EXHIBIT 4.2
Block Communications, Inc.
and
Access Toledo, Ltd.
Buckeye Cablevision, Inc.
Buckeye Telesystem, Inc.
CARS Holding, Inc.
Community Communications Services, Inc.
Corporate Protection Services, Inc.
Erie County Cablevision, Inc.
Idaho Independent Television, Inc.
Independence Television Company
Lima Communications Corporation
Metro Fiber & Cable Construction Company
Monroe Cablevision, Inc.
PG Publishing Company
Toledo Area Telecommunications Services, Inc.
WLFI-TV, Inc.
as Guarantors
$175,000,000
9.25% Senior Subordinated Notes due 2009
Purchase Agreement
dated April 11, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Fleet Securities, Inc.
Comerica Securities, Inc.
NatCity Investments, Inc.
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corp.
Table of Contents
SECTION 1. Representations and Warranties................................ 2
SECTION 2. Purchase, Sale and Delivery of the Securities................. 15
SECTION 3. Additional Covenants.......................................... 16
SECTION 4. Payment of Expenses........................................... 19
SECTION 5. Conditions of the Obligations of the Initial Purchasers....... 19
SECTION 6. Reimbursement of Initial Purchasers' Expenses................. 22
SECTION 7. Offer, Sale and Resale Procedures............................. 22
SECTION 8. Indemnification............................................... 23
SECTION 9. Contribution.................................................. 26
SECTION 10. Termination of this Agreement................................. 27
SECTION 11. Representations and Indemnities to Survive Delivery........... 28
SECTION 12. Notices....................................................... 28
SECTION 13. Successors.................................................... 29
SECTION 14. Partial Unenforceability...................................... 29
SECTION 15. Governing Law Provisions...................................... 29
SECTION 16. Default of One or More of the Several Initial Purchasers...... 30
SECTION 17. General Provisions............................................ 30
Purchase Agreement
April 11, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
As Representative of the Initial Purchasers
named in Schedule A hereto
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. Block Communications, Inc., an Ohio corporation (the
"Company"), proposes to issue and sell to the several Initial Purchasers named
in Schedule A (the "Initial Purchasers"), acting severally and not jointly, the
respective amounts set forth in such Schedule A of a $175,000,000 aggregate
principal amount of the Company's 9.25% Senior Subordinated Notes due 2009 (the
"Notes"). Banc of America Securities LLC has agreed to act as the representative
of the several Initial Purchasers in connection with the offering and sale of
the Notes.
The Notes will be issued pursuant to an indenture, dated as of April
18, 2002 (the "Indenture"), among the Company, the Guarantors (as defined below)
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). Notes issued in book-entry form will be issued in the name of Cede &
Co., as nominee of The Depository Trust Company (the "Depositary").
The holders of the Notes will be entitled to the benefits of a
registration rights agreement, to be dated as of April 18, 2002 (the
"Registration Rights Agreement"), among the Company, the Guarantors and the
Initial Purchasers, pursuant to which the Company will agree to file, within 90
days of the Closing Date, a registration statement with the Commission (as
defined below) registering the Exchange Securities (as defined below) under the
Securities Act (as defined below).
The payment of principal of, premium and Additional Interest (as
defined in the Indenture), if any, and interest on the Notes and the Exchange
Notes (as defined below) will be fully and unconditionally guaranteed on a
senior subordinated basis, jointly and severally, by (i) Access Toledo, Ltd.,
Buckeye Cablevision, Inc., Buckeye Telesystem, Inc., CARS Holding, Inc.,
Community Communications Services, Inc., Corporate Protection Services, Inc.,
Erie County Cablevision, Inc., Idaho Independent Television, Inc., Independence
Television Company, Lima Communications Corporation, Metro Fiber & Cable
Construction Company, Monroe Cablevision, Inc., PG Publishing Company, Toledo
Area Telecommunications Services, Inc. and WLFI-TV, Inc. and (ii) any subsidiary
of the Company formed or acquired after the Closing Date that executes an
additional guarantee in accordance with the terms of the Indenture, and their
respective successors and assigns (collectively, the "Guarantors"), pursuant to
their guarantees (the "Guarantees"). The Notes and the Guarantees, a notation of
which is attached thereto, are herein collectively referred to as the
"Securities;" and the Exchange Notes and the Exchange Guarantees
(as defined below) attached thereto are herein collectively referred to as the
"Exchange Securities."
The Company understands that the Initial Purchasers propose to make
an offering of the Securities on the terms and in the manner set forth herein
and in the Offering Memorandum (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the "Subsequent Purchasers") at any
time after the date of this Agreement. The Securities are to be offered and sold
to or through the Initial Purchasers without being registered with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933 (as amended, the "Securities Act," which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder), in reliance
upon exemptions therefrom. The terms of the Securities and the Indenture will
require that investors that acquire Securities expressly agree that Securities
may only be resold or otherwise transferred, after the date hereof, if such
Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including
the exemptions afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation
S") thereunder).
The Company has prepared and delivered to each Initial Purchaser
copies of a Preliminary Offering Memorandum, dated March 28, 2002 (the
"Preliminary Offering Memorandum"), and has prepared and will deliver to each
Initial Purchaser, copies of the Offering Memorandum, dated April 11, 2002,
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to in this Agreement, the Company's Offering Memorandum, dated
April 11, 2002, including amendments or supplements thereto and any exhibits
thereto, in the most recent form that has been prepared and delivered by the
Company to the Initial Purchasers in connection with their solicitation of
offers to purchase Securities. Further, any reference to the Preliminary
Offering Memorandum or the Offering Memorandum shall be deemed to refer to and
include any Additional Issuer Information (as defined in Section 3) furnished by
the Company prior to the completion of the distribution of the Securities.
The Company hereby confirms its agreements with the Initial
Purchasers as follows:
SECTION 1. Representations and Warranties. The Company and each of the
Guarantors, jointly and severally, hereby represent and warrant as of the date
hereof to each Initial Purchaser as follows:
(a) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 2
hereof and with the procedures set forth in Section 7 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Securities Act or, until such time as
the Exchange Securities are issued pursuant to an effective registration
statement, to qualify the Indenture under the Trust Indenture Act of ▇▇▇▇
(▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇," which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. The Company and
the Guarantors have not, directly or indirectly, solicited any offer to
buy or offered to sell,
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and will not, directly or indirectly, solicit any offer to buy or offer to
sell, in the United States or to any United States citizen or resident,
any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered
under the Securities Act. None of the Company, the Guarantors, their
respective affiliates (as such term is defined in Rule 501 under the
Securities Act (each, an "Affiliate"), or any person acting on its or
their respective behalf (other than the Initial Purchasers, as to whom the
Company and the Guarantors make no representation or warranty) has engaged
or will engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act. With respect to those Securities sold
in reliance upon Regulation S, none of the Company, the Guarantors, their
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of the
Company, the Guarantors and their Affiliates and any person acting on its
or their behalf (other than the Initial Purchasers, as to whom the Company
and the Guarantors make no representation or warranty) has complied and
will comply with the offering restrictions set forth in Regulation S.
(c) Eligibility for Resale under Rule 144A. The Securities are eligible
for resale pursuant to Rule 144A and will not be, at the Closing Date, of
the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.
(d) The Offering Memorandum. The Offering Memorandum does not, and at
the Closing Date will not, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from the Offering Memorandum
made in reliance upon and in conformity with information furnished to the
Company in writing by any Initial Purchaser through Banc of America
Securities LLC expressly for use in the Offering Memorandum, it being
understood and agreed that such information consists only of the
information described in Section 8(b) hereof. Each of the Preliminary
Offering Memorandum and the Offering Memorandum, as of its date, contains
all the information specified in, and meeting the requirements of, Rule
144A. Neither the Company nor any Guarantor has distributed or will
distribute, prior to the later of the Closing Date and the completion of
the Initial Purchasers' distribution of the Securities, any offering
material in connection with the offering and sale of the Securities other
than the Preliminary Offering Memorandum or the Offering Memorandum.
(e) The Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company and each of the Guarantors, enforceable against the Company and
the Guarantors in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles
and except as rights to indemnification may be limited by applicable law.
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(f) The Registration Rights Agreement. The Registration Rights Agreement
has been duly authorized by the Company and the Guarantors and at the
Closing Date, will be duly authorized, executed and delivered by, and will
be a valid and binding agreement of, the Company and each of the
Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and except as rights to indemnification
may be limited by applicable law. Pursuant to the Registration Rights
Agreement, the Company will agree to file with the Commission, under the
circumstances set forth therein, a registration statement under the
Securities Act relating to another series of debt securities of the
Company with terms substantially identical to the Notes and the Guarantees
(the "Exchange Notes" and the "Exchange Guarantees") to be offered in
exchange for the Notes and the Guarantees (the "Exchange Offer") and (ii)
to the extent required by the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 of the Securities Act relating
to the resale by certain holders of the Notes, and in each case, to use
its best efforts to cause such registration statements to be declared
effective.
(g) Authorization of the Securities and the Exchange Securities. (i) The
Notes to be purchased by the Initial Purchasers from the Company will be
in the form contemplated by the Indenture, have been duly authorized for
issuance and sale pursuant to this Agreement and the Indenture and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor, will constitute valid and
binding agreements of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles, and will be entitled to the benefits
of the Indenture. (ii) The Exchange Notes have been duly and validly
authorized for issuance by the Company, and when issued and authenticated
in accordance with the terms of the Indenture, the Registration Rights
Agreement and the Exchange Offer, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled to the
benefits of the Indenture. (iii) The Guarantees of the Notes will be in
the respective forms contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the
Indenture and, at the Closing Date, will have been duly executed by each
of the Guarantors and, when the Notes have been authenticated in the
manner provided for in the Indenture and delivered against payment of the
purchase price therefor, the Guarantees will constitute valid and binding
agreements of the Guarantors, enforceable against the Guarantors in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and will be entitled to the benefits of
the Indenture. (iv) The Exchange Guarantees have been duly authorized for
issuance by the Guarantors and, when the Exchange Notes have been
authenticated in the manner provided for in the Indenture and delivered in
exchange for the Notes pursuant to the Exchange Offer, will constitute
valid and binding agreements of the Guarantors, enforceable against the
Guarantors in accordance with their terms, except as the
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enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles
and will be entitled to the benefits of the Indenture.
(h) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and the Guarantors and, at the Closing Date,
will have been duly executed and delivered by the Company and the
Guarantors and will constitute a valid and binding agreement of the
Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(i) Description of the Securities and the Indenture. The Notes, the
Exchange Notes, the Guarantees, the Exchange Guarantees and the Indenture
will conform in all material respects to the respective statements
relating thereto contained in the Offering Memorandum.
(j) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum: (i) there has been no
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company, the
Guarantors and their respective subsidiaries, (any such change is called a
"Material Adverse Change"); (ii) none of the Company, the Guarantors or
their respective subsidiaries has incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no (A) dividend or
distribution of any kind declared, paid or made by the Company or, except
for dividends paid to the Company or any Guarantor, the Guarantors or any
of their respective subsidiaries on any class of capital stock or (B)
repurchase or redemption by the Company, the Guarantors or any of their
respective subsidiaries of any class of capital stock.
(k) Independent Accountants. Ernst & Young LLP, who have expressed their
opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) included in the
Offering Memorandum, are independent public or certified public
accountants within the meaning of Regulation S-X under the Securities Act
and the Exchange Act.
(l) Preparation of the Financial Statements. The financial statements,
together with the related schedules and notes, included in the Offering
Memorandum present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States,
applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto. The financial data
set forth in the Offering Memorandum under the captions "Offering
Memorandum Summary--Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data" fairly present the information set forth
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therein on a basis consistent with that of the audited financial
statements contained in the Offering Memorandum.
(m) Incorporation and Good Standing of the Company, the Guarantors and
their Subsidiaries. Each of the Company, the Guarantors and their
respective subsidiaries has been duly incorporated or formed and is
validly existing as a corporation, limited liability company or
partnership in good standing under the laws of the jurisdiction of its
incorporation or formation and has corporate, limited liability company or
partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum and,
in the case of the Company and the Guarantors, to enter into and perform
their respective obligations under each of this Agreement, the
Registration Rights Agreement, the Securities, the Exchange Securities and
the Indenture. Each of the Company, the Guarantors and their respective
subsidiaries is duly qualified as a foreign corporation, limited liability
company or partnership to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be in
good standing would not, individually or in the aggregate, result in a
Material Adverse Change. Except as set forth in the Offering Memorandum,
all of the issued and outstanding capital stock, membership interests or
partnership interests of the Company's and the Guarantors' subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company and the Guarantors, directly or
through their subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim other than those securing the
Company's obligations under the Senior Credit Facilities, Revolving Credit
Facility and Senior Notes (each as defined below). The Company does not
own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Schedule C hereto.
(n) Capitalization and Other Capital Stock Matters. At December 31,
2001, on a consolidated basis, after giving pro forma effect to the
issuance and sale of the Securities pursuant hereto, the Company would
have an authorized and outstanding capitalization as set forth in the
Offering Memorandum under the caption "Capitalization" (other than for
subsequent issuances of capital stock, if any, pursuant to employee
benefit plans described in the Offering Memorandum or upon exercise of
outstanding options described in the Offering Memorandum).
(o) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. Neither the Company, any of the Guarantors nor any
of their respective subsidiaries is in violation of its charter or by-laws
or is in default (or, with the giving of notice or lapse of time, would be
in default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which
the Company, any of the Guarantors or any of their respective subsidiaries
is a party or by which it or any of them may be bound (including, without
limitation, the Company's (i) senior credit facilities, including a term
loan in the amount of $75.0 million, which matures on December 31, 2006,
and a revolving credit loan, with outstanding borrowings of $92.5 million
as of December 31, 2001 and which matures on December 31, 2006 (the
"Senior Credit Facilities"); (ii) revolving credit facility, with no
outstanding borrowings as of December 31, 2001 and which matures on June
30, 2002 (the "Revolving Credit Facility"); and (iii) five series of
senior notes, with an aggregate principal amount outstanding as of
December 31, 2001 of $67.5 million and which have
6
maturities ranging from August 1, 2003 to December 12, 2006 (such notes,
the "Senior Notes")) or to which any of the property or assets of the
Company, the Guarantors or any of their respective subsidiaries is subject
(each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The
Company's and each of the Guarantors' execution, delivery and performance
of this Agreement, the Registration Rights Agreement and the Indenture,
and the issuance and delivery of the Securities (including the Guarantees
endorsed thereon) or the Exchange Securities (including the Exchange
Guarantees endorsed thereon), and consummation of the transactions
contemplated hereby and thereby and by the Offering Memorandum (i) will
not result in any violation of the provisions of the charter or by-laws of
the Company, (ii) will not conflict with or constitute a breach of, or
Default or a Debt Repayment Triggering Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, any of the Guarantors or any
of their respective subsidiaries pursuant to, or require the consent of
any other party to, any Existing Instrument, except for such conflicts,
breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company,
any of the Guarantors or any of their respective subsidiaries. No consent,
approval, authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency, is
required for the Company's or any of the Guarantors' execution, delivery
and performance of this Agreement, the Registration Rights Agreement, or
the Indenture, or the issuance and delivery of the Securities (including
the Guarantees endorsed thereon) or the Exchange Securities (including the
Exchange Guarantees endorsed thereon), or consummation of the transactions
contemplated hereby and thereby and by the Offering Memorandum, except (1)
such as have been obtained or made by the Company or by any of the
Guarantors and are in full force and effect, (2) such as may be required
by applicable state securities or blue sky laws and (3) such as may be
required by federal and state securities laws with respect to the
Company's and any of the Guarantors' obligations under the Registration
Rights Agreement. As used herein, a "Debt Repayment Triggering Event"
means any event or condition which gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company, any of the Guarantors or any
of their respective subsidiaries.
(p) No Material Actions or Proceedings. Except as otherwise disclosed in
the Offering Memorandum, there are no legal or governmental actions, suits
or proceedings pending or, to the best of the Company's or any of the
Guarantors' knowledge, threatened against or affecting the Company, any of
the Guarantors or any of their respective subsidiaries, which has as the
subject thereof any property owned or leased by the Company, any of the
Guarantors or any of their respective subsidiaries, where in any such case
there is a reasonable possibility that such action, suit or proceeding
might be determined adversely to the Company, any of the Guarantors or any
of their respective subsidiaries and any such action, suit or proceeding,
if so determined adversely, would reasonably be expected to result in a
Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. Except as otherwise disclosed
in the Offering Memorandum, no material labor dispute with the employees
of the Company, any of the Guarantors or any of their respective
subsidiaries exists or, to the best of the Company's or any of the
Guarantors' knowledge, is threatened or imminent.
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(q) Intellectual Property Rights. The Company, the Guarantors and their
respective subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights") reasonably
necessary to conduct their respective businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would not
result in a Material Adverse Change. Neither the Company, any of the
Guarantors nor any of their respective subsidiaries has received any
notice of infringement or conflict with asserted Intellectual Property
Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(r) All Necessary Permits, etc. The Company, the Guarantors and their
respective subsidiaries possess such valid and current certificates,
authorizations, franchises or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses, and except as otherwise disclosed in the
Offering Memorandum, neither the Company, any of the Guarantors nor any of
their respective subsidiaries has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
could result in a Material Adverse Change.
(s) FCC Licenses.
(i) The Company and each of the Guarantors hold such validly
issued Federal Communications Commission (the "FCC") licenses and authorizations
as are necessary to operate their respective television stations, which are
listed on Schedule B (each a "Station" and collectively, the "Stations"), as
they are currently operated (collectively, the "FCC Licenses"), and each such
FCC License is in full force and effect. The FCC Licenses of the Company and
each Guarantor are listed on Schedule B, and each of such FCC Licenses has the
expiration date indicated on Schedule B.
(ii) Neither the Company nor any Guarantor has knowledge of any
condition imposed by the FCC as part of any FCC License, which condition is
neither set forth on the face thereof as issued by the FCC nor contained in the
rules and regulations of the FCC applicable generally to stations of the type,
nature, class or location of the Station in question. Except as otherwise
disclosed in the Offering Memorandum, each Station has been and is being
operated in all material respects in accordance with the terms and conditions of
the FCC Licenses applicable to it and the rules and regulations of the FCC and
the Communications Act of 1934, as amended (the "Communications Act").
(iii) Except as otherwise disclosed in the Offering Memorandum, no
proceedings are pending or to the Company's knowledge, are threatened which may
result in the revocation, modification, non-renewal or suspension of any of the
FCC Licenses, the denial of any pending applications, the issuance of any cease
and desist order or the imposition of any fines, forfeitures or other
administrative actions by the FCC with respect to any Station or its operation,
other than any matters which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change and proceedings
affecting the television broadcasting industry in general.
(iv) All reports, applications and other documents required to be
filed by the Company or any such Guarantor with the FCC with respect to the
Stations have been timely filed, and all such reports, applications and
documents are true, correct and complete in all
8
respects, except where the failure to make such timely filing or any inaccuracy
therein could not reasonably be expected to result in a Material Adverse Change,
and except as otherwise disclosed in the Offering Memorandum, neither the
Company nor any of the Guarantors has knowledge of any matters that could
reasonably be expected to result in the suspension or revocation of or the
refusal to renew any of the FCC Licenses or the imposition on the Company or any
Guarantor of any material fines or forfeitures by the FCC, or which could
reasonably be expected to result in the revocation, rescission, reversal or
modification of any Station's authorization to operate as currently authorized
under the Communications Act and the policies, rules and regulations of the FCC.
(t) No Citations. There are no unsatisfied or otherwise outstanding
citations issued by the FCC with respect to any Station or its operations.
(u) Condition of Stations. All of the material properties, equipment and
systems of the Company and the Guarantors and the Stations owned and/or
operated by them are, and all material properties, equipment and systems
to be added in connection with any contemplated Station expansion or
construction will be, in condition which is sufficient for the operation
thereof in accordance with past practice of the Station in question and
except as otherwise disclosed in the Offering Memorandum, are and will be
in compliance with all applicable standards, rules or requirements imposed
by (a) any governmental agency or authority including without limitation
the FCC and (b) any FCC License, in each case except where such
noncompliance would not reasonably be expected to result in a Material
Adverse Change.
(v) No Material Actions or Proceedings by FCC. Other than as set forth
in the Offering Memorandum (including those matters referred to therein
relating to general rulemakings and similar matters relating generally to
the cable television industry) and except with respect to general
rulemakings and similar matters relating generally to the cable television
industry, (i) there are no actions, suits, proceedings, inquiries or
investigations by the FCC pending or threatened in writing against or
affecting the Company, any of its subsidiaries or any System, which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate result in a Material Adverse Change; and
(ii) to the Company's knowledge, there is no reasonable basis for any such
action, suit, proceeding or investigation, which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate result in a Material Adverse Change.
(w) FCC Authorizations. Except with respect to matters that would not,
individually or in the aggregate, result in a Material Adverse Change, (i)
the Company and its subsidiaries have made all material filings,
recordings and registrations with, and possess all validations or
exemptions, approvals, orders, authorizations, consents, licenses,
certificates and permits from, the FCC and other federal, state and local
regulatory or governmental bodies and authorities or any subdivision
thereof, including, without limitation, cable television franchises and
cable antenna relay service, broadcast auxiliary, earth station, business
radio, microwave or special safety radio service licenses issued by the
FCC (collectively, the "FCC Authorizations") necessary or appropriate to
own, operate and construct the cable communication systems that are now
owned or managed by them (the "Systems") or otherwise for the operation of
their businesses and are not in violation of any thereof; (ii) all such
FCC Authorizations are in full force and effect, and no event has occurred
that permits, or after notice or lapse of time could permit, the
revocation, termination or modification of any FCC Authorization which is
9
necessary or appropriate to own, operate and construct the Systems or
otherwise for the operation of any such business; (iii) neither the
Company nor any of its subsidiaries is in breach or violation of, or in
default under, any duty or obligation required by any of the terms,
conditions or provisions of the Communications Act, or any FCC rule,
regulation or policy applicable to the operation of any portion of any of
the Systems; (iv) neither the Company nor any of its subsidiaries, is in
violation of any duty or obligation required by state or local laws, or
local rules or regulations applicable to the operation of any portion of
any of the Systems; (v) there is not pending or, to the knowledge of the
Company or any of its subsidiaries, threatened, any action by the FCC or
state or local regulatory authority to modify, revoke, cancel, suspend or
refuse to renew any FCC Authorization; (vi) other than as described in the
Offering Memorandum, there is not now issued or outstanding or, to the
knowledge of the Company or any of its subsidiaries, threatened, any
notice of any hearing, material violation or material complaint against
the Company or any of its subsidiaries, with respect to the operation of
any portion of the Systems and none of the Company or its subsidiaries has
any knowledge that any person intends to contest renewal of any material
FCC Authorization.
(x) Programming Agreements. (i) Except as otherwise disclosed in the
Offering Memorandum, (A) the Company and its subsidiaries have entered
into, or have rights under, all required programming agreements
(including, without limitation, all agreements under which the Company and
its subsidiaries are accorded retransmission rights relating to
programming that the Systems provide to their customers) that are material
to the conduct of their business as described in the Offering Memorandum;
and (B) all such material agreements are in full force and effect and none
of the Company, any of its subsidiaries or any of their affiliates has
received any written notice of revocation or material modifications of
such material agreements; and (ii) (A) with respect to each television
station that has notified the Company or its subsidiary that such
station's respective consent is required to carry such station on the
Systems, either the Company or the subsidiary has obtained such consent or
has ceased carrying such station; (B) all such agreements grant the
Company or one of its subsidiaries retransmission consent; and (C) all
such agreements are in full force and effect, and no event has occurred
that permits, or after notice or lapse of time could permit, the
revocation, termination or material modification of any such agreement,
except where the failure of such agreements to be in full force and effect
or such revocation would not, in either case, individually or in the
aggregate, result in a Material Adverse Change.
(y) Operation of the Systems. Except for matters that would not,
individually or in the aggregate, result in a Material Adverse Change, (i)
all registration statements and all other documents (including but not
limited to annual reports) required by the FCC in connection with the
operation of the Systems have been filed with the FCC; (ii) all
frequencies within the restricted aeronautical and navigational bands
(i.e., 108-136 MHz and 225-400 MHz) which are currently being used in
connection with the operation of the Systems have been authorized for such
use by the FCC; (iii) each of the Systems subject to Equal Employment
Opportunity Commission ("EEO") compliance certification by the FCC has
been certified by the FCC for annual EEO compliance during the time such
Systems have been owned by the Company or its subsidiaries; and (iv) all
towers associated with the Systems are in compliance with the rules and
regulations of the United States Federal Aviation Administration.
(z) Copyright Compliance. Except for matters that would not,
individually or in the aggregate, result in a Material Adverse Change, (i)
all statements of accounts and any
10
other filings that are required under Section 111 of the United States
Copyright Act of 1976, as amended, in connection with the retransmission
of any broadcast television and radio signals on the Systems have been
timely filed with the United States Copyright Office and indicated royalty
payments have been made for each System for each accounting period during
which such Systems have been owned or managed by the Company or its
subsidiaries; (ii) none of the Company, any of its subsidiaries or any
System has received any inquiry or request from the United States
Copyright Office or from any other party challenging or questioning any
such statements of account or royalty payments; and (iii) no claim of
copyright infringement has been made or threatened in writing against the
Company, any of its subsidiaries or any System.
(aa) Compliance with Communications Act or FCC. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby or by the Offering Memorandum under "Use of Proceeds,"
nor compliance with the terms, conditions and provisions hereof and
thereof by the Company or its subsidiaries, will conflict with the
Communications Act or the rules, regulations or policies of the FCC
thereunder, or will cause any suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any material license, permit,
franchise, certificate, consent, authorization, designation, declaration,
filing, registration or qualification.
(bb) Title to Properties. The Company, the Guarantors and their
respective subsidiaries have good and marketable title to all the
properties and assets reflected as owned in the financial statements
contained in the Offering Memorandum, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company, the Guarantors or
their respective subsidiaries and except for liens permitted by the
Indenture. The real property, improvements, equipment and personal
property held under lease by the Company, the Guarantors or any of their
subsidiaries are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the
use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company, the Guarantors or their
respective subsidiaries.
(cc) Tax Law Compliance. Except to the extent that any such failures
would not, individually or in the aggregate, result in a Material Adverse
Change, the Company, the Guarantors and each of their respective
subsidiaries have filed all necessary federal, state and foreign income
and franchise tax returns and have paid all taxes required to be paid by
any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements contained in the Offering Memorandum in respect of all federal,
state and foreign income and franchise taxes for all periods as to which
the tax liability of the Company or any of its consolidated subsidiaries
has not been finally determined.
(dd) Company Not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and after
receipt of payment for the Securities will not be, an "investment company"
within the meaning of Investment
11
Company Act and will conduct its business in a manner so that it will not
become subject to the Investment Company Act.
(ee) Insurance. The Company, the Guarantors and each of their respective
subsidiaries are insured by recognized, financially sound institutions
with policies in such amounts and with such deductibles and covering such
risks as are generally deemed adequate and customary for their businesses
including, but not limited to, policies covering real and personal
property owned or leased by the Company, the Guarantors and their
respective subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes. Except as set forth in the Offering Memorandum,
each of the Company and its subsidiaries has no knowledge that it will not
be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now conducted and at a cost that would not result in a Material Adverse
Change.
(ff) No Price Stabilization or Manipulation. Neither the Company, the
Guarantors nor their respective subsidiaries have taken nor will 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 any security of the Company to facilitate the sale or resale of the
Securities.
(gg) Accounting System. The Company and each of the Guarantors maintain a
system of accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i)
neither the Company, the Guarantors nor their respective subsidiaries are
in violation of any federal, state, local or foreign law or regulation
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any permits
or other governmental authorizations required for the operation of the
respective businesses of the Company, the Guarantors or their respective
subsidiaries under applicable Environmental Laws, or noncompliance with
the terms and conditions thereof, nor has the Company, the Guarantors or
their respective subsidiaries received any written communication from a
governmental authority that alleges that the Company, any of the
Guarantors or any of their respective subsidiaries is in violation of any
Environmental Law; (ii) there is no claim, action or cause of action filed
with a court
12
or governmental authority, no investigation with respect to which the
Company or the Guarantors have received written notice, and no written
notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys' fees or
penalties arising out of, based on or resulting from the presence, or
release into the environment, of any Material of Environmental Concern at
any location owned, leased or operated by the Company, any of the
Guarantors or their respective subsidiaries, now or in the past
(collectively, "Environmental Claims"), pending or, to the best of the
Company's or any of the Guarantors' knowledge, threatened against the
Company, any of the Guarantors or any of their respective subsidiaries or
any person or entity whose liability for any Environmental Claim the
Company, any of the Guarantors or their respective subsidiaries has
retained or assumed either contractually or by operation of law; and (iii)
to the best of the Company's or any of the Guarantors' knowledge, there
are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern,
that reasonably could result in a violation of any Environmental Law or
form the basis of a potential Environmental Claim against the Company, any
of the Guarantors or any of their respective subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company,
any of the Guarantors or their respective subsidiaries has retained or
assumed either contractually or by operation of law.
(ii) ERISA Compliance. The Company, the Guarantors and their respective
subsidiaries and any "employee benefit plan" (as defined under the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company, the Guarantors, their
respective subsidiaries or their "ERISA Affiliates" (as defined below) are
in compliance in all material respects with ERISA. "ERISA Affiliate"
means, with respect to the Company, the Guarantors or their respective
subsidiaries, any member of any group of organizations described in
Sections 414 (b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the
"Code") of which the Company, the Guarantors, or any of their respective
subsidiaries is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, the
Guarantors, their respective subsidiaries or any of their ERISA
Affiliates. Neither the Company, the Guarantors, any of their respective
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under Title IV of ERISA, other than for the
payment of premiums under Section 4007 of ERISA, with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit
plan" established or maintained by the Company, the Guarantors, their
respective subsidiaries or any of their ERISA Affiliates that is intended
to be qualified under Section 401 of the Code has received a favorable
determination of such qualification from the Internal Revenue Service, or
currently has an application for such determination on file, and nothing
has occurred, whether by action or failure to act, which would cause the
loss of such qualification.
(jj) No Default in Senior Indebtedness. No event of default exists under
any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument constituting senior indebtedness of the Company or
any of the Guarantors.
13
(kk) Regulation S compliance. The Company, the Guarantors and their
respective affiliates and all persons acting on their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering
of the Securities outside the United States and, in connection therewith,
the Offering Memorandum will contain the disclosure required by Rule 902.
(ll) Compliance with Regulation S Restriction Period. The Securities sold
in reliance on Regulation S will be represented upon issuance by a
temporary global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred
to in Rule 903 of the Securities Act and only upon certification of
beneficial ownership of such Securities by non-U.S. persons or U.S.
persons who purchased such Securities in transactions that were exempt
from the registration requirements of the Securities Act.
SECTION 2. Purchase, Sale and Delivery of the Securities.
(a) The Securities. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company agrees to issue and sell to the
several Initial Purchasers, severally and not jointly, all of the
Securities and the Initial Purchasers agree, severally and not jointly, to
purchase from the Company the aggregate principal amount of Securities set
forth opposite their names on Schedule A, at a purchase price of 97.00% of
the principal amount thereof payable on the Closing Date.
(b) The Closing Date. Delivery of certificates for the Securities in
definitive form to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or such other place as may be agreed to
by the Company and the Initial Purchasers) at 9:00 a.m. New York City
time, on April 18, 2002, or such other time and date as the Initial
Purchasers shall designate by notice to the Company (the time and date of
such closing are called the "Closing Date").
(c) Delivery of the Securities. The Company shall deliver, or cause to
be delivered, to Banc of America Securities LLC for the accounts of the
several Initial Purchasers certificates for the Securities at the Closing
Date against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The
certificates for the Securities shall be in such denominations and
registered in the name of Cede & Co., as nominee of the Depositary, and
shall be made available for inspection on the business day preceding the
Closing Date at a location in New York City, as the Initial Purchasers may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not later
than 12:00 p.m. on the second business day following the date of this
Agreement, the Company shall deliver or cause to be delivered copies of
the Offering Memorandum in such quantities and at such places as the
Initial Purchasers shall reasonably request.
(e) Initial Purchasers as Qualified Institutional Buyers. Each Initial
Purchaser severally and not jointly represents and warrants to, and agrees
with, the Company that
14
it is a "qualified institutional buyer" within the meaning of Rule 144A (a
"Qualified Institutional Buyer").
(f) Resale of Securities. Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that such
Initial Purchaser will make offers of the Securities purchased hereunder
on the terms set forth in the Offering Memorandum solely (i) to persons
whom such Initial Purchaser reasonably believes to be a Qualified
Institutional Buyer and (ii) to persons permitted to purchase securities
in offshore transactions in reliance upon Regulation S under the
Securities Act (such persons specified in clauses (i) and (ii) are the
Subsequent Purchasers referred to herein).
SECTION 3. Additional Covenants. The Company and each of the Guarantors, jointly
and severally, further covenant and agree with each Initial Purchaser as
follows:
(a) Initial Purchasers' Review of Proposed Amendments and Supplements.
Prior to amending or supplementing the Offering Memorandum, the Company
shall furnish to the Initial Purchasers for review a copy of each such
proposed amendment or supplement, and the Company shall not use any such
proposed amendment or supplement to which the Initial Purchasers
reasonably object.
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers
but not later than the date of the consummation of the Exchange Offer, any
event shall occur or condition exist as a result of which the Offering
Memorandum shall include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if in the opinion of the Initial Purchasers or counsel for
the Initial Purchasers, it is otherwise necessary to amend or supplement
the Offering Memorandum to comply with law, the Company and each of the
Guarantors agree to promptly prepare (subject to Section 3 hereof) and
furnish, at their own expense to the Initial Purchasers, amendments or
supplements to the Offering Memorandum so that the statements in the
Offering Memorandum as so amended or supplemented will not include such
statement or omission or so that the Offering Memorandum, as amended or
supplemented, will comply with law.
Following the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement and for so
long as the Securities are outstanding, if, in the reasonable judgment of
the Initial Purchasers, the Initial Purchasers or any of their affiliates
(as such term is defined in the rules and regulations under the Securities
Act) are required to deliver a prospectus in connection with sales of, or
market-making activities with respect to, such securities, because they
are or may be deemed an "Affiliate" of the Company, as such term is used
under Rule 144 under the Securities Act, to periodically amend the
applicable registration statement so that the information contained
therein complies with the requirements of Section 10 of the Securities
Act, to amend the applicable registration statement or supplement the
related prospectus or the documents incorporated therein when necessary to
reflect any material changes in the information provided therein so that
the registration statement and the prospectus will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and to provide the Initial
Purchasers with copies of each amendment or
15
supplement filed and such other documents as the Initial Purchasers may
reasonably request.
The Company and each of the Guarantors hereby expressly acknowledge
that the indemnification and contribution provisions of Sections 8 and 9
hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in
this Section 3.
(c) Copies of the Offering Memorandum. The Company agrees to furnish the
Initial Purchasers, without charge, as many copies of the Offering
Memorandum and any amendments and supplements thereto as they shall have
reasonably requested.
(d) Blue Sky Compliance. The Company and each of the Guarantors shall
cooperate with the Initial Purchasers and counsel for the Initial
Purchasers to qualify or register the Securities for sale under (or obtain
exemptions from the application of) the Blue Sky or state securities laws
of those jurisdictions designated by the Initial Purchasers, shall comply
with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities. Each of the Company and the Guarantors shall not be required
to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it
is not presently qualified or where it would be subject to taxation as a
foreign corporation. The Company and each of the Guarantors will advise
the Initial Purchasers promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for
offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company and each of the Guarantors shall use their best efforts to obtain
the withdrawal thereof at the earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Securities sold by it in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
(f) The Depositary. The Company and each of the Guarantors will
cooperate with the Initial Purchasers and use their best efforts to permit
the Securities to be eligible for clearance and settlement through the
facilities of the Depositary.
(g) Additional Issuer Information. At any time when the Company is not
subject to Section 13 or 15 of the Exchange Act, for the benefit of
holders and beneficial owners from time to time of Securities, the Company
shall furnish, at its expense, upon request, to holders and beneficial
owners of Securities and prospective purchasers of Securities information
("Additional Issuer Information") satisfying the requirements of
subsection (d)(4) of Rule 144A.
(h) Agreement Not To Offer or Sell Additional Securities. During the
period of 180 days following the date of the Offering Memorandum, the
Company and each of the Guarantors will not, without the prior written
consent of Banc of America Securities LLC, directly or indirectly, issue,
sell, offer to sell, grant any option for the sale of, any securities
similar to the Notes, or any securities convertible into or exchangeable
for the Notes or any such similar securities, except for the Notes sold to
the Initial Purchasers pursuant to this Purchase Agreement.
16
(i) Future Reports to the Initial Purchasers. For so long as any
Securities or Exchange Securities remain outstanding, the Company and the
Guarantors will furnish to Banc of America Securities LLC (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report
of the Company containing the balance sheet of the Company and the
Guarantors as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants; and (ii) as soon as available, copies of any report or
communication of the Company or the Guarantors mailed generally to holders
of its debt (including the holders of the Securities).
(j) No Integration. The Company and each of the Guarantors agree that
they will not and will cause their respective Affiliates not to make any
offer or sale of securities of the Company of any class if, as a result of
the doctrine of "integration" referred to in Rule 502 under the Securities
Act, such offer or sale would render invalid (for the purpose of (i) the
sale of the Securities by the Company to the Initial Purchasers, (ii) the
resale of the Securities by the Initial Purchasers to Subsequent
Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of
the Securities Act provided by Section 4 thereof or by Rule 144A or by
Regulation S thereunder or otherwise.
(k) Legended Securities. Each certificate for a Note will bear the
legend contained in "Notice to Investors" in the Offering Memorandum for
the time period and upon the other terms stated in the Offering
Memorandum.
(l) PORTAL. The Company and each of the Guarantors will use their best
efforts to cause such Notes to be eligible for the National Association of
Securities Dealers, Inc. PORTAL market (the "PORTAL market").
Banc of America Securities LLC, on behalf of the several Initial
Purchasers, may, in its sole discretion, waive in writing the performance by the
Company and each of the Guarantors of any one or more of the foregoing covenants
or extend the time for their performance.
SECTION 4. Payment of Expenses. The Company agrees to pay (i) all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation all expenses incident to the issuance and delivery of the
Securities (including all printing and engraving costs), (ii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Securities to the Initial Purchasers, (iii) all fees and expenses of the
Company's and the Guarantors' counsel, independent public or certified public
accountants and other advisors, (iv) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Preliminary Offering Memorandum and the Offering Memorandum (including
financial statements and exhibits), and all amendments and supplements thereto,
this Agreement, the Registration Rights Agreement, the Indenture, and the Notes
and the Guarantees, (v) all filing fees, attorneys' fees and expenses incurred
by the Company or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the Blue Sky laws
and, if requested by the Initial Purchasers, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising the Initial
Purchasers of such qualifications, registrations and exemptions, (vi) the fees
and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture, the
17
Securities and the Exchange Securities, (vii) any fees payable in connection
with the rating of the Securities or the Exchange Securities with the ratings
agencies and the listing of the Securities with the PORTAL market and (viii) all
fees and expenses (including reasonable fees and expenses of counsel) of the
Company and the Guarantors in connection with approval of the Securities by DTC
for "book-entry" transfer, and the performance by the Company and the Guarantors
of their respective other obligations under this Agreement. Except as provided
in this Section 4, Section 6, Section 8 and Section 9 hereof, the Initial
Purchasers shall pay their own expenses, including the fees and disbursements of
their counsel.
SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company
and each of the Guarantors of their respective covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Initial
Purchasers shall have received from Ernst & Young LLP, independent public
or certified public accountants for the Company, a letter dated the date
hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountant's "comfort
letters" to Initial Purchasers, delivered according to Statement of
Auditing Standards Nos. 72 and 76 (or any successor bulletins), with
respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement and the
Offering Memorandum.
(b) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the Closing Date:
(i) in the judgment of the Initial Purchasers there shall not have
occurred any Material Adverse Change or any development that could reasonably be
expected to result in a Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the possible
change, in the rating accorded any securities of the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436 under the Securities Act.
(c) Opinion of Counsel for the Company. On the Closing Date the Initial
Purchasers shall have received the favorable opinion of ▇▇▇▇ ▇▇▇▇▇ LLP,
counsel for the Company, dated as of such Closing Date, the form of which
is attached as Exhibit A.
(d) Opinion of General Counsel for the Company. On the Closing Date the
Initial Purchasers shall have received an opinion of ▇▇▇▇▇ ▇▇▇▇▇, Esquire,
general counsel for the Company dated as of such Closing Date, the form of
which is attached as Exhibit B.
(e) Opinion of Counsel for the Initial Purchasers. On the Closing Date
the Initial Purchasers shall have received the favorable opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for
18
the Initial Purchasers, dated as of such Closing Date, with respect to
such matters as may be reasonably requested by the Initial Purchasers.
(f) Officers' Certificate. On the Closing Date the Initial Purchasers
shall have received a written certificate executed by the Chairman of the
Board, Chief Executive Officer or President of the Company and each of the
Guarantors and the Chief Financial Officer or Chief Accounting Officer of
the Company and each of the Guarantors, dated as of the Closing Date, to
the effect set forth in subsection b (ii) of this Section 5, and further
to the effect that:
(i) for the period from and after the date of this Agreement and
prior to the Closing Date there has not occurred any Material Adverse Change;
(ii) the representations and warranties of the Company and each of
the Guarantors set forth in Section 1 of this Agreement are true and correct
with the same force and effect as though expressly made on and as of the Closing
Date; and
(iii) the Company and each of the Guarantors has complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(g) Bring-down Comfort Letter. On the Closing Date the Initial
Purchasers shall have received from Ernst & Young LLP, independent public
or certified public accountants for the Company, a letter dated such date,
in form and substance satisfactory to the Initial Purchasers, to the
effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection of this Section 5, except that the specified
date referred to therein for the carrying out of procedures shall be no
more than three business days prior to the Closing Date.
(h) PORTAL Listing. At the Closing Date the Notes shall have been
designated for trading on the PORTAL market.
(i) Registration Rights Agreement. The Company and each of the
Guarantors shall have entered into the Registration Rights Agreement and
the Initial Purchasers shall have received executed counterparts thereof.
(j) Indenture. The Company and each of the Guarantors shall have entered
into the Indenture and the Initial Purchasers shall have received executed
counterparts thereof.
(k) Notice of Redemption. On the Closing Date, the Senior Notes shall
have been fully repaid and retired and all obligations thereunder shall
have been satisfied in full and evidence reasonably satisfactory to the
Initial Purchasers of the same shall have been delivered to the Initial
Purchasers.
(l) Interest Swap Agreements. On or before the Closing Date, the Company
shall have effectively terminated its interest swap agreements relating to
its senior credit facilities or it shall have entered into interest
hedging arrangements reasonably satisfactory to Banc of America Securities
LLC.
19
(m) Additional Documents. On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.
SECTION 6. Reimbursement of Initial Purchasers' Expenses. If this Agreement is
terminated by the Initial Purchasers pursuant to Section 5, or if the sale to
the Initial Purchasers of the Securities on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company or the
Guarantors to perform any agreement herein or to comply with any provision
hereof, the Company and the Guarantors agree, jointly and severally, to
reimburse the Initial Purchasers (or such Initial Purchasers as have terminated
this Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the Initial
Purchasers in connection with the proposed purchase and the offering and sale of
the Securities, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on
the one hand, and the Company and each of the Guarantors, on the other hand,
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:
(a) Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions
in which such offers or sales are made. Each such offer or sale shall only
be made to persons whom the offeror or seller reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) or non-U.S. persons outside the United States to whom the
offeror or seller reasonably believes offers and sales of the Securities
may be made in reliance upon Regulation S under the Securities Act, upon
the terms and conditions set forth in Annex I hereto, which Annex I is
hereby expressly made a part hereof.
(b) The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will
be used in the United States in connection with the offering of the
Securities.
(c) Upon original issuance by the Company, and until such time as the
same is no longer required under the applicable requirements of the
Securities Act, the Securities (and all securities issued in exchange
therefor or in substitution thereof, other than the Exchange Securities)
shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
20
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE ISSUER THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY:
(i) (a) TO A PERSON WHO IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),(3) OR (7)
OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
THE ISSUER SO REQUESTS),
(ii) TO THE ISSUER, OR
(iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers
shall not be liable or responsible to the Company for any losses, damages
or liabilities suffered or incurred by the Company, including any losses,
damages or liabilities under the Securities Act, arising from or relating
to any resale or transfer of any Security.
21
SECTION 8. Indemnification.
(a) Indemnification of the Initial Purchasers. The Company and each of
the Guarantors, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser, its directors, officers and employees,
and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Initial
Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of
the Company), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (ii) upon any failure of
the Company or any of the Guarantors to perform its obligations hereunder
or under law; or (iii) any act or failure to act or any alleged act or
failure to act by any Initial Purchaser in connection with, or relating in
any manner to, the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon any matter covered by clause (i) above,
provided that the Company and each of the Guarantors shall not be liable
under this clause (iii) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by any Initial Purchaser
through its gross negligence or willful misconduct; and to reimburse each
Initial Purchaser and each such controlling person for reasonable expenses
(including the fees and disbursements of counsel chosen by Banc of America
Securities LLC) as such expenses are reasonably incurred by such Initial
Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability
or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company or any of the Guarantors by the
Initial Purchasers expressly for use in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto) it being understood and agreed that such information consists
only of the information described as such in subsection (b) below. The
indemnity agreement set forth in this Section 8 shall be in addition to
any liabilities that the Company or any of the Guarantors may otherwise
have.
(b) Indemnification of the Company, the Guarantors, their Directors and
Officers. Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of the Guarantors and each
of their respective directors, officers and employees and each person, if
any, who controls the Company or any of the Guarantors within the meaning
of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, any of
the Guarantors or any such director, or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with
22
the written consent of such Initial Purchaser), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein 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 any
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company or any of the Guarantors by
the Initial Purchasers expressly for use therein; and to reimburse the
Company, any of the Guarantors or any such director or controlling person
for any legal and other expenses reasonably incurred by the Company, any
of the Guarantors or any such director or controlling person in connection
with investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. The Company and each of
the Guarantors hereby acknowledge that the only information that the
Initial Purchasers have furnished to the Company and each of the
Guarantors expressly for use in any Preliminary Offering Memorandum or the
Offering Memorandum (or any amendment or supplement thereto) are the
statements set forth (i) in the fifth paragraph on page (ii), (ii) in the
fourth sentence under the caption "Risk Factors - If an active trading
market does not develop for those notes, you may not be able to resell
them," and (iii) under the first and third sentence of the third
paragraph, the second sentence of the fourth paragraph and the fifth
paragraph under the caption "Plan of Distribution;" and the Initial
Purchasers confirm that such statements are correct. The indemnity
agreement set forth in this Section 8 shall be in addition to any
liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
to the extent it is not prejudiced as a proximate result of such failure.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in and, to
the extent that it shall elect, jointly with all other indemnifying
parties similarly notified, by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict
may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select one separate counsel (together with local counsel) to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of such
indemnifying party's election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will
not
23
be liable to such indemnified party under this Section 8 for any legal or
other expenses 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 next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (together with local counsel), approved by the indemnifying party
(Banc of America Securities LLC in the case of Section 8 and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 8 hereof, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
SECTION 9. Contribution.
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and each of the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and each of the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, in connection with
the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and each of the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
24
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and each of the Guarantors, and the total discount received by the
Initial Purchasers bear to the aggregate initial offering price of the
Securities. The relative fault of the Company and each of the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company and each of the Guarantors, on
the one hand, or the Initial Purchasers, on the other hand, 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, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8 for purposes of indemnification.
The Company, each of the Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9.
Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the discount
received by such Initial Purchaser in connection with the Securities distributed
by it. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11 of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in Schedule A. For purposes of this Section 9, each
director, officer and employee of an Initial Purchaser and each person, if any,
who controls an Initial Purchaser within the meaning of the Securities Act and
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company and any of the Guarantors, and each
person, if any, who controls the Company and each of the Guarantors with the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.
SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Initial Purchasers by notice given to the
Company if at any time (i) trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York, Ohio or
California authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Initial Purchasers is material and adverse and makes it
impracticable to market the Securities
25
in the manner and on the terms described in the Offering Memorandum or to
enforce contracts for the sale of securities; (iv) in the judgment of the
Initial Purchasers there shall have occurred any Material Adverse Change; or (v)
the Company, the Guarantors or their respective subsidiaries shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Initial Purchasers may interfere
materially with the conduct of the business and operations of the Company and
the Guarantors or their respective subsidiaries regardless of whether or not
such loss shall have been insured. Any termination pursuant to this Section 10
shall be without liability on the part of the Company and the Guarantors to any
Initial Purchaser, except that the Company and the Guarantors shall be obligated
to reimburse the expenses of the Initial Purchasers pursuant to Sections 4 and 6
hereof, of any Initial Purchaser to the Company, or of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 11. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, of each of the Guarantors, of their respective officers and of the
several Initial Purchasers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Initial Purchaser or the Company or any of the Guarantors or their
respective partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Securities sold
hereunder and, in the case of Section 8 or 9 only, any termination of this
Agreement.
SECTION 12. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Initial Purchasers:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
26
If to the Company or the Guarantors:
Block Communications, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ [▇▇▇▇▇]
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.
SECTION 14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(a) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the
federal courts of the United States of America located in the City and
County of New York or the courts of the State of New York in
27
each case located in the City and County of New York (collectively, the
"Specified Courts"), and each party irrevocably submits to the
non-exclusive jurisdiction of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to
such party's address set forth above shall be effective service of process
for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying
of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such suit, action or other proceeding brought
in any such court has been brought in an inconvenient forum.
SECTION 16. Default of One or More of the Several Initial Purchasers. If any one
or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date. If any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities and the aggregate number of Securities
with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on the Closing Date, and arrangements satisfactory to
the Initial Purchasers and the Company for the purchase of such Securities are
not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either the Initial
Purchasers or the Company shall have the right to postpone the Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Offering Memorandum or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 16. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
SECTION 17. General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit[; provided,
however, the Company may waive any condition on behalf of itself and the
Guarantors, on the one hand, and Banc of America Securities LLC may waive any
condition on behalf of itself and the several Initial Purchasers, on the other
hand]. The Table of Contents and the section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
29
Very truly yours,
BLOCK COMMUNICATIONS, INC.
By:
------------------------------------
Name:
Title:
ACCESS TOLEDO, LTD.
By:
------------------------------------
Name:
Title:
BUCKEYE CABLEVISION, INC.
By:
------------------------------------
Name:
Title:
BUCKEYE TELESYSTEM, INC.
By:
------------------------------------
Name:
Title:
CARS HOLDING, INC.
By:
------------------------------------
Name:
Title:
30
COMMUNITY COMMUNICATIONS SERVICES, INC.
By:
------------------------------------
Name:
Title:
CORPORATE PROTECTION SERVICES, INC.
By:
------------------------------------
Name:
Title:
ERIE COUNTY CABLEVISION, INC.
By:
------------------------------------
Name:
Title:
IDAHO INDEPENDENT TELEVISION, INC.
By:
------------------------------------
Name:
Title:
INDEPENDENCE TELEVISION COMPANY
By:
------------------------------------
Name:
Title:
31
LIMA COMMUNICATIONS CORPORATION
By:
------------------------------------
Name:
Title:
METRO FIBER & CABLE CONSTRUCTION COMPANY
By:
------------------------------------
Name:
Title:
MONROE CABLEVISION, INC.
By:
------------------------------------
Name:
Title:
PG PUBLISHING COMPANY
By:
------------------------------------
Name:
Title:
TOLEDO AREA TELECOMMUNICATIONS
SERVICES, INC.
By:
------------------------------------
Name:
Title:
32
WLFI-TV, INC.
By:
------------------------------------
Name:
Title:
33
The foregoing Purchase Agreement is hereby confirmed and accepted by
the Initial Purchasers as of the date first above written.
BANC OF AMERICA SECURITIES LLC
FLEET SECURITIES, INC.
COMERICA SECURITIES, INC.
NATCITY INVESTMENTS, INC.
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ CORP.
By: Banc of America Securities LLC,
as representative of the Initial Purchasers named on Schedule A hereto
By:
-----------------------------
Name:
Title:
34
SCHEDULE A
Aggregate
Principal
Amount of
Securities to
Initial Purchasers be Purchased
Banc of America Securities LLC ....................... $ 127,750,000
Fleet Securities, Inc................................. 15, 750,000
Comerica Securities, Inc.............................. 10,500,000
NatCity Investments, Inc.............................. 10,500,000
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corp................................ 10,500,000
Total........................................... $ 175,000,000
Schedule B
Television Channel FCC License
Station Number Market Expiration Date
---------- ------ ------ ----------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ August 1, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ August 1, 2005
WAND 17 Champaign-Springfield and Decatur, IL December 1, 2005
KTRV 12 Boise, ID February 1, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇ October 1, 2005
Schedule C
Access Toledo, Ltd.
Buckeye Cablevision, Inc.
Buckeye Telesystem, Inc.
CARS Holding, Inc.
Community Communications Services, Inc.
Corporate Protection Services, Inc.
Erie County Cablevision, Inc.
Idaho Independent Television, Inc.
Independence Television Company
Lima Communications Corporation
Metro Fiber & Cable Construction Company
Monroe Cablevision, Inc.
PG Publishing Company
Toledo Area Telecommunications Services, Inc.
WAND (TV) Partnership
WLFI-TV, Inc.
ANNEX I
Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser understands
that:
Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Securities in the United States or to, or for the
benefit or account of, a U.S. person (other than a distributor), in each case,
as defined in Rule 902 under the Securities Act (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the offering of the Securities pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial Purchaser
agrees that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Securities (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not use any offering materials or documents in connection
with offers and sales of the Securities, except such advertisements, offering
materials or documents as permitted by and include the statements required by
Regulation S.
Such Initial Purchaser agrees that, at or prior to confirmation of a
sale of Securities by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903 under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and may
not be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of your distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Institutional
Accredited Investors in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent
sale by you of the Notes covered hereby in reliance on Regulation S during
the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must
deliver a notice to substantially the foregoing effect. Terms used above
have the meanings assigned to them in Regulation S."
Such Initial Purchaser agrees that the Securities offered and sold
in reliance on Regulation S will be represented upon issuance by a global
security that may not be exchanged for definitive securities until the
expiration of the 40-day restricted period referred to in Rule 903 of the
Securities Act and only upon certification of beneficial ownership of such
Securities by non-U.S. persons or U.S. persons who purchased such Securities in
transactions that were exempt from the registration requirements of the
Securities Act.