EXHIBIT 1.1
Ziff ▇▇▇▇▇ Media Inc.
$250,000,000
12% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
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July 18, 2000
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
c/o Deutsche Bank Securities Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Ziff ▇▇▇▇▇ Media Inc., a Delaware corporation (the "Company"), and the
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Company's subsidiaries listed on the signature pages hereof (collectively, and
together with any subsidiary that in the future executes a supplemental
indenture pursuant to which such subsidiary agrees to guarantee the Notes (as
defined below), the "Subsidiary Guarantors") hereby confirm their agreement with
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you (the "Initial Purchasers"), as set forth below.
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1. The Securities. Subject to the terms and conditions herein
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contained, the Company proposes to issue and sell to the Initial Purchasers
$250,000,000 aggregate principal amount of its 12% Senior Subordinated Notes due
2010, Series A (the "Notes"). The Notes will be unconditionally guaranteed
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(collectively the "Guarantees") on a senior subordinated basis by each of the
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Subsidiary Guarantors. The Notes and the Guarantees are collectively referred to
herein as the "Securities." The Securities are to be issued under an indenture
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(the "Indenture") to be dated as of July 21, 2000 by and among the Company, the
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Subsidiary Guarantors and Bankers Trust Company, as Trustee (the "Trustee").
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The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom.
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In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated
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June 26, 2000 (the "Preliminary Memorandum") and a final offering memorandum
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dated July 18, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the
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Final Memorandum each herein being referred to as a "Memorandum") setting forth
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or including a description of the terms of the Securities, the terms of the
offering of the Securities, a description of the Company and its subsidiaries
and any material developments relating to the Company and the Subsidiary
Guarantors occurring after the date of the most recent historical financial
statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
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"Registration Rights Agreement"), pursuant to which the Company and the
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Subsidiary Guarantors have agreed, among other things, to file a registration
statement (the "Registration Statement") with the Securities and Exchange
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Commission (the "Commission") registering the Notes or the Exchange Notes (as
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defined in the Registration Rights Agreement) under the Act.
2. Representations and Warranties. The Company and each of the
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Subsidiary Guarantors, jointly and severally, represent and warrant to and agree
with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date thereof
and at all times subsequent thereto up to the Closing Date (as defined in
Section 3 below) contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance upon and
in conformity with information relating to either of the Initial Purchasers
furnished to the Company in writing by the Initial Purchasers expressly for use
in the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; all of
the subsidiaries of the Company are listed in Schedule 2 attached hereto (each,
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a "Subsidiary" and collectively, the "Subsidiaries"); all of the outstanding
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shares of capital stock of the Company and the Subsidiaries have been, and as of
the Closing Date will be, duly authorized and validly issued, are fully paid and
nonassessable and were
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not issued in violation of any preemptive or similar rights; all of the
outstanding shares of capital stock of the Company and of each of the
Subsidiaries will be free and clear of all liens, encumbrances, equities and
claims or restrictions on transferability (other than those imposed by the Act
and the securities or "Blue Sky" laws of certain jurisdictions) or voting;
except as set forth in the Final Memorandum, there are no (i) options, warrants
or other rights to purchase, (ii) agreements or other obligations to issue or
(iii) other rights to convert any obligation into, or exchange any securities
for, shares of capital stock of or ownership interests in the Company or any of
the Subsidiaries outstanding. Except for the Subsidiaries or as disclosed in the
Final Memorandum, the Company does not own, directly or indirectly, any shares
of capital stock or any other equity or long-term debt securities or have any
equity interest in any firm, partnership, joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted and as
described in the Final Memorandum; each of the Company and the Subsidiaries is
duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a "Material Adverse Effect").
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(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form contemplated by
the Indenture. The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company and, when executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to
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creditors' rights generally, and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(e) Each of the Subsidiary Guarantors has all requisite corporate
and/or other requisite power and authority to execute, deliver and perform each
of its obligations under the Guarantees and the guarantees of the Exchange Notes
and the Private Exchange Notes. The Guarantees, when issued, will be in the form
contemplated by the Indenture. The Guarantees and the guarantees of the Exchange
Notes and the Private Exchange Notes have been duly and validly authorized by
each of the Subsidiary Guarantors and, when executed by each of the Subsidiary
Guarantors and authenticated by the Trustee in accordance with the provisions of
the Indenture, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Subsidiary Guarantors,
entitled to the benefits of the Indenture and enforceable against the Subsidiary
Guarantors in accordance with their terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(f) Each of the Company and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Indenture. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the "TIA"). The
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Indenture has been duly and validly authorized by the Company and each of the
Subsidiary Guarantors and, when executed and delivered by the Company and each
of the Subsidiary Guarantors (assuming the due authorization, execution and
delivery by the Trustee), will constitute a valid and legally binding agreement
of the Company and each of the Subsidiary Guarantors, enforceable against the
Company and each of the Subsidiary Guarantors in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought.
(g) Each of the Company and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. The Registration Rights
Agreement has been duly and validly authorized by the Company and each of the
Subsidiary Guarantors and, when executed and delivered by the
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Company and each of the Subsidiary Guarantors (assuming the due authorization,
execution and delivery by you), will constitute a valid and legally binding
agreement of the Company and each of the Subsidiary Guarantors enforceable
against the Company and each of the Subsidiary Guarantors in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought and (B) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy considerations.
(h) Each of the Company and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. This Agreement and the consummation by the Company and each of the
Subsidiary Guarantors of the transactions contemplated hereby have been duly and
validly authorized by the Company and each of the Subsidiary Guarantors. This
Agreement has been duly executed and delivered by the Company and each of the
Subsidiary Guarantors.
(i) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the issuance and
sale by the Company of the Securities to the Initial Purchasers or the
consummation by the Company and the Subsidiary Guarantors of the other
transactions contemplated hereby, except such as have been obtained and such as
may be required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Securities by the Initial Purchasers. None of the
Company or the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to any of them or any of their respective properties or assets, except for any
such breach or violation that would not, individually or in the aggregate, have
a Material Adverse Effect, or (iii) in breach of or default under (nor has any
event occurred that, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which any of them is a party or to which any of them or their
respective properties or assets is subject (collectively, "Contracts"), except
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for any such breach, default, violation or event that would not, individually or
in the aggregate, have a Material Adverse Effect.
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(j) The execution, delivery and performance by the Company and the
Subsidiary Guarantors of this Agreement, the Indenture and the Registration
Rights Agreement and the consummation by the Company and the Subsidiary
Guarantors of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and sale of the Securities to the Initial
Purchasers) will not conflict with or constitute or result in a breach of or a
default under (or an event that with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or provisions
of any Contract, except for any such conflict, breach, violation, default or
event that would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws (or similar
organizational document) of the Company or any of the Subsidiaries or (iii)
(assuming compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the Initial
Purchasers in Section 8 hereof) any statute, judgment, decree, order, rule or
regulation applicable to the Company or any of the Subsidiaries or any of their
respective properties or assets, except for any such conflict, breach or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(k) The audited consolidated financial statements of the Company and
the Subsidiaries included in the Final Memorandum present fairly in all material
respects the financial position, results of operations and cash flows of the
Company and the Subsidiaries at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein.
The summary and selected financial and statistical data in the Final Memorandum
present fairly in all material respects the information shown therein and have
been prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein.
PricewaterhouseCoopers, L.L.P. (the "Independent Accountants") is an independent
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public accounting firm within the meaning of the Act and the rules and
regulations promulgated thereunder.
(l) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared in accordance with the
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Commission's rules and guidelines with respect to pro forma financial statements
and (iii) have been properly computed on the bases described therein; the
assumptions in the preparation of the pro forma financial data
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and other pro forma financial information included in the Final Memorandum are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(m) There is not pending or, to the knowledge of the Company or any of
the Subsidiaries, threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of the Subsidiaries is a party, or to
which the property or assets of the Company or any of the Subsidiaries are
subject, before or brought by any court, arbitrator or governmental agency or
body that, if determined adversely to the Company or any of the Subsidiaries,
would, individually or in the aggregate, have a Material Adverse Effect or that
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Securities to be sold hereunder or the consummation
of the other transactions described in the Final Memorandum.
(n) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, presently required or necessary to own or lease, as
the case may be, and to operate its respective properties and to carry on its
respective businesses as now or proposed to be conducted as set forth in the
Final Memorandum ("Permits"), except where the failure to obtain such Permits
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would not, individually or in the aggregate, have a Material Adverse Effect;
each of the Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits 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 holder of any
such Permit; and none of the Company or the Subsidiaries has received any notice
of any proceeding relating to revocation or modification of any such Permit,
except as described in the Final Memorandum and except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the Company or
the Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business, which
liabilities, obligations, transactions or contracts would, individually or in
the aggregate, be material to the general affairs, management, business,
condition (financial
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or otherwise) or results of operations of the Companies and its Subsidiaries,
taken as a whole, (ii) none of the Company or the Subsidiaries has purchased any
of its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock (other than with
respect to any of such Subsidiaries, the purchase of, or dividend or
distribution on, capital stock owned by the Company) and (iii) there shall not
have been any change in the capital stock or long-term indebtedness of the
Company or the Subsidiaries.
(p) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies that the Company or any Subsidiary is contesting in
good faith and for which the Company or such Subsidiary has provided adequate
reserves, there is no tax deficiency that has been asserted against the Company
or any of the Subsidiaries that would have, individually or in the aggregate, a
Material Adverse Effect.
(q) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources that the Company and the
Subsidiaries believe to be reliable and accurate.
(r) None of the Company, the Subsidiaries or any agent acting on their
behalf has taken or will take any action that might cause this Agreement or the
sale of the Notes to violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
(s) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final Memorandum or to
the extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect. All leases, contracts and agreements
to which the Company or any of the Subsidiaries is a party or by which any of
them is bound are valid and enforceable against the Company or such Subsidiary,
and are valid and enforceable against the other party or parties thereto and are
in full force and effect with only such exceptions as would
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not, individually or in the aggregate, have a Material Adverse Effect. The
Company and the Subsidiaries own or possess adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and none of the Company or the Subsidiaries
has received any notice of infringement of or conflict with (or knows of any
such infringement of or conflict with) asserted rights of others with respect to
any patents, trademarks, service marks, trade names, copyrights or know-how
that, if such assertion of infringement or conflict were sustained, would have a
Material Adverse Effect.
(t) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective properties or
assets that would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum, nor are there any material
contracts or other documents that would be required to be described in a
prospectus pursuant to the Act that are not described in the Final Memorandum.
(u) Except as would not, individually or in the aggregate, have a
Material Adverse Effect (A) each of the Company and the Subsidiaries is in
compliance with and not subject to liability under applicable Environmental Laws
(as defined below), (B) each of the Company and the Subsidiaries has made all
filings and provided all notices required under any applicable Environmental
Law, and has and is in compliance with all Permits required under any applicable
Environmental Laws and each of them is in full force and effect, (C) there is no
civil, criminal or administrative action, suit, demand, claim, hearing, notice
of violation, investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened against the Company or any of the Subsidiaries under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) none of the Company or the Subsidiaries has received notice
that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law and (F) no property or facility
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of the Company or any of the Subsidiaries is (i) listed or proposed for listing
on the National Priorities List under CERCLA or is (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
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For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii) underground
and above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(v) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries that is pending or, to
the knowledge of the Company or any of the Subsidiaries, threatened.
(w) Each of the Company and the Subsidiaries carries insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties.
(x) None of the Company or the Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other plan
which is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or any of the Subsidiaries makes or ever
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has made a contribution and in which any employee of the Company or of any
Subsidiary is or has ever been a participant. With respect to such plans, the
Company and each Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(y) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls that
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(z) None of the Company or the Subsidiaries will be an "investment
company" or "promoter" or "principal under-
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writer" for an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
(aa) The Notes, the Guarantees, the Indenture and the Registration
Rights Agreement will conform in all material respects to the descriptions
thereof in the Final Memorandum.
(bb) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration statements
required to be filed by the Company and the Subsidiary Guarantors pursuant to
the Registration Rights Agreement other than as expressly permitted thereby.
(cc) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value
of the assets of each of the Company and the Subsidiaries (on a consolidated
basis) will exceed the sum of its stated liabilities and identified contingent
liabilities; none of the Company or the Subsidiaries (each on a consolidated
basis) is, nor will any of the Company or the Subsidiaries (each on a
consolidated basis) be, after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, (a) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise insolvent.
(dd) None of the Company, the Subsidiaries or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any "security" (as defined in the
Act) that is or could be integrated with the sale of the Securities in a manner
that would require the registration under the Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner contemplated by this Agreement to register any of the
Securiites under the Act or to qualify the Indenture under the TIA.
(ee) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under
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the Act) as the Securities and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
(ff) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of the
price of the Securities.
(gg) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the Initial
Purchasers) has engaged in any directed selling efforts (as that term is defined
in Regulation S under the Act ("Regulation S")) with respect to the Securities;
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the Company, the Subsidiaries and their respective Affiliates and any person
acting on its or their behalf (other than the Initial Purchasers) have complied
with the offering restrictions requirement of Regulation S.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
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the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers, acting
severally and not jointly, agree to purchase the Securities in the respective
amounts set forth on Schedule 1 hereto from the Company at 97% of their
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principal amount. One or more certificates in definitive form for the Securities
that the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Company to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer (same day funds) to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on
July 21, 2000, or at such other place, time or date as the Initial Purchasers,
on the one hand, and the Company, on the other hand, may agree upon, such time
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and date of delivery against payment being herein referred to as the "Closing
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Date." The Company will make such certificate or certificates for the Securities
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available for checking and packaging by the Initial Purchasers at the offices of
Deutsche Bank Securities Inc. in New York, New York, or at such other place as
Deutsche Bank Securities Inc. may designate, at least 24 hours prior to the
Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
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propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company and the Subsidiary Guarantors. The
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Company and each of the Subsidiary Guarantors covenants and agrees with each of
the Initial Purchasers that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent. The Company will promptly, upon
the reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Securities by the Initial Purchasers.
(b) The Company and the Subsidiary Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchasers may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the Securities;
provided, however, that in connection therewith, neither the Company nor the
-------- -------
Subsidiary Guarantors shall be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or the Private Exchange Notes, any
event occurs or information becomes known 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 a material fact necessary to make
-14-
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchasers thereof and will prepare, at
the expense of the Company, an amendment or supplement to the Final Memorandum
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Securities remain outstanding, the
Company will furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Securities and, as soon as available, copies of any
reports or financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of securities
of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared, a copy of any unaudited
interim financial statements of the Company and the Subsidiaries for any period
subsequent to the period covered by the most recent financial statements
appearing in the Final Memorandum.
(h) None of the Company, the Subsidiaries or any of their Affiliates
will sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) that could be integrated with
the sale of the Securities in a manner which would require the registration
under the Act of the Securities.
(i) The Company will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
-15-
(j) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, upon request, to any holder of such
Securities and any prospective purchasers thereof the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Securities to be designated PORTAL-eligable securities in accordance with the
rules and regulations adopted by the NASD relating to trading in the NASD'S
Portal Market (the "Portal Market") and (ii) permit the Securities to be
-------------
eligible for clearance and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an off shore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Securities not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of definitive
securities.
6. Expenses. The Company and each of the Subsidiary Guarantors,
--------
jointly and severally, agree to pay all costs and expenses incident to the
performance of their respective obligations under this Agreement, whether or not
the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) preparation
(including printing), issuance and delivery to the Initial Purchasers of the
Securities, (v) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto, (vi) expenses in connection
with the "roadshow" and any other meetings with prospective investors in the
Securities, (vii) fees and expenses of the Trustee including reasonable fees and
expenses of counsel, (viii) all expenses and listing fees incurred in connection
with the application for quotation of the Securities on the PORTAL Market and
(ix) any fees charged by investment rating agencies for the rating of the
Securities. If the sale of the Securities provided for herein is not consummated
because
-16-
any condition to the obligations of the Initial Purchasers set forth in Section
7 hereof is not satisfied, because this Agreement is terminated or because of
any failure, refusal or inability on the part of the Company or any of the
Subsidiary Guarantors to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder (other than solely by reason
of a default by the Initial Purchasers of their obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), the Company
and the Subsidiary Guarantors, jointly and severally, agree to promptly
reimburse the Initial Purchasers upon demand for all out-of-pocket expenses
(including fees, disbursements and charges of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel
for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities.
7. Conditions of the Initial Purchasers' Obligations. The obligation
-------------------------------------------------
of the Initial Purchasers to purchase and pay for the Securities shall, in their
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, substantially in the
form of Exhibit B hereto.
---------
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers, dated
as of the Closing Date and addressed to the Initial Purchasers, of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchasers shall have received from the Independent
Accountants a comfort letter or letters dated the date hereof and the Closing
Date, in form and substance satisfactory to counsel for the Initial Purchasers.
(d) The representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall be true and correct on
and as of the date hereof and on and as of the Closing Date as if made on and as
of the Closing Date; the statements of the Company's and the Subsidiary
Guar-
-17-
antors' officers made pursuant to any certificate delivered in accordance with
the provisions hereof shall be true and correct in all material respects on and
as of the date made and on and as of the Closing Date; the Company and the
Subsidiary Guarantors shall have performed all covenants and agreements and
satisfied all conditions in all material respects on their part to be performed
or satisfied hereunder at or prior to the Closing Date; and, except as described
in the Final Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), subsequent to the date of the most recent financial statements
in such Final Memorandum, there shall have been no event or development, and no
information shall have become known, that, individually or in the aggregate, has
or would be reasonably likely to have a Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage or
from any legal or governmental proceeding, order or decree, which loss or
interference, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect.
(g) The Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its Chairman
of the Board, Chief Executive Officer, President or any Senior Vice President
and the Chief Financial Officer to the effect that:
(i) The representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement are true and correct on
and as of the Closing Date, and the Company and the Subsidiary Guarantors
have performed all covenants and agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect; and
-18-
(iii) To the knowledge of such officers, the sale of the Securities
hereunder has not been enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and such agreement
shall be in full force and effect at all times from and after the Closing Date.
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
The Company shall furnish to the Initial Purchasers such conformed
copies of such documents, opinions, certificates, letters, schedules and
instruments in such quantities as the Initial Purchasers shall reasonably
request.
8. Offering of Securities; Restrictions on Transfer. (a) Each of the
------------------------------------------------
Initial Purchasers agrees with the Company (as to itself only) that (i) it has
not and will not solicit offers for, or offer or sell, the Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; and (ii) it has and will solicit offers
for the Securities only from, and will offer the Securities only to (A) in the
case of offers inside the United States, persons whom the Initial Purchasers
reasonably believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("non-U.S. purchasers," which term shall include dealers
-------------------
or other professional fiduciaries in the United States acting on a discretionary
basis for non-U.S. beneficial owners (other than an estate or trust)); provided,
--------
however, that, in the case of this clause (B), in purchasing such Securities
-------
such persons are deemed to have represented and agreed as provided under the
caption "Notice to Investors" contained in the Final Memorandum (or, if the
Final Memorandum is not in existence, in the most recent Memorandum).
-19-
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or has
in its possession or distributes any Memorandum or any such other material, in
all cases at its own expense; (ii) the Securities have not been and will not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act; and
(iii) it has offered the Securities and will offer and sell the Securities (A)
as part of its distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S and, accordingly, neither it nor any
persons acting on its behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Securities, and
any such persons have complied and will comply with the offering restrictions
requirement of Regulation S.
Terms used in this Section 8 and not defined in this Agreement have
the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) The Company and each of the
--------------------------------
Subsidiary Guarantors agree, jointly and severally, to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to which any
Initial Purchaser or such controlling person may become subject under the Act,
the Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or the Subsidiary Guarantors in Section 2 hereof;
(ii) any untrue statement or alleged untrue statement
of any material fact contained in any Memorandum or any amendment or
supplement thereto; or
(iii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading,
-20-
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, the Company
-------- -------
and the Subsidiary Guarantors 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 untrue statement or alleged untrue statement or omission or alleged omission
made in any Memorandum or any amendment or supplement thereto in reliance upon
and in conformity with written information concerning the Initial Purchasers
furnished to the Company by Deutsche Bank Securities Inc. or CIBC World Markets
Corp. specifically for use therein. The indemnity provided for in this Section 9
will be in addition to any liability that the Company and the Subsidiary
Guarantors may otherwise have to the indemnified parties. The Company and the
Subsidiary Guarantors shall not be liable under this Section 9 for any
settlement of any claim or action effected without its prior written consent,
which shall not be unreasonably withheld.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and the Subsidiary Guarantors, their
directors, their officers and each person, if any, who controls the Company and
the Subsidiary Guarantors within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities to
which the Company and the Subsidiary Guarantors or any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Memorandum or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in any Memorandum or any
amendment or supplement thereto, or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Initial Purchaser, furnished to the Company by Deutsche Bank Securities Inc. or
CIBC World Markets Corp. specifically for use therein; and subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Company or the Subsidiary
Guarantors or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or ac-
-21-
tion in respect thereof. The indemnity provided for in this Section 9 will be in
addition to any liability that the Initial Purchasers may otherwise have to the
indemnified parties. The Initial Purchasers shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld. The Company and the
Subsidiary Guarantors shall not, without the prior written consent of the
Initial Purchasers, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Initial Purchaser is or could have
been a party, or indemnity could have been sought hereunder by any Initial
Purchaser, unless such settlement (A) includes an unconditional written release
of the Initial Purchasers, in form and substance reasonably satisfactory to the
Initial Purchasers, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof
in writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent 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 paragraphs (a) and (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that 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 defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of no-
-22-
▇▇▇▇ of the institution of such action, then, in each such case, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial
Purchasers in the case of paragraph (a) of this Section 9 or the Company or the
Subsidiary Guarantors in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. All fees and
expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they
are incurred. After such notice from the indemnifying party to such indemnified
party, the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without the
prior written consent of the indemnifying party (which consent shall not be
unreasonably withheld), unless such indemnified party waived in writing its
rights under this Section 9, in which case the indemnified party may effect such
a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and
-23-
the indemnified party on the other from the offering of the Securities or (ii)
if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company and
the Subsidiary Guarantors on the one hand and any Initial Purchaser on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by such Initial Purchaser. The relative fault
of the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Subsidiary Guarantors on the one hand, or such Initial Purchaser
on the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Subsidiary Guarantors and the Initial
Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Initial Purchaser
shall be obligated to make contributions hereunder that in the aggregate exceed
the total discounts, commissions and other compensation received by such Initial
Purchaser under this Agreement, less the aggregate amount of any damages that
such Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and 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 paragraph (d), each person, if any, who
controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each director of the Company or any Subsidiary
Guarantor, each officer of the Company or any Subsidiary Guarantor and each
person, if any, who controls the Company or any Subsidiary Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as the Company and the Subsidiary Guarantors.
-24-
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Company, the
Subsidiary Guarantors, their respective officers and the Initial Purchasers set
forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Subsidiary Guarantors,
any of their respective officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6, 9 and 15 hereof shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company or any of the Subsidiary Guarantors
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions in all material respects on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage
or any legal or governmental proceeding, which loss or interference, in the
sole judgment of the Initial Purchasers, has had or has a Material Adverse
Effect, or there shall have been, in the sole judgment of the Initial
Purchasers, any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a Material Adverse
Effect (including without limitation a change in control of the Company or
the Subsidiaries), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities of the Company or in securities generally
on the New York Stock Exchange, American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited or minimum
or maximum prices shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
-25-
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency or (C) any material change in the financial markets of the
United States that, in the case of (A), (B) or (C) above and in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Notes as contemplated
by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
----------------------------------------------
set forth in the third and fourth sentences of the fifth paragraph and the sixth
paragraph under the heading "Private Placement" in the Final Memorandum (to the
extent such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to the Company for the purposes
of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and, if
-------
sent to the Initial Purchasers, shall be mailed or delivered to (i) Deutsche
Bank Securities Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Finance Department; if sent to the Company, shall be mailed or
delivered to the Company at ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇ ▇▇▇▇▇▇▇ with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchasers, the Company and the Subsidiary Guarantors
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions
-26-
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company and the Subsidiary Guarantor's contained in Section 9 of this Agreement
shall also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and the Subsidiary Guarantors, their respective officers and any
person or persons who control the Company or any of the Subsidiary Guarantors
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchasers will be deemed a
successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
--------------
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-27-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
ZIFF ▇▇▇▇▇ MEDIA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
ZIFF ▇▇▇▇▇ PUBLISHING
HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
ZIFF ▇▇▇▇▇ INTERNET INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
ZIFF ▇▇▇▇▇ DEVELOPMENT INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
ZIFF ▇▇▇▇▇ PUBLISHING INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
ETESTING LABS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name:
Title: C.O.O.
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The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
By: /S/ illegible
-------------
Name:
Title:
CIBC WORLD MARKETS CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
-29-
SCHEDULE 1
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Principal
Amount of
Initial Purchaser Notes
----------------- ---------
Deutsche Bank Securities Inc. .............................. 125,000,000
CIBC World Markets Corp. ................................... 125,000,000
-----------
Total ............................................ 250,000,000
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SCHEDULE 2
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Subsidiaries of the Company
---------------------------
Jurisdiction of
Name Incorporation
---- ---------------
Ziff ▇▇▇▇▇ Publishing Holdings Inc. Delaware
Ziff ▇▇▇▇▇ Publishing Inc. Delaware
Ziff ▇▇▇▇▇ Development Inc. Delaware
Ziff ▇▇▇▇▇ Internet Inc. Delaware
eTesting Labs Inc. Delaware