EXHIBIT 4.3
________________________________________________________________________________
SECURITIES PURCHASE AGREEMENT
by and among
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
and
▇▇▇▇▇▇▇▇ CAPITAL CORP.,
THE GUARANTOR
named herein
and
THE INITIAL PURCHASERS NAMED HEREIN
_____________________________
Dated as of November 20, 1996
_______________________________________________________________________________
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions .............................................. 1
Section 1.2. Accounting Terms; Financial Statements ................... 5
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE OF
NOTES; RIGHTS OF HOLDERS OF NOTES;
OFFERING BY INITIAL PURCHASERS
Section 2.1. Issue of Notes ........................................... 5
Section 2.2. Purchase, Sale and Delivery of Notes ..................... 6
Section 2.3. Registration Rights of Holders of Notes .................. 7
Section 2.4. Offering by the Initial Purchasers ....................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
Section 3.1. Representations and Warranties of the Issuers and
the Guarantor .......................................... 7
Section 3.2. Resale of Notes .......................................... 18
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the
Initial Purchasers ..................................... 19
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Issuers and the Guarantor ............... 21
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Page
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ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes ................................ 24
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity ................................................ 25
Section 7.2. Contribution ............................................. 27
Section 7.3. Registration Rights Agreement ............................ 29
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions ................................... 29
Section 8.2. Termination .............................................. 29
Section 8.3. No Waiver; Modifications in Writing ...................... 30
Section 8.4. Information Supplied by the Initial Purchasers ........... 31
Section 8.5. Communications ........................................... 31
Section 8.6. Execution in Counterparts ................................ 31
Section 8.7. Successors ............................................... 31
Section 8.8. Governing Law ............................................ 32
Section 8.9. Severability of Provisions ............................... 32
Section 8.10. Headings ................................................. 32
SIGNATURE PAGE ......................................................... 33
SCHEDULE I
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SECURITIES PURCHASE AGREEMENT, dated as of November 20, 1996 (the
"Agreement"), among ▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C., a Delaware limited
liability company (the "Company"), ▇▇▇▇▇▇▇▇ CAPITAL CORP., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Capital" and,
together with the Company, the "Issuers"), ▇▇▇▇▇▇▇▇ HOLDINGS, L.L.C. (the
"Guarantor"), and FIRST UNION CAPITAL MARKETS CORP. ("First Union") and CIBC
WOOD GUNDY SECURITIES CORP. ("CIBC") (the "Initial Purchasers").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1. Definitions. As used in this Agreement, and unless the
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context requires a different meaning, the following terms have the meanings
indicated:
"Accredited Investor" has the meaning provided therefor in Section 3.2
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of this Agreement.
"Act" means the Securities Act of 1933, as amended, and the rules and
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regulations of the Commission thereunder.
"Affiliate" means, with respect to any Person, any other Person which
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directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Person in question. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided, however, that beneficial ownership of at least 10% of the
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voting securities of a Person shall be deemed to be control.
"Agreement" means this Agreement, as the same may be amended,
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supplemented or modified in accordance with the terms hereof and in effect.
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"Basic Documents" means, collectively, the Indenture, the Notes, the
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Guarantee, the Registration Rights Agreement and this Agreement.
"BrightView" shall mean BrightView Communications Group, Inc.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
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Friday which is not a day on which banking institutions in the City of New York
are authorized or obligated by law to close.
"Capital Stock" of any Person means any and all shares, interests or
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other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's equity, including membership interests or
units in a limited liability company, and includes, without limitation, all
series and classes of such equity.
"Closing" has the meaning provided therefor in Section 2.2 of this
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Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission or any
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similar agency then having jurisdiction to enforce the Act.
"Default" means any event, act or condition which, with notice or
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lapse of time or both, would constitute an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Event of Default" means any event defined as an Event of Default in
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the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations of the Commission thereunder.
"Exchange Notes" has the meaning provided therefor in the Registration
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Rights Agreement.
"Final Memorandum" has the meaning provided therefor in Section 2.1 of
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this Agreement.
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"Guarantee" has the meaning provided therefor in Section 2.1 of this
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Agreement.
"Guarantor" has the meaning set forth in the introductory paragraph to
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this Agreement.
"Indemnified Party" has the meaning provided therefor in Section
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7.1(c) of this Agreement.
"Indemnifying Party" has the meaning provided therefor in Section
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7.1(c) of this Agreement.
"Indenture" means the indenture dated as of November 15, 1996 among
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the Issuers, the Guarantor and United States Trust Company of New York, as
Trustee, under which the Notes will be issued.
"Initial Purchasers" has the meaning set forth in the introductory
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paragraph to this Agreement.
"Lien" means, with respect to any property or assets of any Person,
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any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligations (as defined in the
Indenture)), conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing.
"Material Adverse Effect" means, with respect to the Issuers, a
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material adverse effect on the business, condition (financial or otherwise),
results of operations or prospects of the Issuers, taken as a whole; provided
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that, with respect to the Issuers, "Material Adverse Effect" shall also mean a
material adverse effect on the ability of the Issuers to perform their
obligations under this Agreement or the Basic Documents or on the ability of the
Guarantor to perform its obligations under the Guarantee.
"Memorandum" has the meaning provided therefor in Section 2.1 of this
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Agreement.
"Notes" means the 11 1/8% Senior Subordinated Notes due 2006 of the
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Issuers.
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"Offering" has the meaning assigned thereto in the Memorandum.
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"Offering Materials" has the meaning provided therefor in Section 7.1
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of this Agreement.
"Person" means any individual, corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, joint-stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
"▇▇▇▇▇▇▇▇" means the publishing division of ▇▇▇▇▇▇▇▇ Publishing
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Company, a California corporation.
"PORTAL" means the Private Offering, Resales, and Trading through
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Automated Linkages Market.
"Preliminary Memorandum" has the meaning provided therefor in Section
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2.1 of this Agreement.
"Private Exchange Notes" shall have the meaning provided therefor in
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the Registration Rights Agreement.
"Proceeding" has the meaning provided therefor in Section 7.1(c) of
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this Agreement.
"QIB" has the meaning provided therefor in Section 3.2 of this
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Agreement.
"Registration Rights Agreement" means the registration rights
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agreement among the Issuers, the Guarantor and the Initial Purchasers relating
to the Notes.
"Senior Credit Facility" has the meaning provided therefor in the
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Indenture.
"State" means each of the states of the United States, the District of
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Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having jurisdiction
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to enforce such State's securities laws.
"Subsidiaries" means, with respect to any Person, any corporation,
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partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in
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the election of directors, officers or trustees thereof is held by such first-
named Person or any of its Subsidiaries; or (ii) in the case of a partnership,
limited liability company, joint venture, association or other business entity,
with respect to which such first-named Person or any of its Subsidiaries has the
power to direct or cause the direction of the management and policies of such
entity by contract or otherwise or if in accordance with generally accepted
accounting principles such entity is consolidated with the first-named Person
for financial statement purposes.
"Taxes" has the meaning provided therefor in Section 3.1(v) of this
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Agreement.
"Time of Purchase" has the meaning provided therefor in Section 2.2 of
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this Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
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amended, and the rules and regulations of the Commission thereunder.
Section 1.2. Accounting Terms; Financial Statements. All accounting
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terms used herein not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with sound accounting practice.
The term "sound accounting practice" shall mean such accounting practice as, in
the opinion of the independent accountants regularly retained by the Company,
conforms at the time to generally accepted accounting principles in the United
States applied on a consistent basis except for changes with which such
accountants concur. All determinations to which accounting principles apply
shall be made in accordance with sound accounting practice.
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE
OF NOTES; RIGHTS OF HOLDERS OF NOTES;
OFFERING BY INITIAL PURCHASERS
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Section 2.1. Issue of Notes. The Company has authorized the issuance
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of $100,000,000 aggregate principal amount of the Notes which are to be issued
pursuant to the Indenture. Each Note will be substantially in the form of the
Note set forth as Exhibit A to the Indenture. The Notes will be unconditionally
guaranteed by the Guarantor pursuant to the terms of the Indenture (the
"Guarantee").
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The Notes will be offered and sold to the Initial Purchasers without
being registered under the Act, in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Issuers and the
Guarantor have prepared a preliminary offering memorandum dated October 28, 1996
(the "Preliminary Memorandum") and prepared a final offering memorandum dated
November 20, 1996 (the "Final Memorandum" and, together with the Preliminary
Memorandum, the "Memorandum") setting forth or including a description of the
terms of the Notes, the terms of the offering, a description of the Issuers and
the Guarantor and any material developments relating to the Issuers and the
Guarantor occurring after the date of the most recent financial statements
included therein.
Section 2.2. Purchase, Sale and Delivery of Notes. 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 Issuers agree that
they will sell to each Initial Purchaser, and each Initial Purchaser agrees,
acting severally and not jointly, that it will purchase from the Issuers at the
Time of Purchase, the principal amount of the Notes set forth opposite the name
of such Initial Purchaser on Schedule I hereto at a price equal to 97% of the
principal amount thereof.
The purchase, sale and delivery of the Notes will take place at a
closing (the "Closing") at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M., New York time, on November , 1996, or
such later date and time, if any, as the Initial Purchasers and the Company
shall agree. The time at which such Closing is concluded is herein called the
"Time of Purchase."
One or more certificates in definitive form for the Notes 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 24 hours prior to the Closing, shall
be delivered by or on behalf of the Issuers to the Initial Purchasers, against
payment by or on behalf of the Initial Purchasers of the purchase price therefor
by wire transfer of immediately available funds wired in accordance with the
written instructions of the Company. The Issuers will make such certificate or
certificates for the Notes available for checking and packaging by the Initial
Purchasers at the offices of First Union or CIBC, or such other place as First
Union and CIBC may designate, at least 24 hours prior to the Closing.
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Section 2.3. Registration Rights of Holders of Notes. The Initial
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Purchasers and their direct and indirect transferees of the Notes will have such
rights with respect to the registration thereof under the Act and qualification
of the Indenture under the Trust Indenture Act as are set forth in the
Registration Rights Agreement.
Section 2.4. Offering by the Initial Purchasers. The Initial
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Purchasers propose to make an offering of the Notes 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
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Section 3.1. Representations and Warranties of the Issuers and the
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Guarantor. The Issuers and the Guarantor, jointly and severally, represent and
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warrant to and agree with each of the Initial Purchasers as follows:
(a) The Final Memorandum, as of its date and at the Time of Purchase,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 3.1(a) do not
apply to statements or omissions made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use in the Final
Memorandum or any amendment or supplement thereto as set forth in Section
8.4 hereof.
(b) To the best of the Company's knowledge, the financial statements
of ▇▇▇▇▇▇▇▇ together with related notes, set forth in the Final Memorandum
fairly present the financial condition of ▇▇▇▇▇▇▇▇, as of the dates
indicated and the results of operations and changes in financial position
for the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein), except that the unaudited interim
financial statements are subject to normal year-end adjustments; the
summary and selected financial data in the Final Memorandum present fairly
the financial information shown therein and
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have been prepared and compiled on a basis consistent with audited
financial statements included therein, except as otherwise stated therein;
and the pro forma financial information and the related notes thereto
included in the Final Memorandum have been prepared using reasonable
assumptions and (except with respect to note (d) to Summary Pro Forma
Financial Data and note (i) to Unaudited Pro Forma Financial Data, which
each include supplemental adjustments not required under the Act) have been
prepared in accordance with the applicable requirements of the Act and
include all adjustments necessary to present fairly the pro forma financial
information included in the Final Memorandum at the respective dates and
for the respective periods indicated. Ernst & Young LLP, which has reported
upon the audited financial statements included in the Memorandum, is an
independent public accounting firm as required by the Act and the rules and
regulations thereunder.
(c) The Company and the Guarantor are limited liability companies duly
organized, validly existing and in good standing under the laws of the
State of Delaware and have filed all reports with the Secretary of State of
Delaware required to obtain a certificate of existence from that office.
Capital is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has filed all reports
with the Secretary of State of Delaware required to obtain a certificate of
existence from that office. Each of the Company, Capital and the
Guarantor, is duly qualified and in good standing as a foreign corporation
or limited liability company, and is authorized to do business, in each
jurisdiction in which the ownership or leasing of any property or the
character of its operations makes such qualification necessary and in which
the failure so to qualify could reasonably be expected to have a Material
Adverse Effect. None of the Company, Capital or the Guarantor have any
subsidiaries other than the Company and Capital.
(d) As of the Time of Purchase (after giving effect to the Offering),
the Company will have the capitalization as set forth in the Final
Memorandum, except as otherwise noted therein. All of the issued and
outstanding Capital Stock of the Company, Capital and the Guarantor are
validly issued, fully paid and nonassessable (other than certain equity
securities issued to the Company's management that are subject to
forfeiture under certain conditions) and were not issued in violation of
any preemptive or similar rights. As
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of the date hereof, except as set forth in the Final Memorandum, (i) 99.9%
of the Capital Stock of the Company and Capital is owned directly or
indirectly by the Guarantor, free and clear of any Liens, (ii) there are no
outstanding subscriptions, options, warrants, rights, convertible
securities or other binding agreements or commitments of any character
obligating the Guarantor or the Issuers to issue any securities and (iii)
there is no agreement, understanding or arrangement among the Guarantor or
the Issuers and their respective securityholders or any other Person
relating to the ownership or disposition of any Capital Stock in the
Guarantor or the Issuers or the governance of the Guarantor's or the
Issuers' affairs, and such agreements, arrangements or understandings will
not be breached or violated as a result of the execution and delivery of,
or the consummation of the transactions contemplated by, this Agreement and
the Basic Documents.
(e) This Agreement has been duly authorized, executed and delivered by
the Issuers and the Guarantor and (assuming the due authorization,
execution and delivery by the Initial Purchasers), is a valid and legally
binding agreement of the Issuers and the Guarantor, enforceable against
each of them in accordance with its terms except (i) that the enforcement
hereof may be subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and to general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought and (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public
policy considerations.
(f) The Indenture has been duly authorized by the Issuers and the
Guarantor and, when executed and delivered by the Issuers and the Guarantor
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Issuers and
the Guarantor, enforceable against each of them in accordance with its
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.
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(g) The Registration Rights Agreement has been duly authorized by the
Issuers and the Guarantor and, when executed and delivered by the Issuers
and the Guarantor (assuming the due authorization, execution and delivery
by the Initial Purchasers), will constitute a valid and legally binding
agreement of the Issuers and the Guarantor, enforceable against each of
them in accordance with its terms except (i) that the enforcement thereof
may be subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and to general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought and (ii) as any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations.
(h) The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly authorized by the Issuers and, when executed by the Issuers
and authenticated by the Trustee in accordance with the provisions of the
Indenture and, in the case of the Notes, delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will constitute valid and
legally binding obligations of the Issuers enforceable 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.
(i) The Guarantees endorsed on the Notes and the guarantees to be
endorsed on the Exchange Notes and the Private Exchange Notes have each
been duly authorized by the Guarantor and, when the Notes are executed by
the Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Guarantees
will be entitled to the benefits of the Indenture and will constitute valid
and legally binding obligations of the Guarantor enforceable 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
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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.
(j) Immediately after the consummation of the transactions
contemplated by this Agreement (including the use of proceeds from the sale
of Notes at the Time of Purchase), the fair value and present fair saleable
value of the assets of the Company (on a consolidated basis) will exceed
the sum of its stated liabilities and identified contingent liabilities;
the Company (on a consolidated basis) will not be, after giving effect to
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby (including the use of
proceeds from the sale of Notes at the Time of Purchase), (i) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted, (ii) unable to pay its debts (contingent or
otherwise) as they mature or (iii) otherwise insolvent.
(k) Each of the Issuers and the Guarantor (to the extent a party
thereto) has all requisite limited liability company or corporate power and
authority to (i) execute, deliver and perform its obligations under this
Agreement and each of the Basic Documents, (ii) execute, deliver and
perform its obligations under all other agreements and instruments executed
and delivered by the Company pursuant to or in connection with this
Agreement, and each of the Basic Documents and (iii) issue the Notes and
the Guarantee, as the case may be, in the manner and for the purpose
contemplated by this Agreement.
(l) Subsequent to the date as of which information is given in the
Final Memorandum there has not been (i) any event or condition that has had
or that could reasonably be expected to have a Material Adverse Effect,
(ii) any transaction entered into by the Issuers or the Guarantor, other
than in the ordinary course of business, that is material to the Issuers or
the Guarantor, or (iii) any dividend or distribution of any kind declared,
paid or made by the Guarantor or the Company on its common equity.
(m) Except as set forth in the Final Memorandum, there is no action,
suit, investigation or proceeding, governmental or otherwise, pending or,
to the best knowledge of the Company, threatened to which the Issuers or
the Guarantor is or would be a party or of which the properties or assets
of the Issuers or the Guarantor are or may be
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subject that (i) seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance and sale of the Notes by the Issuers or
the making of the Guarantee by the Guarantor or any of the other
transactions contemplated hereby, (ii) questions the legality or validity
of any such transactions or seeks to recover damages or obtain other relief
in connection with any such transactions or (iii) could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(n) The execution, delivery and performance by the Issuers and the
Guarantor (to the extent a party thereto) of this Agreement and the Basic
Documents, and the issuance and sale by the Issuers of the Notes, the
making of the Guarantees by the Guarantor, and the execution, delivery and
performance by the Issuers and the Guarantor (to the extent a party
thereto) of all other agreements and instruments to be executed and
delivered by the Issuers and the Guarantor, pursuant hereto or thereto or
in connection herewith or therewith, and compliance by the Issuers and the
Guarantor (to the extent a party thereto) with the terms and provisions
hereof and thereof, do not and will not (i) violate any provision of any
law, rule or regulation (including, without limitation, Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System), order, writ,
judgment, decree, determination or award presently in effect or in effect
at the Time of Purchase having applicability to the Issuers or the
Guarantor or (ii) conflict with or result in a breach of or constitute a
default under the organizational documents of the Issuers or the Guarantor
or, as of the Time of Purchase, any indenture or loan or credit agreement,
or any other material agreement or instrument, to which the Issuers or the
Guarantor, is a party or by which the Issuers or the Guarantor, or any of
their respective properties or assets may be bound or affected, or (iii)
except as contemplated by this Agreement and the Basic Documents, result
in, or require the creation or imposition of, any Lien upon or with respect
to any of the properties now owned or hereafter acquired by the Issuers or,
the Guarantor, except, in each case, where such violation, conflict,
default or creation or imposition of any Lien would not (individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect.
(o) Each agreement or instrument executed and delivered by the
Issuers or the Guarantor (to the extent a party thereto) in connection with
this Agreement and the Basic Documents has been duly and validly
authorized,
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executed and delivered by the Issuers and the Guarantor (to the extent a
party thereto) and constitutes or will constitute a valid and legally
binding obligation of the Issuers and the Guarantor (to the extent a party
thereto), enforceable against them in accordance with its terms, except (i)
that the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and to
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (ii) as any rights to indemnity
and contribution hereunder and thereunder may be limited by applicable law.
(p) Neither the Issuers nor the Guarantor is currently or, after
giving effect to the consummation of the transactions contemplated by this
Agreement and the Basic Documents, will be (i) in violation of its
respective organizational documents, (ii) in default (nor will an event
occur which with notice or passage of time or both would constitute such a
default) under or in violation of any indenture or loan or credit agreement
or any other material agreement or instrument to which it is a party or by
which it or any of its properties or assets may be bound or affected
(except as set forth in the Final Memorandum), (iii) in violation of any
order of any court, arbitrator or governmental body or (iv) in violation of
or will have violated any statute, rule or regulation of any governmental
authority, which default or violation (individually or in the aggregate)
could reasonably be expected to (x) affect the legality, validity or
enforceability of this Agreement or any of the Basic Documents or (y) have
a Material Adverse Effect.
(q) Except as set forth in the Final Memorandum, no authorization,
consent, approval, license, qualification or formal exemption from, nor any
filing, declaration or registration with, any court, governmental agency or
regulatory authority or any securities exchange is required in connection
with the execution, delivery or performance by the Issuers or the Guarantor
of this Agreement, or any of the Basic Documents, except (i) as may be
required under state securities or "blue sky" laws or the laws of any
foreign jurisdiction in connection with the offer and sale of the Notes or
(ii) as would not (individually or in the aggregate) have a Material
Adverse Effect. All such authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and
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registrations set forth in the Final Memorandum (other than as disclosed
therein) which are required to have been obtained by the date hereof have
been obtained or made, as the case may be, and are in full force and effect
and not the subject of any pending or, to the knowledge of the Company,
threatened attack by appeal or direct proceeding or otherwise.
(r) The Issuers are not and immediately after the Time of Purchase
will not be "investment companies" or, to the Company's knowledge,
companies "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(s) The execution and delivery of this Agreement and the other Basic
Documents and the sale of the Notes to the Initial Purchasers will not
involve any non-exempt prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code on the part of the Issuers or any
of their Subsidiaries. No Reportable Event (as defined in Section 4043 of
ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Employee
Benefit Plan (as defined below), and the Issuers and each of their
Subsidiaries have complied in all material respects with the applicable
provisions of ERISA and the Code in connection with the Employee Benefit
Plans. The present value of all accrued benefits under each Employee
Benefit Plan subject to Title IV of ERISA (based on the current liability,
interest rate and other assumptions used in preparation of the plan's Form
5500 Annual Report) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the
value of the assets of such plan allocable to such accrued benefits.
Neither the Issuers, any of their Subsidiaries, nor any Commonly Controlled
Entity (as defined below) has had a complete or partial withdrawal from any
Multiemployer Plan (as defined in Section 4001(a)(3) of ERISA), and neither
the Issuers, any of their Subsidiaries, nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Issuers, any of
their Subsidiaries, or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which such representation is made or deemed
made. No such Multiemployer Plan is in reorganization or insolvent. There
are no material liabilities of the Issuers, any of their Subsidiaries, or
any Commonly Controlled Entity for post-
-15-
retirement benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as described in Section 3(1)
of ERISA). "Commonly Controlled Entity" shall mean any person or entity
that, together with any Issuer or any Subsidiary of an Issuer, is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code.
"Employee Benefit Plan" shall mean an employee benefit plan, as defined in
Section 3(3) of ERISA, which is maintained or contributed to by an Issuer,
any of their Subsidiaries or any Commonly Controlled Entity or to which an
Issuer, any of their Subsidiaries or any Commonly Controlled Entity may
have liability.
(t) The Company has good and valid title to, or valid and enforceable
leasehold interests (other than with respect to the lease relating to the
Company's New York office) in, all properties and assets identified in the
Final Memorandum as owned or leased, respectively, by it which are material
to the business of the Company, free and clear of all Liens, except (i)
such Liens as are described in the Final Memorandum or (ii) Liens created
in the ordinary course of business which are Permitted Liens (as defined in
the Indenture). All of the leases material to the business of the Company
and under which the Company holds properties described in the Final
Memorandum, are valid and binding as leased by them, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such properties by the Company.
(u) No form of general solicitation or general advertising was used
by the Issuers or the Guarantor or their representatives in connection with
the offer and sale of the Notes. Neither the Issuers or the Guarantor nor
any Person authorized to act for any of them has, either directly or
indirectly, sold or offered for sale any of the Notes or any other similar
security of the Issuers to, or solicited any offers to buy any thereof
from, or has otherwise approached or negotiated in respect thereof with,
any Person or Persons other than with or through the Initial Purchasers;
and the Issuers and the Guarantor agree that neither they nor any Person
acting on their behalf will sell or offer for sale any Notes to, or solicit
any offers to buy any Notes from, or otherwise approach or negotiate in
respect thereof with, any Person or Persons so as thereby to bring the
issuance or sale of any of the Notes within the provisions of Section 5 of
the Act.
-16-
(v) All tax returns required to be filed by the Issuers in any
jurisdiction (including foreign jurisdictions) have been so filed and all
taxes, assessments, fees and other charges including, without limitation,
withholding taxes, penalties, and interest ("Taxes") due or claimed to be
due have been paid, other than those Taxes being contested in good faith
and those Taxes for which adequate reserves or accruals have been
established in accordance with generally accepted accounting principles,
except where the failure to file such returns or to pay such Taxes is not
reasonably likely to have, singly or in the aggregate, a Material Adverse
Effect. The Company knows of no actual or proposed additional tax
assessments for any fiscal period against the Issuers that, individually or
in the aggregate, is reasonably likely to have a Material Adverse Effect.
(w) The Company is the sole and exclusive owner or licensee of all
trade names, unregistered trademarks and service marks, brand names,
patents, registered and unregistered copyrights, registered trademarks and
service marks, and all applications for any of the foregoing, and all
permits, grants and licenses or other rights with respect thereto, the
absence of which would have or could reasonably be expected to have a
Material Adverse Effect. Except as set forth in the Final Memorandum,
neither of the Issuers has been charged with any material infringement of
any intangible property of the character described above or been notified
or advised of any material claim of any other Person relating to any of the
intangible property which infringements or claims (individually or in the
aggregate) would have a Material Adverse Effect.
(x) Except as set forth in the Final Memorandum, the Issuers comply
with all, and have no liability under any, laws, rules and regulations
(including, without limitation, all applicable environmental laws, rules
and regulations) applicable to the Issuers, and the Issuers own or possess
and are operating in compliance in all material respects with the terms,
provisions, conditions, restrictions and limitations contained in all
licenses, franchises, approvals, certificates and permits (including,
without limitation, environmental permits) from all Federal, state,
territorial, foreign and local governmental and regulatory authorities
which are necessary to own or lease their respective properties and assets
and to the conduct of their respective businesses (other than compliance
with or liability under such laws, rules, regulations, licenses,
-17-
franchises, approvals, certificates or permits that are immaterial in scope
or application to the Issuers). There are no citations or notices of
forfeiture or other proceedings pending or, to the best knowledge of the
Company, threatened or any basis therefor which would lead to the
revocation, termination, suspension or non-renewal of any such license,
franchise, approval, certificate or permit except where all such
revocations, terminations, suspensions or non-renewals, individually or in
the aggregate, would not have a Material Adverse Effect. Other than as
disclosed in the Final Memorandum, (i) there are no license renewal or rate
or tariff proceedings existing, pending or, to the best knowledge of the
Company, threatened against the Issuers or the Guarantor that would have a
Material Adverse Effect, and (ii) there are no restrictions or limitations
contained in any applicable license, franchise, approval, certificate or
permit, or, to the best knowledge of the Company, threatened or proposed in
any pending or contemplated hearing, proceeding or procedure, that would
have a Material Adverse Effect.
(y) The Notes, the Guarantees, the Indenture, and the Registration
Rights Agreement conform in all material respects to the description
thereof in the Final Memorandum.
(z) Assuming the accuracy of the Initial Purchasers' representation
and warranties set forth in Section 3.2 hereof, and the due performance by
the Initial Purchasers of the covenants and agreements set forth in Section
3.2 hereof, the offer and sale of the Notes to the Initial Purchasers in
the manner contemplated by this Agreement and the Memorandum does not
require registration under the Act and the Indenture does not require
qualification under the Trust Indenture Act of 1939, as amended.
(aa) Except as set forth in the Final Memorandum, there is no strike,
labor dispute, slowdown or work stoppage with the employees of the company
which is pending or, to the best knowledge of the Company, threatened.
(bb) Each of the Company and its Subsidiaries carries insurance
(including self insurance) in such amounts and covering such risks as in
its reasonable determination is adequate for the conduct of its business
and the value of its properties.
-18-
(cc) No securities of the Issuers are of the same class (within the
meaning of Rule 144A under the Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated interdealer quotation system.
(dd) Neither of the Issuers nor the Company 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 Notes.
(ee) None of the Issuers, the Guarantors, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchaser) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("Regulation S") with respect
to the Notes and the Company, the Guarantor and their respective Affiliates
and any person acting on its or their behalf (other than the Initial
Purchaser) have acted in accordance with the offering restrictions
requirements of Regulation S.
(ff) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate or represents the Company's good faith
estimates that are made on the basis of data derived from such sources.
(gg) Except as stated in the Final Memorandum, the Company does not
know of any claims for services, either in the nature of a finder's fee or
financial advisory fee, with respect to the offering of the Notes and the
transactions contemplated by the Final Memorandum.
Section 3.2. Resale of Notes. Each of the Initial Purchasers
---------------
represents and warrants (as to itself only) that it is a "qualified
institutional buyer" as defined in Rule 144A of the Act ("QIB"). Each of the
Initial Purchasers agrees with the Issuers (as to itself only) that (a) it has
not and will not solicit offers for, or offer or sell, the Notes 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 (b) it has and will solicit offers
for the Notes only from, and will offer the Notes only to (A) in the case of
offers inside the United States, (i) Persons whom the Initial Purchasers
reasonably believe to be QIBs or, if any such Person is buying
-19-
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 or (ii) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be "Accredited
Investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of the Act) that,
prior to their purchase of the Notes, deliver to the Initial Purchasers a letter
containing the representations and agreements set forth in Annex A to the Final
Memorandum and (B) in the case of offers outside the United States, to Persons
other than U.S. Persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)); provided,
--------
however, that, in the case of this clause (B), in purchasing such Notes such
-------
Persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Memorandum.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
Section 4.1. Conditions Precedent to Obligations of the Initial
--------------------------------------------------
Purchasers. The obligation of each Initial Purchaser to purchase the Notes to
----------
be purchased by it hereunder is subject, at the Time of Purchase, to the
satisfaction of the following conditions:
(a) At the Time of Purchase, the Initial Purchasers shall have
received the opinion, dated as of the Time of Purchase and addressed to the
Initial Purchasers, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Issuers and the
Guarantor, in form and substance satisfactory to counsel for the Initial
Purchasers, to the effect as set forth on Exhibit A hereto.
---------
(b) The Initial Purchasers shall have received an opinion, addressed
to the Initial Purchasers in form and substance satisfactory to the Initial
Purchasers and dated the Time of Purchase, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel to the Initial Purchasers.
(c) The Initial Purchasers shall have received from Ernst & Young LLP
a comfort letter or letters dated the date
-20-
hereof and the Closing in form and substance reasonably satisfactory to
counsel to the Initial Purchasers.
(d) The representations and warranties made by the Issuers and the
Guarantor herein shall be true and correct in all material respects (except
for changes expressly provided for in this Agreement) on and as of the Time
of Purchase with the same effect as though such representations and
warranties had been made on and as of the Time of Purchase, the Issuers and
the Guarantor shall have complied in all material respects with all
agreements as set forth in or contemplated hereunder and in the Basic
Documents required to be performed by it at or prior to the Time of
Purchase and the Company shall have furnished to each Purchaser a
certificate, dated the Time of Purchase, to such effect.
(e) Subsequent to the date of the Final Memorandum, (i) there shall
not have been any change, or any development involving a prospective
change, which has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the Issuers shall have conducted their respective
businesses only in the ordinary course.
(f) At the Time of Purchase and after giving effect to the
consummation of the transactions contemplated by this Agreement and the
Basic Documents, there shall exist no Default or Event of Default.
(g) The purchase of and payment for the Notes by the Initial
Purchasers hereunder shall not be prohibited or enjoined (temporarily or
permanently) by any applicable law or governmental regulation (including,
without limitation, Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System).
(h) At the Time of Purchase, the Initial Purchasers shall have
received a certificate, dated the Time of Purchase, from the Issuers and
the Guarantor stating that the conditions specified in Sections 4.1(d),
(e), (f) and (g) have been satisfied or duly waived at the Time of
Purchase.
(i) Each of the Basic Documents shall be satisfactory in form and
substance to each of the Initial Purchasers and shall have been executed
and delivered by all the respective parties thereto and shall be in full
force and effect.
-21-
(j) All proceedings taken in connection with the issuance of the
Notes and the transactions contemplated by this Agreement, the Basic
Documents and all documents and papers relating thereto shall be reasonably
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers. The Initial Purchasers and counsel to the Initial Purchasers
shall have received copies of such papers and documents as they may
reasonably request in connection therewith, all in form and substance
reasonably satisfactory to them.
On or before the Closing, the Initial Purchasers and counsel to the
Initial Purchasers shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the business,
corporate, legal and financial affairs of the Issuers as they may reasonably
request.
ARTICLE V
COVENANTS
---------
Section 5.1. Covenants of the Issuers and the Guarantor. The Issuers
------------------------------------------
and the Guarantor covenant and agree with each of the Initial Purchasers that:
(a) The Issuers 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, which
consent shall not be unreasonably withheld. The Issuers will promptly, upon
the reasonable request of the Initial Purchasers or counsel to 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 Notes by the Initial Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes 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 reasonably necessary to complete the resale of the
Notes; provided, however, that in connection therewith, the Issuers shall
not be required to qualify as a foreign corporation or to execute a general
consent to
-22-
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 Notes 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 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 Issuers will promptly notify the Initial Purchasers
thereof (who thereafter will not use such Final Memorandum until
appropriately amended or supplemented) and will prepare, at the expense of
the Issuers, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Issuers will, without charge, provide to the Initial
Purchasers and to counsel to 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 Issuers will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For and during the period ending on the date no Notes are
outstanding, the Issuers will furnish to the Initial Purchasers copies of
all reports and other communications (financial or otherwise) furnished by
the Issuers to the Trustee or the holders of the Notes and, promptly after
available, copies of any reports or financial statements furnished to or
filed by the Issuers with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.
(g) Prior to the Time of Purchase, 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 for any period
subsequent to the period covered by the most recent financial statements
appearing in the Final Memorandum.
-23-
(h) None of the Issuers or any of its Affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale
of the Notes in a manner which would require the registration under the Act
of the Notes.
(i) The Issuers will not solicit any offer to buy or offer to sell the
Notes by means of 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.
(j) For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act
and not salable in full under Rule 144 under the Act (or any successor
provision), the Issuers will make available, upon request, to any seller of
such Notes the information specified in Rule 144A(d)(4) under the Act,
unless the Issuers are then subject to Section 13 or 15(d) of the Exchange
Act.
(k) The Issuers will use their best efforts to (i) permit the Notes to
be included for quotation on PORTAL and (ii) permit the Notes to be
eligible for clearance and settlement through The Depository Trust Company.
(l) The Issuers and the Guarantor (to the extent a party thereto) will
do and perform all things required to be done and performed by them under
this Agreement and the Basic Documents prior to or after the Closing and to
satisfy all conditions precedent on their part to the obligations of the
Initial Purchasers to purchase and accept delivery of the Notes.
(m) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S) the Issuers will not register any
transfer of such Notes 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 Notes in the form of definitive
securities.
-24-
ARTICLE VI
FEES
----
Section 6.1. Costs, Expenses and Taxes. The Issuers and the
-------------------------
Guarantor, jointly and severally, agree to pay all costs and expenses incident
to the performance of their obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 8.2 hereof, including, but not limited to, all costs and
expenses incident to (i) the printing, word processing and reproduction of this
Agreement, each of the Basic Documents, any amendment or supplement to or
modification of any of the foregoing and any and all other documents furnished
pursuant hereto or thereto or in connection herewith or therewith, (ii) any
costs of printing the Preliminary Memorandum and the Final Memorandum and any
amendment or supplement thereto, any other marketing related materials, (iii)
all arrangements relating to the delivery to the Initial Purchasers of copies of
the foregoing documents, (iv) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (v)
preparation (including printing), issuance and delivery to the Initial
Purchasers of the Notes, (vi) the qualification of the Notes under state
securities and "Blue Sky" laws, including filing fees, word processing and
reproduction costs of any "Blue Sky" memoranda and fees and disbursements of
counsel to the Initial Purchasers relating thereto not to exceed $15,000, (vii)
expenses of Company personnel and the cost of any privately chartered air travel
in connection with any meetings with prospective investors in the Notes, (viii)
fees and expenses of the trustee, including fees and expenses of counsel to the
Trustee, (ix) all expenses and listing fees incurred in connection with the
application for quotation of the Notes on PORTAL, (x) any fees charged by
investment rating agencies for the rating of the Notes, and (xi) except as
limited by Article VII, all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses), if any, in connection with the
enforcement of this Agreement, the Notes or any other agreement furnished
pursuant hereto or thereto or in connection herewith or therewith. In addition,
the Issuers shall pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the execution and
delivery of this Agreement, any Basic Document or the issuance of the Notes, and
shall save and hold each Initial Purchaser harmless from and against any and all
liabilities with respect to or resulting from any delay in paying, or omission
to pay, such taxes.
-25-
ARTICLE VII
INDEMNITY
---------
Section 7.1. Indemnity.
---------
(a) Indemnification by the Issuers and the Guarantor. The Issuers and
------------------------------------------------
the Guarantor, jointly and severally, agree and covenant to hold harmless and
indemnify each of the Initial Purchasers and any Affiliates thereof (including
any director, officer, employee, agent or controlling Person of any of the
foregoing) from and against any losses, claims, damages, liabilities and
expenses (including expenses of investigation) to which such Initial Purchaser
and its Affiliates may become subject arising out of or based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Memorandum and any amendments or supplements thereto, the Basic Documents, any
documents filed with the Commission or any State Commission (collectively, the
"Offering Materials") or arising out of or based upon the omission or alleged
omission to state in any of the Offering Materials a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Issuers and the Guarantor shall not be liable under
-------- -------
this paragraph (a) to the extent that such losses, claims, damages or
liabilities arose out of or are based upon an untrue statement or omission made
in any of the documents referred to in this paragraph (a) in reliance upon and
in conformity with the information relating to the Initial Purchasers furnished
in writing by such Initial Purchasers for inclusion therein; provided, further,
-------- -------
that the Issuers and the Guarantor shall not be liable under this paragraph (a)
to the extent that such losses, claims, damages or liabilities arose out of or
are based upon an untrue statement or omission made in any Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement thereto) if
the person asserting such loss, claim, damage or liability purchased Notes from
an Initial Purchaser in reliance on such Memorandum but was not given the Final
Memorandum (or any amendment or supplement thereto) on or prior to the
confirmation of the sale of such Notes. The Issuers and the Guarantor, on a
joint and several basis, further agree to reimburse each Initial Purchaser for
any reasonable legal and other expenses as they are incurred by it in connection
with investigating, preparing to defend or defending any lawsuits, claims or
other proceedings or investigations arising in any manner out of or in
connection with such Person being an Initial Purchaser; provided that if the
--------
Issuers or the Guarantor reimburses an Initial Purchaser hereunder for any
expenses incurred in connection with a lawsuit, claim or other proceeding
-26-
for which indemnification is sought, such Initial Purchaser hereby agrees to
refund such reimbursement of expenses to the extent that the losses, claims,
damages or liabilities are not entitled to indemnification hereunder. The
Issuers and the Guarantor further agree that the indemnification, contribution
and reimbursement commitments set forth in this Article VII shall apply whether
or not an Initial Purchaser is a formal party to any such lawsuits, claims or
other proceedings. The indemnity, contribution and expense reimbursement
obligations of the Issuers and the Guarantor under this Article VII shall be in
addition to any liability the Issuers and the Guarantor may otherwise have.
(b) Indemnification by the Initial Purchasers. Each of the Initial
-----------------------------------------
Purchasers agrees and covenants, severally and not jointly, to hold harmless and
indemnify the Issuers and the Guarantor and any Affiliates thereof (including
any director, officer, employee, agent or controlling Person of any of the
foregoing) from and against any losses, claims, damages, liabilities and
expenses insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement of any material fact contained in
the Offering Materials, or upon the omission to state therein a material fact
required to be stated therein 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 omission was made in reliance upon and in conformity with the
information relating to such Initial Purchaser furnished in writing by such
Initial Purchaser for inclusion therein. The indemnity, contribution and
expense reimbursement obligations of the Initial Purchasers under this Article
VII shall be in addition to any liability the Initial Purchasers may otherwise
have.
(c) Procedure. If any Person shall be entitled to indemnity hereunder
---------
(each an "Indemnified Party"), such Indemnified Party shall give prompt written
notice to the party or parties from which such indemnity is sought (each an
"Indemnifying Party") of the commencement of any action, suit, investigation or
proceeding, governmental or otherwise (a "Proceeding"), with respect to which
such Indemnified Party seeks indemnification or contribution pursuant hereto;
provided, however, that the failure so to notify the Indemnifying Parties shall
-------- -------
not relieve the Indemnifying Parties from any obligation or liability except to
the extent that the Indemnifying Parties have been prejudiced materially by such
failure. The Indemnifying Parties shall have the right, exercisable by giving
written notice to an Indemnified Party promptly after the receipt of written
notice from such Indemnified Party of such Proceeding, to assume, at the
Indemnifying Parties' expense, the defense of any
-27-
such Proceeding, with counsel reasonably satisfactory to such Indemnified Party;
provided, however, that an Indemnified Party or parties (if more than one such
-------- -------
Indemnified Party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or parties unless: (1) the Indemnifying Parties agree to
pay such fees and expenses; or (2) the Indemnifying Parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party or parties and the Indemnifying Party or an Affiliate of the
Indemnifying Party and such Indemnified Parties, and the Indemnified Parties
shall have been advised in writing by counsel that there may be one or more
legal defenses available to such Indemnified Party or parties that are different
from or additional to those available to the Indemnifying Parties, in which
case, if such Indemnified Party or parties notifies the Indemnifying Parties in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Parties, the Indemnifying Parties shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Parties, it being understood, however, that, unless there exists a
conflict among Indemnified Parties, the Indemnifying Parties shall not, in
connection with any one such Proceeding or separate but substantially similar or
related Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such Indemnified Party or Parties, or for fees and expenses that are
not reasonable. No Indemnified Party or Parties will settle any Proceeding
without the consent of the Indemnifying Party or Parties (but such consent shall
not be unreasonably withheld). No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened Proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability or claims that are the subject of such
Proceeding.
Section 7.2. Contribution. If for any reason the indemnification
------------
provided for in Section 7.1 of this Agreement is unavailable to an Indemnified
Party, or insufficient to hold it harmless, in respect of any losses, claims,
damages, liabilities
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or expenses referred to therein, then each applicable Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other, but also the relative fault of the Indemnifying
and Indemnified Parties in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Indemnifying and Indemnified Parties shall be deemed to be in the same
proportion as the total proceeds from the offering of the Notes (before
deducting expenses) received by the Issuers bear to the total discounts and
commissions received by each Initial Purchaser. The relative fault of the
Indemnifying and Indemnified 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 Indemnifying or Indemnified Parties and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses incurred by such party in
connection with investigating or defending any such claim.
The Issuers and the Guarantor and each of the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to the
immediately preceding paragraph were determined pro rata or per capita or by any
other method of allocation which does not take into account the equitable
considerations referred to in such paragraph. Notwithstanding any other
provision of this Section 7.2, 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. 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.
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Section 7.3. Registration Rights Agreement. Notwithstanding anything
-----------------------------
to the contrary in this Article 7, the indemnification and contribution
provisions of the Registration Rights Agreement shall govern any claim with
respect thereto.
ARTICLE VIII
MISCELLANEOUS
-------------
Section 8.1. Survival of Provisions. The representations, warranties
----------------------
and covenants of the Issuers, the Guarantor, their respective officers and the
Initial Purchasers made herein, the indemnity and contribution agreements
contained herein and each of the provisions of Articles VI, VII and VIII shall
remain operative and in full force and effect regardless of (a) any
investigation made by or on behalf of the Issuers, the Guarantor, any Initial
Purchaser or any Indemnified Party, (b) acceptance of any of the Notes and
payment therefor, (c) any termination of this Agreement, or (d) disposition of
the Notes by the Initial Purchasers whether by redemption, exchange, sale or
otherwise.
Section 8.2. Termination. (a) This Agreement may be terminated in
-----------
the sole discretion of the Initial Purchasers by notice to the Company given
prior to the Time of Purchase in the event that the Issuers shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Closing:
(i) the Issuers or the Guarantor shall have sustained any loss or
interference with respect to their 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 of Control (as defined in the
Indenture) of the Issuers or the Guarantor), except in each case as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto);
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(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 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;
(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 which, 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 8.2 shall
be without liability of any party to any other party except as provided in
Section 8.1 hereof.
Section 8.3. No Waiver; Modifications in Writing. No failure or delay
-----------------------------------
on the part of the Issuers, the Guarantors or any Initial Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Issuers or
the Guarantor or any Initial Purchaser at law or in equity or otherwise. No
waiver of or consent to any departure by the Issuers or the Guarantor from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof, provided that notice of any such waiver
--------
shall be given to each party hereto as set forth below. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
each of the Issuers, the Guarantor and each Initial
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Purchaser. Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Issuers or the Guarantor from the terms of any provision
of this Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Issuers or the
Guarantor in any case shall entitle the Issuers or the Guarantor to any other or
further notice or demand in similar or other circumstances.
Section 8.4. Information Supplied by the Initial Purchasers. The
----------------------------------------------
statements set forth in the first paragraph on page (i), the fourth and the
fifth sentences of the third paragraph and in the sixth paragraph under the
heading "Plan of Distribution" 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
3.1(a) and 7.1(a) and (b) hereof.
Section 8.5. Communications. All notices, demands and other
--------------
communications provided for hereunder shall be in writing, and, (a) if to the
Initial Purchasers, shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service or personal
delivery, addressed to First Union Capital Markets Corp., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and CIBC Wood Gundy Securities Corp., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇, Esq. and (b) if to the Issuers or the Guarantor, shall be given by
similar means to ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attn:
Chief Financial Officer and General Counsel, with copies to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq. In
each case notices, demands and other communications shall be deemed given when
received.
Section 8.6. Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 8.7. Successors. This Agreement shall inure to the benefit of
----------
and be binding upon the Initial Purchasers, the Issuers, the Guarantor and their
respective successors and legal representatives, and nothing expressed or
mentioned in this
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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 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 Issuers and the Guarantor contained in Section 7.1(a) of
this Agreement shall also be for the benefit of the directors, officers,
employees and agents of the Initial Purchasers and 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 7.1(b) of this Agreement shall also be for the
benefit of the directors of the Issuers and the Guarantor, their officers and
any Person or Persons who control the Issuers or the Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser
of Notes from the Initial Purchasers will be deemed a successor because of such
purchase.
Section 8.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 8.9. Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Headings. The Article and Section headings and Table of
--------
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
▇▇▇▇▇▇▇▇ PUBLISHING COMPANY, L.L.C.
(a Delaware limited liability company)
By: ____________________________________
Name:
Title:
▇▇▇▇▇▇▇▇ CAPITAL CORP.
(a Delaware corporation)
By: ____________________________________
Name:
Title:
▇▇▇▇▇▇▇▇ HOLDINGS, L.L.C.
(a Delaware limited liability company)
as Guarantor
By: ___________________________________
Name:
Title:
FIRST UNION CAPITAL MARKETS CORP.
By: ___________________________________
Name:
Title:
CIBC WOOD GUNDY SECURITIES CORP.
By: ___________________________________
Name:
Title:
SCHEDULE I
Principal Amount
Initial Purchaser of Notes
----------------- ----------------
First Union Capital Markets Corp. $ 55,000,000
CIBC Wood Gundy Securities Corp. 45,000,000
------------
Total $100,000,000
------------