarantor, signed
by the Chairman of the Board or the President and the principal
financial or accounting officer of the Company and each Guarantor,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment
or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company and
the Guarantors in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, the Company
shall have requested and caused PricewaterhouseCoopers LLP to furnish
to the Representatives letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that through March 27, 2003 they were
independent accountants within the meaning of the Act and the Exchange
Act and the applicable rules and regulations thereunder, that they have
performed a review of the interim financial information of the Company
for the nine-month period ended September 30, 2002 and as at September
30, 2002, and stating in effect that:
(i) in their opinion the audited financial statements
included in the Final Memorandum and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations thereunder;
(ii) on the basis of their limited review in accordance
with the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the nine-month period ended September 30,
2002, and as at September 30, 2002; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; nothing came to their
attention which caused them to believe that the unaudited
financial statements for the nine-month period ended September
30, 2002, and as at September 30, 2002, included in the Final
Memorandum do not comply as to
-25-
form in all material respects with applicable accounting
requirements and with the published rules and regulations of
the Commission with respect to financial statements included
or incorporated in quarterly reports on Form 10-Q under the
Exchange Act; or such unaudited financial statements are not
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Final Memorandum; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) for the years and interim
periods during which PricewaterhouseCoopers LLP served as the
Company's auditors set forth in the Final Memorandum,
including any such information set forth under the captions
"Summary Consolidated Financial and Other Data" and "Selected
Consolidated Financial and Other Data" in the Final Memorandum
and the information included in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
the Final Memorandum agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the
applicable letter.
(f) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Ernst & Young LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the applicable
rules and regulations thereunder, that they have performed an audit of
the interim financial information of the Company for the nine-month
period ended September 30, 2003 and as at September 30, 2003, and
stating in effect that in their opinion, except as otherwise set forth
in their report, the audited financial statements included in the Final
Memorandum and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations thereunder, and
further stating that:
(i) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but
not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and the audit committee of the Company
and the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and
accounting
-26-
matters of the Company and its subsidiaries as to transactions
and events subsequent to September 30, 2003, nothing came to
their attention which caused them to believe that:
(1) with respect to the period subsequent to
September 30, 2003, there were any changes, at November
30, 2003, in total debt or total mandatorily redeemable
preferred stock or decreases in the stockholders' equity
(deficit) of the Company as compared with the amounts
shown on the September 30, 2003 consolidated balance
sheet included in the Final Memorandum, or for the
period from October 1, 2003 to November 30, 2003 there
were any decreases, as compared with the corresponding
period of the prior year in net revenues or increases in
net loss, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the significance thereof unless such
explanation is not deemed necessary by the
Representatives; or
(2) on the basis of reading of the minutes of the
meetings of the stockholders, directors and audit
committee of the Company and its subsidiaries and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of
the Company and its subsidiaries as to transactions and
events subsequent to December 1, 2003, nothing came to
their attention which caused them to believe, with
respect to the period subsequent to September 30, 2003,
there were any changes, at the most recently
ascertainable date, in total debt or total redeemable
preferred stock or decreases in the stockholders' equity
(deficit) of the Company as compared with the amounts
shown on the September 30, 2003 consolidated balance
sheet included in the Final Memorandum, or for the
period from December 1, 2003 to such date there were any
decreases, as compared with the corresponding period of
the prior year in net revenues or increases in net loss,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless such explanation is not
deemed necessary by the Representatives;
(ii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Final Memorandum, including the information set forth
under the captions "Summary Consolidated Financial and Other Data" and
"Selected Consolidated Financial and Other Data" in the Final
Memorandum and the information included in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Final
Memorandum agrees with the accounting records of the Company for the
periods reviewed by Ernst & Young LLP and its subsidiaries, excluding
any questions of legal interpretation.
-27-
References to the Final Memorandum in this Section 6(f)
include any amendment or supplement thereto at the date of the
applicable letter.
(g) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of
any amendment or supplement thereto), there shall not have been (i) any
change, decrease or increase specified in the letter or letters
referred to in paragraph (f) of this Section 6; or (ii) any change, or
any development involving a prospective change, in or affecting the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(h) The Securities shall have been designated as
PORTAL-eligible securities in accordance with the rules and regulations
of the NASD, and the Securities shall be eligible for clearance and
settlement through The Depository Trust Company.
(i) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(j) On the Closing Date, the Company shall have furnished to
the Representatives the Security Agreement, duly executed by each
Issuer, together with:
(A) evidence satisfactory to the Representatives that
(upon filing in the appropriate filing offices referred to in
clause (x) below) the Collateral Agent (for the benefit of the
Secured Parties (as defined in the Security Agreement)) has a
valid and perfected first priority security interest in the
Collateral, including (x) such documents duly executed by each
Issuer as the Representatives may request with respect to the
perfection of the Collateral Agent's security interests in the
Collateral (including financing statements under the UCC,
trademark and copyright security agreements and other
applicable documents under the laws of any jurisdiction with
respect to the perfection of liens created by the Security
Documents), (y) copies of UCC search reports as of a recent
date listing all effective financing statements that name any
Issuer as debtor, together with copies of such financing
statements, none of which shall cover the Collateral except
for those which shall be
-28-
terminated on the Closing Date) and (z) evidence of
termination and release of any existing Liens which are not
Permitted Liens (including signed UCC-3 termination
statements, releases and pay-off letters in respect of the
Credit Agreement);
(B) share certificates representing all certificated
Pledged Stock and stock powers for such share certificates
executed in blank;
(C) all instruments representing Pledged Notes, in form
and substance reasonably satisfactory to the Representative,
duly endorsed in favor of the Collateral Agent or in blank
together with a summary (certified by a financial or
accounting officer of the Company) of outstanding intercompany
loan balances as of a recent date; and
(D) Control Agreements with respect to each account
listed on Schedule 6 to the Security Agreement.
(k) The Company shall have furnished to the Representatives
evidence satisfactory to the Representatives that the insurance
policies required by the Indenture are in full force and effect
together with, in respect of those insurance policies maintained with
respect to the properties of the Issuers, (A) endorsements naming the
Collateral Agent, on behalf of the Secured Parties, as an additional
insured and/or loss payee and (B) a provision that cancellation,
material addition in amount or material change in coverage shall not be
effective until 30 days after written notice to the Collateral Agent.
(l) Simultaneously with the Closing, the other Transactions
shall be consummated.
(m) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been satisfied in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance, as contemplated by the provisions of this
Agreement, to the Representatives and counsel for the Initial Purchasers, this
Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will
be delivered at the office of counsel for the Initial Purchasers, c/o Xxxxxx
Xxxxxx & Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, on the Closing Date.
-29-
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of any Issuer to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any of the Initial Purchasers, the Issuers will reimburse the Initial Purchasers
severally through Citigroup on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Issuers, jointly and severally, agree to indemnify and
hold harmless each Initial Purchaser, the directors, officers, employees and
agents of each Initial Purchaser and each person who controls any Initial
Purchaser within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum, the Final
Memorandum (or in any supplement or amendment thereto) or any information
provided by any Issuer to any holder or prospective purchaser of Securities
pursuant to Section 5(h), or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Issuers will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary Memorandum or
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchasers through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Issuers may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Issuers, each of their directors, each of their
officers, and each person who controls any Issuer within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Issuers to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Issuers by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Issuers
acknowledge that the statements set forth
-30-
in the last paragraph of the cover page regarding the delivery of the Securities
and in the ninth paragraph under the heading "Plan of Distribution," constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
(except for local counsel) retained by the indemnified party or parties except
as set forth below); provided, however, that such counsel shall be satisfactory
to the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which any Issuer and
one or more of the Initial Purchasers may be subject in such proportion as is
appropriate
-31-
to reflect the relative benefits received by the Issuers on the one hand and by
the Initial Purchasers on the other from the offering of the Securities;
provided, however, that in no case shall any Initial Purchaser (except as may be
provided in any agreement among the Initial Purchasers relating to the offering
of the Securities) be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by such Initial
Purchaser hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Issuers and the Initial Purchasers
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Issuers on the
one hand and of the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by the Company, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Issuers on the one hand or the Initial Purchasers on the other, the intent of
the parties and their relative knowledge, information and opportunity to correct
or prevent such untrue statement or omission. The Issuers and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls any Issuer within the meaning of either the Act or
the Exchange Act and each officer and director of any Issuer shall have the same
rights to contribution as the Issuers, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without
-32-
liability to any nondefaulting Initial Purchaser, the Company or the Guarantors.
In the event of a default by any Initial Purchaser as set forth in this Section
9, the Closing Date shall be postponed for such period, not exceeding five
Business Days, as the Representatives shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to any Issuer or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the American Stock Exchange or trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on either of such Exchanges; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantors or its or their officers and of the Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers, the Company, the Guarantors or any of the indemnified persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (212)
000-0000) and confirmed to the Citigroup General Counsel at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Legal Officer; or, if sent to
the Company or any Guarantor, will be mailed, delivered or telefaxed to the
General Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Xxxxxx Communications Corporation, at 000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof, and, except as expressly
set forth in Section 5(h) hereof, no other person will have any right or
obligation hereunder.
-33-
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Waiver of Tax Confidentiality. Notwithstanding anything
herein to the contrary, purchasers of the Securities (and each employee,
representative or other agent of the Issuers) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any transaction contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to the purchasers
of the Securities relating to such U.S. tax treatment and U.S tax structure,
other than any information for which nondisclosure is reasonably necessary in
order to comply with applicable securities laws.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
17. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
-34-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
among the Company, the Guarantors and the several Initial Purchasers.
Very truly yours,
XXXXXX COMMUNICATIONS
CORPORATION
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Senior Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first Above written.
CITIGROUP GLOBAL MARKETS INC.
BEAR, XXXXXXX & CO. INC.
CIBC WORLD MARKETS CORP.
By: CITIGROUP GLOBAL MARKETS INC.
By:
----------------------------
Name:
Title:
-35-
SUBSIDIARY GUARANTORS:
BUD HITS, INC.
BUD SONGS, INC.
CLEARLAKE PRODUCTIONS, INC.
FLAGLER PRODUCTIONS, INC.
IRON MOUNTAIN PRODUCTIONS, INC.
OCEAN STATE TELEVISION, LLC
PAX HITS PUBLISHING, INC.
PAX INTERNET, INC.
PAX NET, INC.
PAX NET TELEVISION PRODUCTIONS, INC.
XXXXXX AKRON LICENSE, INC.
XXXXXX ALBANY LICENSE, INC.
XXXXXX ALBUQUERQUE LICENSE, INC.
XXXXXX ATLANTA LICENSE, INC.
XXXXXX BATTLE CREEK LICENSE, INC.
XXXXXX BIRMINGHAM LICENSE, INC.
XXXXXX BOSTON LICENSE, INC.
XXXXXX BOSTON-68 LICENSE, INC.
XXXXXX BUFFALO LICENSE, INC.
XXXXXX CEDAR RAPIDS LICENSE, INC.
XXXXXX CHARLESTON LICENSE, INC.
XXXXXX CHICAGO LICENSE, INC.
XXXXXX COMMUNICATIONS LICENSE COMPANY, LLC
XXXXXX COMMUNICATIONS LPTV, INC.
XXXXXX COMMUNICATIONS MANAGEMENT COMPANY, INC.
XXXXXX COMMUNICATIONS OF AKRON-23, INC.
XXXXXX COMMUNICATIONS OF ALBANY-55, INC.
XXXXXX COMMUNICATIONS OF ALBUQUERQUE-14, INC.
XXXXXX COMMUNICATIONS OF ATLANTA-14, INC.
XXXXXX COMMUNICATIONS OF BATTLE CREEK-43, INC.
XXXXXX COMMUNICATIONS OF BIRMINGHAM-44, INC.
XXXXXX COMMUNICATIONS OF BOSTON-46, INC.
XXXXXX COMMUNICATIONS OF BOSTON-60, INC.
-36-
XXXXXX COMMUNICATIONS OF BOSTON-68, INC.
XXXXXX COMMUNICATIONS OF BUFFALO-51, INC.
XXXXXX COMMUNICATIONS OF CEDAR RAPIDS-48, INC.
XXXXXX COMMUNICATIONS OF CHARLESTON-29, INC.
XXXXXX COMMUNICATIONS OF CHICAGO-38, INC.
XXXXXX COMMUNICATIONS OF DALLAS-68, INC.
XXXXXX COMMUNICATIONS OF XXXXXXXXX-67, INC.
XXXXXX COMMUNICATIONS OF DENVER-59, INC.
XXXXXX COMMUNICATIONS OF DES MOINES-39, INC.
XXXXXX COMMUNICATIONS OF DETROIT-31, INC.
XXXXXX COMMUNICATIONS OF FAYETTEVILLE-62, INC.
XXXXXX COMMUNICATIONS OF FRESNO-61, INC.
XXXXXX COMMUNICATIONS OF GREENSBORO-16, INC.
XXXXXX COMMUNICATIONS OF GREENVILLE-38, INC.
XXXXXX COMMUNICATIONS OF HARTFORD-26, INC.
XXXXXX COMMUNICATIONS OF HONOLULU-66, INC.
XXXXXX COMMUNICATIONS OF HOUSTON-49, INC.
XXXXXX COMMUNICATIONS OF INDIANAPOLIS-63, INC.
XXXXXX COMMUNICATIONS OF JACKSONVILLE-21, INC.
XXXXXX COMMUNICATIONS OF JACKSONVILLE-35, INC.
XXXXXX COMMUNICATIONS OF KANSAS CITY-50, INC.
XXXXXX COMMUNICATIONS OF KNOXVILLE-54, INC.
XXXXXX COMMUNICATIONS OF LEXINGTON-67, INC.
-00-
XXXXXX XXXXXXXXXXXXXX XX XXX XXXXXXX-00, INC.
XXXXXX COMMUNICATIONS OF LOUISVILLE-21, INC.
XXXXXX COMMUNICATIONS OF MEMPHIS-50, INC.
XXXXXX COMMUNICATIONS OF MIAMI-35, INC.
XXXXXX COMMUNICATIONS OF MILWAUKEE-55, INC.
XXXXXX COMMUNICATIONS OF MINNEAPOLIS-41, INC.
XXXXXX COMMUNICATIONS OF MOBILE-61, INC.
XXXXXX COMMUNICATIONS OF NASHVILLE-28, INC.
XXXXXX COMMUNICATIONS OF NEW ORLEANS-49, INC.
XXXXXX COMMUNICATIONS OF NEW YORK-31, INC.
XXXXXX COMMUNICATIONS OF NORFOLK-49, INC.
XXXXXX COMMUNICATIONS OF OKLAHOMA CITY-62, INC.
XXXXXX COMMUNICATIONS OF ORLANDO-56, INC.
XXXXXX COMMUNICATIONS OF PHILADELPHIA-61, INC.
XXXXXX COMMUNICATIONS OF PHOENIX-13, INC.
XXXXXX COMMUNICATIONS OF PHOENIX-51, INC.
XXXXXX COMMUNICATIONS OF PITTSBURGH-40, INC.
XXXXXX COMMUNICATIONS OF PORTLAND-22, INC.
XXXXXX COMMUNICATIONS OF PORTLAND-23, INC.
XXXXXX COMMUNICATIONS OF PROVIDENCE-69, INC.
XXXXXX COMMUNICATIONS OF RALEIGH-47, INC.
XXXXXX COMMUNICATIONS OF ROANOKE-38, INC.
XXXXXX COMMUNICATIONS OF SACRAMENTO-29, INC.
-38-
XXXXXX COMMUNICATIONS OF SALT LAKE CITY-30, INC.
XXXXXX COMMUNICATIONS OF SAN ANTONIO-26, INC.
XXXXXX COMMUNICATIONS OF SAN XXXX-65, INC.
XXXXXX COMMUNICATIONS OF SAN XXXX, INC.
XXXXXX COMMUNICATIONS OF SCRANTON-64, INC.
XXXXXX COMMUNICATIONS OF SEATTLE-33, INC.
XXXXXX COMMUNICATIONS OF SHREVEPORT-21, INC.
XXXXXX COMMUNICATIONS OF SPOKANE-34, INC.
XXXXXX COMMUNICATIONS OF ST. CROIX-15, INC.
XXXXXX COMMUNICATIONS OF ST. LOUIS-13, INC.
XXXXXX COMMUNICATIONS OF SYRACUSE-56, INC.
XXXXXX COMMUNICATIONS OF TAMPA-66, INC.
XXXXXX COMMUNICATIONS OF TUCSON-46, INC.
XXXXXX COMMUNICATIONS OF TULSA-44, INC.
XXXXXX COMMUNICATIONS OF WASHINGTON-60, INC.
XXXXXX COMMUNICATIONS OF WASHINGTON-66, INC.
XXXXXX COMMUNICATIONS OF WAUSAU-46, INC.
XXXXXX COMMUNICATIONS OF WEST PALM BEACH-67, INC.
XXXXXX COMMUNICATIONS TELEVISION, INC.
XXXXXX XXXXXX LICENSE, INC.
XXXXXX XXXXXXXXX LICENSE, INC.
XXXXXX DENVER LICENSE, INC.
XXXXXX DES MOINES LICENSE, INC.
XXXXXX DETROIT LICENSE, INC.
XXXXXX DEVELOPMENT, INC.
XXXXXX FAYETTEVILLE LICENSE, INC.
XXXXXX FRESNO LICENSE, INC.
-39-
XXXXXX GREENSBORO LICENSE, INC.
XXXXXX GREENVILLE LICENSE, INC.
XXXXXX HARTFORD HOLDINGS, INC.
XXXXXX HARTFORD LICENSE, INC.
XXXXXX HAWAII LICENSE, INC.
XXXXXX HOLDINGS, INC.
XXXXXX HOUSTON LICENSE, INC.
XXXXXX INDIANAPOLIS HOLDINGS, INC.
XXXXXX INDIANAPOLIS LICENSE, INC.
XXXXXX JACKSONVILLE LICENSE, INC.
XXXXXX JAX LICENSE, INC.
XXXXXX KANSAS CITY LICENSE, INC.
XXXXXX KNOXVILLE LICENSE, INC.
XXXXXX LEXINGTON LICENSE, INC.
XXXXXX LOS ANGELES LICENSE, INC.
XXXXXX MERCHANDISING & LICENSING, INC.
XXXXXX MIAMI-35 LICENSE, INC.
XXXXXX MILWAUKEE LICENSE, INC.
XXXXXX MINNEAPOLIS LICENSE, INC.
XXXXXX MOBILE LICENSE, INC.
XXXXXX NEW YORK LICENSE, INC.
XXXXXX NORFOLK LICENSE, INC.
XXXXXX NORWELL HOLDINGS, INC.
XXXXXX NORWELL INTEREST, INC.
XXXXXX NORWELL INTERMEDIARY, INC.
XXXXXX OKLAHOMA CITY LICENSE, INC.
XXXXXX XXXXXXX LICENSE, INC.
XXXXXX PHILADELPHIA LICENSE, INC.
XXXXXX PHOENIX LICENSE, INC.
XXXXXX PORTLAND LICENSE, INC.
XXXXXX PRODUCTIONS, INC.
XXXXXX XXXXXXX LICENSE, INC.
XXXXXX ROANOKE LICENSE, INC.
XXXXXX SACRAMENTO LICENSE, INC.
XXXXXX SALEM LICENSE, INC.
XXXXXX SALT LAKE CITY LICENSE, INC.
XXXXXX SAN ANTONIO LICENSE, INC.
XXXXXX SAN XXXX LICENSE, INC.
XXXXXX SCRANTON LICENSE, INC.
XXXXXX SEATTLE LICENSE, INC.
XXXXXX SHREVEPORT LICENSE, INC.
XXXXXX SPOKANE LICENSE, INC.
XXXXXX SPORTS OF MIAMI, INC.
XXXXXX ST. CROIX LICENSE, INC.
XXXXXX SYRACUSE LICENSE, INC.
-40-
XXXXXX TAMPA-66 LICENSE, INC.
XXXXXX TELEVISION PRODUCTIONS, INC.
XXXXXX TELEVISION, INC.
XXXXXX TENNESSEE LICENSE, INC.
XXXXXX TULSA LICENSE, INC.
XXXXXX WASHINGTON LICENSE, INC.
XXXXXX WASHINGTON-60 LICENSE, INC.
XXXXXX WAUSAU LICENSE, INC.
XXXXXX WEST PALM BEACH HOLDINGS, INC.
XXXXXX WEST PALM BEACH LICENSE, INC.
PCC DIRECT, INC.
TRAVEL CHANNEL ACQUISITION CORPORATION
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President and Treasurer of
each of such Subsidiary Guarantors
AMERICA 51, L.P.
By: Xxxxxx Communications of Phoenix-51, Inc.,
its General Partner and Limited Partner
By: Xxxxxx Communications Television, Inc., its
Limited Partner
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President and Treasurer of
such General and Limited Partners
-41-
